Confusion over delay in Obamacare provision on Maximum Out-of-Pocket costs

Affordable Care Act (aka Obamacare) includes provision limiting out-of-pocket costs for health plans, including deductibles and copayments, to $6,350 for an individual and $12,700 for a family. Recently, however, one-year grace period was granted to some insurers, allowing them to set higher limits, or no limit at all at some costs, in 2014. According to federal officials, many insurers and employers needed more time to comply with Obamacare rules because they used separate companies to help administer major medical coverage and drug benefits, and the required changes warranted the delay.  As a result consumer may be required to pay $6,350 for doctors’ services and hospital care, and $6,350 for prescription drugs. Read more about it in the New York Times.

What is confusing is a delay’s scope. For many plans, the protections will take effect as scheduled in 2014. Some plans will be able to wait an extra year to fully comply.  In particular:

  • The total maximum out-of-pocket costs still apply to large group plans, as well as individual and small group policies that start January 1, 2014.
  • The delay until 2015 is a safe harbor ONLY for groups that use third party vendors for their prescription, mental health and/or other benefits.
  • The safe harbor only allows for a separate maximum out-of-pocket of the prescription, mental health or other benefits until 2015. After this only one total maximum-out-of-pocket will be used.

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