SEPTEMBER/OCTOBER 2015        
TODAY'S TOP INDUSTRY HEADLINES
 
2016 Changes to Out-of-Pocket
Health Insurance Limits
The Affordable Care Act requires non-grandfathered group health plans to limit out-of-pocket (OOP) expenses participants pay for in-network essential health benefits-- inclusive of money spent on deductibles, co-insurance and co-payments for in-network providers. For 2015, the limits are $6,600 individual and $13,200 family; for 2016, these limits increase to $6,850 individual and $13,700 family.

A significant additional change in 2016 is that non-grandfathered group health plans must apply an embedded self-only out-of-pocket maximum (OOPM) to each individual enrolled in family coverage if the plan's family OOPM exceeds the ACA's OOP limit for self-only coverage ($6,850 in 2016).

So, if one family member incurs costs that exceed the statutorily required OOPM for self-only coverage, the plan pays 100% of that family member's remaining expenses, even if the aggregate out-of-pocket expenses of all family members have not reached the OOPM for family coverage.

The example below illustrates the mechanics of an embedded individual OOPM, assuming $13,700 OOPM for family coverage:
  • Employee "Adam" incurs $8,000 in cost-sharing expenses (deductibles, copays and coinsurance). Adam pays the OOPM capped at $6,850, then benefit coverage without cost sharing starts for Adam and the plan pays the remaining $1,150.
  • Adam's spouse incurs $4,000 in cost-sharing expenses. Adam pays $4,000-- a total of $10,850 ($6,850 + $4,000) has now been satisfied toward the family OOPM-- and the plan pays $0.
  • Adam's child incurs $3,000 in cost-sharing expenses. Adam pays $2,850-- the family OOPM of $13,700 ($6,850 + $4,000 + $2,850) is now satisfied-- and the plan pays the remaining $150.
  • All additional in-network claims incurred during the rest of the plan year by Adam, his spouse, or child would be paid by the plan without any cost-sharing, because the family OOPM has been reached.
ABS Action Regarding 2016 OOPM Changes

ABS will be reaching out to all plan sponsors regarding this change to 2016 OOPM limits.  A compliance letter will be reaching all plan sponsors in October 2015 which details any action(s) necessary for keeping plan documents compliant with regard to this, and other, PPACA mandated changes for 2016. 

Questions?   For additional information about the 2016 OOPM changes, click here.  For questions regarding the October compliance mailing, contact ABS Client Services at (586) 693-4300.

Explaining to employees their Plan Sponsor's
need for social security numbers

A component of the MEC reporting responsibility is the collection of social security numbers by health insurance providers.


Plan sponsors and health insurance companies must collect social security numbers for each employee, covered spouses and children, because the Affordable Care Act requires every provider of minimum essential coverage to report that coverage to the IRS and furnish a statement to covered individuals. The information is used by the IRS to administer-- and individuals to show compliance with-- the health care law.

Additional information provided by the IRS can be obtained here.
Prepare for MEC
Reporting Requirements

Beginning in early 2016, the IRS under the Affordable Care Act (ACA) will require groups to report on their Minimum Essential Coverage (MEC) and Applicable Large Employer (ALE) shared responsibility (IRS Code Sections 6055 and 6056).

Both of these reporting requirements apply to health care coverage provided in 2015, and preparations will need to begin this year.


Review more details in the May/June TPA Today.
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