August 16, 2013



In This Issue
What in the World Happened with out-of-Pocket Limits This Week?
Navigators, Take Your Marks!
Already Paying for Individual Insurance? You May Be Eligible for a Subsidy
Oregon Exchange Partially Delayed
Insurers Beginning to Balk as Exchange Open Enrollment Looms
What We’re Reading
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What in the World Happened with out-of-Pocket Limits This Week?

If you thought print newspapers were irrelevant, think again. The New York Times, at least, proved how influential it is this week with a story published on Tuesday about how the Obama Administration will be providing a transition to full implementation of the health reform law’s out-of-pocket limit requirements.

The law requires health plans, beginning with the 2014 plan year, to impose OOP caps based on the annual HSA deductible limits (currently $6,350 for an individual and $12,700 for a family) but, for the 2014 plan year only, a grace period has been provided for plans with multiple benefit administrators. This transition relief was actually announced in February, and many other media outlets mentioned it then and again in April when consumer groups publicly complained about it.

This week’s New York Times story, though, is what created a frenzy in the media and with lawmakers, many of whom cited this policy, along with the employer mandate penalty delay, as evidence that that health-reform law isn’t ready for prime time.

If you are wondering exactly what’s happening with the OOP requirement, here’s the scoop: The OOP limit transition was finalized by HHS in its rules on essential health benefits. After that rule was published, the Department of Labor also put out an FAQ about the way the law’s out-of-pocket limits would be implemented and the applicability of the requirements.  

Before the essential health benefits rule was finalized, many policy experts assumed that the law’s OOP limits would only apply to the individual and small-groups markets. However, HHS ruled that the requirement is for all non-grandfathered group plans, including large groups and self-funded plans.

The new rule also called for a limit calculation that is stricter than what is traditionally applied today—all individual copays will ultimately count toward the total out-of-pocket limits, including prescription drug co-pays. Noting, though, that many plans use multiple vendors to administer portions of their benefit plans, such as a pharmacy benefit manager and third-party administrator for major medical benefits, and impose separate OOP limits and deductibles for different kinds of benefits, the rule does include transition relief for health plans with more than one benefit administrator. Plans with multiple administrators don't have to combine their tallies of members’ OOP spending into one total until the 2015 plan year. 

Further, if a plan does not impose an OOP maximum for RX, it does not need to apply one until 2015. An exception to the new rule is for plans that use a separate provider to manage their behavioral health benefits. Under the Mental Health Parity and Addiction Equity Act of 2008, health plans can't apply separate out-of-pocket maximum limits for those benefits.  Furthermore, if a plan does not contract with multiple companies to manage benefit utilization, then that plan needs to comply with the OOP limit restrictions fully during the 2014 plan year.

Bottom line: The OOP limits aren’t really being delayed, just phased in in some cases. And if you feel like you kind of knew all of this already, it’s because you did!

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