June 26, 2015
This week, HR Policy strongly urged the Departments of Labor, Treasury, and Health and Human Services to withdraw their recently issued guidance that creates an "embedded" individual out-of-pocket limit in family health care plans. Under the new guidance, an employer plan would violate the ACA unless it applied an out-of-pocket limit no higher than $6,850 to each individual enrolled as part of a family and, in addition, applied an overall out-of-pocket limit to the family no higher than $13,700. The Association's letter states the guidance is fundamentally at odds with the ACA and the IRS Code, as well as the regulatory text implementing those statutes. "Nowhere does the statute state, suggest, or imply that family coverage is subject to two out-of-pocket limits: one for the total costs incurred by all family members covered by a plan, and a separate embedded individual limit, equal to the self-only limit, for the costs incurred by any one individual in the family. Congress clearly stated that the ACA out-of-pocket limit for family coverage was to be the same as the [current limit in the Internal Revenue Code]—nothing more and nothing less. The Departments simply do not have the authority to set the standard they have, and they should immediately withdraw the guidance."