Affordable Care Act Out-of-pocket Limits and Preventative Services Clarified
The Department of Labor has issued new Affordable Care Act guidance on out-of-pocket limits and the law’s requirement that all health plans provide preventative services. The ACA requires that group health plans that do not have grandfathered status ensure that annual employee cost-sharing and out-of-pocket costs do not exceed certain levels.
For 2014, the annual limit on out-of-pocket costs is $6,350 for individual coverage and $12,700 for families. The Department of Health and Human Services earlier proposed that the annual limits for 2015 increase to $6,600 for individual coverage and $13,200 for family coverage. Meanwhile, in a set of new frequently asked questions, the DOL states that plan sponsors may have separate out-of-pocket limits on diff erent categories of benefits, like medical and prescription drugs, as long as the combined amount of all such limits does not exceed the allowed amount. Also, the out-of-pocket limit applies to in-network expenses only.
With respect to non-covered items, the FAQs state that if an item or service is not covered by the plan, the plan does not have to include the cost of that service or item when doing the annual limits calculation. The FAQs also state that plans do not have to count towards the out-of-pocket limit the additional amount enrollees pay for brand name drugs if alternative generic drugs are available.
The new guidance also covers the issue of preventative services being covered at no cost to health plan enrollees. Group health plans that begin on or after Sept. 24 must cover breast cancer risk-reducing medications, such as tamoxifen or raloxifene, without cost-sharing (which means no cost to the participant in most cases). Also, since the ACA requires insurers to cover tobacco-use counseling and interventions, the FAQs state that a group health plan would be in compliance if the plan or issuer covers without cost-sharing:
- Screening for tobacco use; and,
- At least two tobacco-cessation attempts per year for users of tobacco products.
This means free coverage for four tobacco-cessation counseling sessions of at least 10 minutes each (including telephone counseling, group counseling and individual counseling) without prior authorization; and all Food and Drug Administration approved tobacco-cessation medications (including both prescription and over-the-counter medications) for a 90-day treatment regimen when prescribed by a health care provider without prior authorization.
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