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HHS Proposes Out-of-Pocket Maximum Limits for 2020

Feb 05, 2019 Decorative image: health insurance form

The Department of Health and Human Services (HHS) is proposing an $8,200 out-of-pocket maximum for self-only coverage and $16,400 for family coverage for health plans beginning in 2020. This is part of the proposed Notice of Benefit and Payment Parameters for 2020 issued Jan. 24, 2019.

The Affordable Care Act requires non-grandfathered health plans to comply with an overall annual limit on out-of-pocket expenses for essential health benefits. The current limits for the 2019 plan year are $7,900 for self-only coverage and $15,800 for family coverage.

An increase in the individual mandate’s affordability exemption is also proposed—going from 8.30% of household income in 2019 to 8.39% beginning in 2020. However, considering that the individual mandate penalty was eliminated as part of the late 2017 Tax Cuts and Jobs Act, this has no real significance.

Additionally, HHS is proposing to streamline the regulatory requirements applicable to third parties who enroll individuals in the Exchange through their websites. This would make it easier for issuers and web brokers to enroll applicants in the Exchange without redirecting them to HealthCare.gov.

Finally, the proposed rule would establish a new special enrollment period for off-Exchange enrollees who experience a decrease in household income and are determined to be eligible for a premium tax credit through the Exchange.

Comments Being Sought
Comments are being sought on two issues to address in the future:

  • The practice of “silver loading,” where insurers increase premiums in silver-level Exchange plans to compensate for the loss of federal cost-sharing reduction reimbursements
  • The automatic re-enrollment process through the Exchanges and any additional measures that would reduce eligibility errors and potential government misspending

Comments must be received by HHS no later than Feb. 19, 2019, to be assured consideration before the Final Notice of Benefit and Payment Parameters for 2020 is issued.

The above information does not constitute advice. Always contact your insurance broker or trusted adviser for insurance-related questions.

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