The Department of Health and Human Services (HHS) has issued new Affordable Care Act regulations on out-of-pocket limits and the law’s requirement that all health plans provide preventative services.
The ACA requires that group health plans that do not have grandfathered status must ensure that annual employee cost-sharing and out-of-pocket costs do not exceed certain levels as set by regulators.
For plan or policy years beginning in 2014, the annual limitation on out-of-pocket costs is $6,350 for individual coverage and $12,700 for family coverage. Beginning with the 2015 plan or policy year, and for plan or policy years thereafter, the annual limitation on out-of-pocket costs will increase annually in accordance with the ACA.
Hence, the HHS has proposed that the annual limitation on out-of-pocket costs for 2015 would be $6,600 for individual coverage and $13,200 for family coverage.
In a set of new frequently asked questions, the DOL states that plan sponsors may have separate out-of-pocket limits on different categories of benefits, like medical and prescription drugs, as long as the combined amount of all such limits does not exceed the allowed amount.
Also, the out-of-pocket limit applies to in-network expenses only and, although it is not required to do so, a plan may place a limit on out-of-network expenses.
With respect to non-covered items, the FAQs state that if an item or service is not covered by the plan, the plan does not have to include the cost of that service or item when doing the annual limits calculation.
The FAQs also state that plans do not have to count towards the out-of-pocket limit the amount paid by health plan enrollees for brand name drugs if alternative generic drugs are available (as long as those pharmaceuticals are medically appropriate substitutes).
The new guidance also covers the issue of preventative services being covered at no cost to health plan enrollees. Group health plans that begin on or after Sept. 24 must cover breast cancer risk-reducing medications, such as tamoxifen or raloxifene, without cost-sharing (which means no cost to the participant in most cases).
Also, since the ACA requires a group health plan or health insurance issuer to cover tobacco-use counseling and interventions, the FAQs state that a group health plan would be in compliance with the requirement to cover tobacco-use counseling and interventions, if the plan or issuer covers without cost-sharing:
- Screening for tobacco use; and,
- For those who use tobacco products, at least two tobacco-cessation attempts per year. This means free coverage for four tobacco-cessation counseling sessions of at least 10 minutes each (including telephone counseling, group counseling and individual counseling) without prior authorization; and all Food and Drug Administration-approved tobacco-cessation medications (including both prescription and over-the-counter medications) for a 90-day treatment regimen when prescribed by a health care provider without prior authorization.