Background: Recent media attention highlighting a provision of the PPACA on out of pocket limits that was delayed in February 2013 has raised additional questions on what is a ‘new’ delay and what is a previously reported postponement.
Law: Insurance plans with two or more separate providers for certain benefits, such as medical and prescription coverage, may apply separate out of pockets limits for 2014. Drug plans that currently do not have an out of pocket limit may continue without a limit for 2014.
Discussion: PPACA required health plans to limit out of pocket expenses under the plan to align with the current limits applicable to high deductible plans. For 2014, these limits are $6,350 and $12,700 for individual and family plans, respectively. These limits will also encompass deductibles, copays, and coinsurance in 2014. Plans with a single administrator or insurer will still have to comply with these limits as of their 2014 plan years. Certain plans utilize multiple insurers for their benefits. Because this raises challenges for data integration across carriers, the issue of imposing and then maintaining a single out of pocket limit needs to be addressed. Like several components of health care reform law, additional time was granted in February to solve this problem.
Only plans that use multiple insures will benefit from this one year transition relief to full compliance. They will still have to apply the proscribed limit to their primary benefit plan (medical). If a separate drug plan does not currently have an out of pocket limit, it may continue to forgo such a limit for 2014. All other plans administered by a single insurer will comply with the out of pocket limits in 2014. Many Pilot clients have a single insurer for their medical and prescription benefit plan, and thus will not be affected by this transitional relief.