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).
- For full details on EHB, see the prior Leavitt Group article on Essential Health Benefits.
- 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.