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New cost-sharing limits on non-grandfathered health plans

Many Americans will soon have help when it comes to keeping out-of-pocket health care expense down. In accordance with the Affordable Care Act (ACA), the final regulation on Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation requires non-grandfathered health plans, beginning with an employer's 2014 plan year, to comply with out-of-pocket maximum (OPM) limits for in-network health benefits.


What is cost-sharing?

Cost-sharing refers to the costs consumers pay out-of-pocket for medical services covered by their plan. This generally includes coinsurance, copayments, and deductibles. It typically does not include premiums, balance billing amounts for non-network providers, or spending for non-covered services.


What does this change mean?

Currently, most medical copayments do not apply to the OPM. Additionally, many prescription drug plans today do not have an OPM, and cost-sharing for prescription drugs is amassed separately from health OPMs. Generally, starting in January 2014, copayments will apply to the OPM and all applicable member cost-sharing for health and prescription drugs will apply to a single common OPM for non-grandfathered plans.


What are the new cost-sharing limits?

Beginning in 2014, health plans must limit the amount consumers pay out-of-pocket for essential health benefits. The maximum level of the new OPMs will be the same as the maximum out-of-pocket limits for health savings account (HSA) qualifying high deductible health plans. Those amounts are $6,350 for an individual and $12,700 for a family in 2014. All benefits considered as essential health benefits are required to accumulate toward this OPM.


What else employers need to know to prepare for 2014

The Departments of Labor, Health and Human Services, and Treasury (commonly referred to as the Departments) recognize that employer plans may utilize multiple vendors to administer benefits. There is however, a one year safe harbor for the accumulation requirement if multiple vendors are used, but group health and prescription plans must individually still comply with the OPM requirements (if the prescription plan already has an OPM, in must not individually exceed the $6,350 single or $12,700 family maximum for the 2014 plan year). Employers with plan years beginning on or after Jan. 1, 2015, will then need to combine the health and prescription cost-share to a common OPM that complies with the OPM maximum amounts.  You should assess your current plan offerings and begin to evaluate the necessary changes regarding OPMs in order to stay compliant with the ACA.


Wellmark is here to inform, lead, assist and support you through all the ACA changes as you make your decisions about your group health plan. Talk to your Wellmark representative, broker, or agent about Wellmark coverage options that best meet the ongoing needs of you and your employees. Continue to monitor for updates.


Wellmark is not providing any legal advice with regard to compliance with the requirements of the Affordable Care Act (ACA) or the Mental Health Parity Addiction Equity Act (MHPAEA). Regulations and guidance on specific provisions of the ACA and MHPAEA have been and will continue to be provided by the U.S. Department of Health and Human Services (HHS) and/or other agencies. The information provided reflects Wellmark's understanding of the most current information and is subject to change without further notice. Please note that plan benefits, rates, renewal rate adjustments, and rating impact calculations are subject to change and may be revised during a plan's rating period based on guidance and regulations issued by HHS or other agencies. Wellmark makes no representation as to the impact of plan changes on a plan's grandfathered status or interpretation or implementation of any other provisions of ACA. Any questions about Wellmark's approach to the ACA of MHPAEA may be referred to your Wellmark account representative. Wellmark will not determine whether coverage is discriminatory or otherwise in violation of Internal Revenue Code Section 105(h). Wellmark also will not provide any testing for compliance with Internal Revenue Code Section 105(h). Wellmark will not be held liable for any penalties or other losses resulting from any employer offering coverage in violation of section 105(h). Wellmark will not determine whether any change in an Employer Administered Funding Arrangement affects a health plan's grandfathered health plan status under ACA or otherwise complies with ACA. Wellmark will not be held liable for any penalties or other losses resulting from any Employer Administered Funding Arrangement. For purposes of this paragraph, an "Employer Administered Funding Arrangement" is an arrangement administered by an employer in which the employer contributes toward the member's share of benefit costs (such as the member's deductible, coinsurance, or copayments) in the absence of which the member would be financially responsible. An Employer Administered Funding Arrangement does not include the employer's contribution to health insurance premiums or rates.


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