Reminder: Application of the Self-Only Maximum Out-of-Pocket
The Department of Labor (DOL) released FAQs in May of 2015 to provide direction regarding the maximum out-of-pocket (MOOP) for self-only coverage. As a reminder, non-grandfathered health plans must meet annual cost sharing requirements imposed by healthcare reform. A member’s out-of-pocket costs for essential health benefits cannot exceed the limitations imposed by the regulations, which places the limits for plan years beginning in 2016 at $6,850 for self-only coverage and $13,700 for family coverage.
Do the MOOP FAQs provide clarification or impose a change?
These FAQs require a change to how the MOOP for self-only coverage is being applied.
Who must comply with the direction given in the MOOP FAQs?
Non-grandfathered health plans must comply with the MOOP requirements under healthcare reform. They must now also follow the direction given in the FAQs.
What do the FAQs say about applying the self-only MOOP?
The FAQs state that the self-only MOOP applies to each individual regardless of whether that person is enrolled in self-only or family coverage.
The DOL provides this example to illustrate how the MOOP for self-only coverage will apply for a member who is enrolled in family coverage:
- A family of four enrolls in family coverage for the 2016 plan year and shares a MOOP of $13,000 (note, this is below the maximum allowed amount of $13,700).
- Family member #1 incurs claims that total $10,000 and the remaining three members incur claims totaling $3,000 each.
- Cost sharing for each family member as individuals is limited to $6,850, meaning that the plan must pay $3,150 toward family member #1’s claims as this amount is the difference between the $10,000 in claims and the individual MOOP.
- If we look at the claims incurred by the family as a whole ($6,850 + $3,000 + $3,000 +$3,000), which total $15,850, the plan will pay $2,850 as this amount is the difference between the total and the MOOP of $13,000.
When do plans need to begin applying the self-only MOOP in this way?
The direction given in the FAQs applies for plan years that begin on or after January 1, 2016.
Does the change in the application of self-only MOOP also apply to high-deductible health plans (HDHPs)?
Yes, the direction given in the FAQs applies to HDHPs. The MOOP for HDHPs for 2016 is $6,550 for self-only and $13,100 for family coverage.
Because the $6,850 self-only MOOP exceeds the 2016 minimum annual deductible for family HDHP coverage ($2,600), this adjustment will not cause the plan to fail the requirements of a family HDHP.
Please contact your client relationship manager if you have any questions.
Compliance Quarterly is being provided as an informational tool. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this publication and any attachments, Meritain Health is not exercising discretionary authority over the plan and is not assuming a plan fiduciary role, nor is Meritain Health providing legal advice.