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Businessman leading informal meeting in office

While all eyes in the group health insurance world are focused on Capitol Hill and the specter of an Affordable Care Act repeal in 2017, the Department of Health and Human Services (HHS) is already looking ahead to 2018. HHS just announced the 2018 cost-sharing limits applicable to non-grandfathered group health plans under the ACA.

Under the ACA, non-grandfathered group health plans are required to limit the amount plan participants and beneficiaries pay towards in-network “essential health benefits.” This limit is typically referred to as the ACA’s out-of-pocket (OOP) maximum. For the purpose of this post, we are going to refer to this limit as “ACA cost-sharing limits.”

The ACA cost-sharing limits are adjusted annually by HHS. For plan years beginning in 2018, the ACA cost sharing limit will increase to $7,350 for individual coverage (an increase of $200 from 2017) and $14,700 for family coverage (an increase of $400 from 2017).

ACA-Cost Sharing Limits 2017 2018
Single $7,150 $7,350
Family $14,300 $14,700

It’s important to note that these ACA cost-sharing limits should not be confused with the maximum OOP limits applied to health savings account-compatible high deductible health plans (HDHPs). The HDHP OOP limits are set by the IRS and adjusted using a different inflation-related benchmark. Because of the use of different inflation adjustment methods, the ACA cost-sharing limits have typically been higher than the HDHP OOP limits (for example, the 2017 ACA cost sharing limits are $600 and $1,200 greater than the HDHP OOP maximums, for single and family coverage respectively). The IRS has not announced the HDHP OOP limits for 2018; it typically releases these limits in the spring.

The differing cost-sharing limits have resulted in some confusion among employers and employee benefits professionals alike. Employers will want to work closely with their brokers, consultants and third party administrators to ensure their plans are operating in compliance with applicable cost-sharing limits both under the ACA and under the applicable Tax Code provisions related to HDHPs and health savings accounts.