Employer Group Wants New Health Out-of-Pocket Expense Rule Scrapped

The ERISA Industry Committee is asking federal regulators to withdraw a recent “clarification” of health care reform law rules that place new limits starting next year on how much in out-of-pocket expenses employers with high-deductible plans can require employees to pick up.

Under that regulatory guidance, jointly issued earlier by the U.S. departments of Health and Human Services, Labor and Treasury, the maximum out-of-pocket expenses employers can require employees to pay before health plan coverage kicks in will be $6,850 for single coverage and $13,700 for family coverage when the rules go into effect in 2016.

In addition, the guidance adds a new and potentially costly requirement for employers, who will have to cap at $6,850 the maximum out-of-pocket expense any individual with family coverage — whether an employee or covered dependent — can be required to pay before family coverage kicks in.

Specifically, the $6,850 annual cap on how much a plan participant can be required to pay will apply regardless if the individual has single or family coverage.

The ERISA Industry Committee, a Washington-based benefits lobbying group, said there is no basis in the Patient Protection and Affordable Care Act for a so-called embedded limit for an individual with family coverage.

“Nowhere does the statute suggest that family coverage is subject to two out-of-pocket limits: an umbrella limit for aggregate costs incurred by all family members, and an embedded individual limit, equal to the self-only limit, for costs incurred by any individual member of the family,” according to the letter, signed by ERIC President and CEO Annette Guarisco Fildes and sent Wednesday to top Labor, Treasury and HHS officials.

“The assertion that these plans are subject to the self-only limit when they provide coverage other than self-only coverage is not supported by the statute. We ask the departments to recognize that the requirement is unenforceable and to announce that it has been withdrawn,” Ms. Guarisco Fildes wrote.

The biggest impact of the new cost-sharing rules will be on employers with high-deductible plans. For example, an Aon Hewitt survey found that just 17% of large and midsize employers offering high-deductible health care plans with health savings accounts had an embedded out-of-pocket limit.

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