Insight to Action

Benefits & Healthcare Update: Departments Release New Guidance on ACA Cost Sharing Limits, HSA Rules

4 May 2016

On Friday April 29, 2016, the Internal Revenue Service (IRS) released HSA contribution rules and HSA-eligible HDHP plan design rules for the 2017 plan year. Previously, the Department of Health and Human Services (HHS) released proposed rules for the out-of-pocket maximum limits applicable to non-grandfathered health plans under the ACA.

  • Remember, there are two sets of rules post-ACA: one regarding out-of-pocket maximum limitations for non-grandfathered group health plans under the ACA, and another set of rules for Health Spending Accounts (HSAs) and HSA-qualifying High Deductible Health Plans (HDHPs) under the Internal Revenue Code.

Out-of-pocket Maximum Limitations under ACA

For non-grandfathered group health plans, out-of-pocket maximums cannot be greater than $7,150 for single coverage and $14,300 for non-single/family coverage for the 2017 plan year. These out-of-pocket maximums must include both medical and prescription costs. Plans can have either a single out-of-pocket maximum for medical and prescription costs or two separate maximums, the sum of which cannot exceed $7,150 for single and $14,300 for non-single/family coverage.

Keep in mind that an individual cannot owe more than the single out-of-pocket maximum limit, regardless of whether the individual is in a single plan or a non-single/family plan. The result of this is that family and other non-single/family coverage must embed the single limit.

HSA Rules and HSA-Qualifying HDHP Rules

For the 2017 calendar year, participants with HSAs may contribute $3,400 with single coverage or $6,750 with non-single/family coverage.

For the 2017 plan year, HSA-qualifying HDHPs must have annual deductibles no less than $1,300 for single coverage and $2,600 for non-single coverage. These HDHPs must also have out-of-pocket maximums no greater than $6,550 for single coverage and $13,100 for non-single/family coverage.

The final IRS regulation for large group health plans is available online at: Notice of Benefit and Payment Parameters for 2017

The IRS guidance for HSAs and HSA-qualifying HDHP coverage is available at: https://www.irs.gov/pub/irs-drop/rp-16-28.pdf

If you have any questions about the application of these limits to your plans, please contact Ed Doherty at 646-839-8251 or via email at EDoherty@cammackhealth.com.

You can follow Ed on Twitter at @CHEdDoherty