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Broker News | July 2015 | Vol. 10 No. 6
Broker News | July 2015 | Vol. 10 No. 6

New Rule on Out-of-Pocket Maximums for 2016

Earlier this year, HHS clarified that individuals are never required to spend more than the individual out of pocket limit for Essential Health Benefits regardless of the type of coverage they have. This means that an individual is never required to spend more than the individual out of pocket limit regardless of the type of coverage they have.

HHS Final Rule vs. IRS HSA Eligibility Rule

The HHS maximum out of pocket for essential health benefits differs from the IRS rules for HSA qualified plans as follows:

- The 2016 HHS cap is $6,850

- The IRS cap is $6,550

Both HHS and IRS make updates to these amounts on an annual basis. Plans have the flexibility on how to apply the maximum individual out of pocket maximum as long as each individual is at or below the individual out of pocket limit and at or below the limit for other than self only coverage. 

  • All plan types are subject to this rule, including copay, hybrid and high deductible health plans. 
  • Plans offered to direct pay, small group and large group customers (fully insured, self –funded and custom) are impacted
  • For Excellus BCBS customers, only those with HDHP plans that follow a Family Aggregation design are impacted in 2016.

To comply with the rule, and to make it simpler for our customers, we are introducing an individual out-of-pocket maximum “cap” where the maximum out-of-pocket for an individual will not exceed the designated cap for that year (either the Individual OOP Max exceeds the 2016 HHS cap of $6,850 or exceeds the IRS cap of $6,550). This will not require any action by the member or employer.  The “cap” will be automatically added.

How we are applying the cap:

Plan segment

How “cap” will be applied for our customers

Effective date

Small Group and Direct Pay

Because the state defines the maximum amount  and the aggregation rules, there will be two separate caps to comply:

- The HHS cap of $6,850 will be applied to Non-HSA qualified health plans.

- The IRS cap of $6,550 will be applied to HSA qualified health plans to keep them compliant.

  • Small Group:  Effective beginning 1/1/2016 upon renewal
  • Direct pay:  Effective 1/1/2016
Large group For non-grandfathered fully insured and self-funded Large Group business, we will have one cap amount of $6,550 for both HSA and Non-HSA qualified plans with a Family Aggregation.
  • Effective beginning 1/1/2016 upon renewal
  • New business will be effective 1/1/2016


For Example:

  • A family of four is Enrolled in a high-deductible health plan with HSA
  • Family deductible: $5200 – below IRS and HHS limits, no action
  • Family out-of-pocket maximum: $11,000 – exceeds IRS and HHS limits, so we will have to put a cap on the individual family members’ out-of-pocket maximum

This plan will be set up so that once an individual has reached $6,550 they will no longer be required to pay for deductibles, copayments and coinsurance for services for the reminder of the plan year. The remaining family members will need to pay deductibles, copayments and coinsurance for services until the family reaches the $11,000 family OOPM.

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