Employee Benefits Compliance

Health Plans See Affordable Care Act Cost-Sharing Limits for 2024 & 2025 Plan Years

On November 15, 2023, the Centers for Medicare and Medicaid Services (CMS) released the maximum limits on cost sharing for 2025 under the Affordable Care Act (ACA), representing a 2.6% decrease in the annual limit to out-of-pocket cost-sharing for the health plan member.

For 2025, the maximum annual limitation on cost-sharing is –

  • $9,200 for self-only coverage
  • $18,400 for family coverage.

The 2024 limits of $9,450 for self-only coverage and $18,900 for family coverage was previously mentioned in the prior Leavitt Group article on 2024 ACA limits.

ACA Cost-Sharing Limits Background Highlights

  • The ACA requires health plans to place annual limits on enrollees’ out-of-pocket spending for Essential Health Benefits (EHBs).
  • This ACA requirement applies to all non-grandfathered health plans.
    • This includes self-insured health plans, level-funded health plans and fully insured health plans of any size.
    • Most plans are not grandfathered. Talk to your Trusted Advisor about the status of your plan.
  • CMS annually adjusts the ACA’s cost-sharing limits for inflation.

Out-of-Pocket Maximum Background

The ACA requires most health plans to comply with annual limits on total enrollee cost sharing for EHBs. These cost-sharing limits are commonly referred to as an Out-Of-Pocket (OOP) maximum. Once the OOP maximum is reached for the year, the enrollee cannot be responsible for additional cost-sharing for EHBs for the remainder of the plan year.

Under the ACA, EHBs must reflect the scope of benefits covered by a typical employer plan and must include items and services in ten general categories:

  • Emergency services
  • Hospitalization
  • Prescription drugs
  • Pediatric services
  • Outpatient care
  • Maternity and newborn care
  • Rehabilitative and habilitative services
  • Ambulatory
  • Mental Health and substance use disorder services
  • Laboratory services

Any out-of-pocket expenses required by or on behalf of an enrollee with respect to EHBs must count toward the cost-sharing limit. This includes:

  • Deductibles
  • Copayments
  • Coinsurance

Other Highlights

  • Excludes premiums and spending for noncovered services.
  • Health plans that use provider networks are not required to count an enrollee’s expenses for out-of-network benefits toward the cost-sharing limit.
  • ACA requires health plans to apply an embedded out-of-pocket limit for everyone enrolled in coverage.
    • Each enrollee must have an individual out-of-pocket limit on EHBs that is not higher than the ACA’s out-of-pocket maximum for self-only coverage.

Limits for 2024 and 2025

For plan years beginning in 2024, the out-of-pocket maximum is $9,450 for self-only coverage and $18,900 for family coverage. For plan years beginning in 2025, the limits are $9,200 and $18,400, respectively. Work with your Leavitt Group Trusted Advisor to ensure your plan designs meet the new limits each year as the ACA cost-sharing limits are indexed annually and usually result in decreased limits.

 

Source: Zywave. Republished with permission. Some content by Leavitt Group.