Under the Affordable Care Act (ACA), out-of-pocket health expenses in non-grandfathered insurance plans will rise to $6,850 in 2016 for individuals and to $13,700 for family coverage.
Breaking from the past, however, the individual limit now applies regardless. In other words, if one individual rolls up $12,000 in annual health expenses, only $6,850 of that will be credited against the overall family limit of $13,700.
Whereas in the past, that $12,000 would be credited entirely to the family limit, that is no longer the case. This is all courtesy of what’s being called “the embedded rule,” meaning that individual limits are embedded in the overall limit.
On the plus side for the individual with the $12K bill, the insurance company must cover the remaining $5,150, but the other family members must spend another $6,850 on medical expenses before the insurance company becomes liable again.
This “embedded rule” is covered in a the latest set of Obamacare FAQs (No. 27) issued by the Department of Labor (DOL).
NOTE: As the Wall Street Journal is reporting today, however, ACA out-of-pocket limits apply only if the patient uses a provider listed in the insurance company’s network. Out-of-network expenses can be billed directly to the consumer once the insurance company pays its part, even if the bill exceeds ACA’s out-of-pocket limits.
For the full story on how the Affordable Care Act (ACA, or Obamacare) affects your business, no matter how large or small, please obtain a copy of our comprehensive yet easy-to-follow Affordable Care Act Compliance Kit.