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Cost-Sharing Limits Changing for 2015 Plan Year

By Nancy L. Farnam / Oct 16, 2014

Employers preparing for the 2015 health benefit plan year will need to review limits on the cost-sharing expected of plan participants due to changes under the Patient Protection and Affordable Care Act (PPACA).

PPACA limits employee cost-sharing for certain benefits (called "essential health benefits") under a non-grandfathered employer sponsored health plan. Specifically, the law limits the maximum amount that an employee can be required to pay out-of-pocket for deductibles, coinsurance, copayments or similar charges, and any other expenditure that is required to be paid by the employee related to essential health benefits covered under the plan.

For the 2014 plan year, the maximum cost-sharing limit under an employer sponsored plan was tied to the maximum out-of-pocket limit permitted under a "high deductible health plan."[1]  However, beginning with the 2015 plan year, the maximum employee cost-sharing under an employer sponsored health plan is no longer tied to the out-of-pocket limit for high deductible health plans. Instead, the limit is adjusted by a premium adjustment percentage as determined by the Department of Health and Human Services.  The 2015 limits are:

The maximum employee cost-sharing on essential health benefits under an employer sponsored health plan is $6,600 for self-only coverage and $13,200 for family coverage.
The maximum out-of-pocket limits for a high deductible health plan is $6,450 for self-only coverage and $12,900 for family coverage. 

An employer sponsored health plan with cost-sharing limits higher than the out-of-pocket limits permitted for a high deductible health plan will not qualify as a high deductible health plan and therefore may not be paired with a Health Savings Account (HSA). Therefore, plan sponsors who intend to permit employees to contribute to an HSA (or who intend to contribute to an HSA on behalf of employees) should set the health plan's cost-sharing limits to correspond with the high deductible health plan limits (rather than the higher amounts permitted for the health plan). A plan sponsor that does not intend to pair its plan with an HSA may incorporate the higher cost-sharing maximums.

Another important change effective for the 2015 plan year is that cost-sharing limits now apply to all essential health benefits under the plan (including both major medical coverage and prescription drug coverage). Therefore, beginning with the 2015 plan year, non-grandfathered health plans must have an out-of-pocket maximum which limits overall cost-sharing on all essential health benefits. Prior to 2015, a plan could establish separate limits for major medical benefits and prescription drug coverage if the plan utilized more than one service provider to administer benefits.

If you have any questions please contact:

Nancy Farnam at nfarnam@clarkhill.com or (248) 530-6333; Ed Hammond at ehammond@clarkhill.com or (248) 988-1821; Kristi Gauthier at kgauthier@clarkhill.com or (248) 988-5854; Doug Ellis at dellis@clarkhill.com or (412) 394-2367; or another member of our Labor and Employment Practice group.


[1] Qualification as a high deductible health plan is important because an individual is eligible to contribute to an HSA only if the individual is covered by a high deductible health plan (and meets other requirements).