Although it is only spring, we now have official guidance on health savings account (HSA) and Affordable Care Act (ACA) limits for 2017 plan years. As before, these two requirements have different limits that will need to be addressed to ensure that a high deductible health plan complies with ACA requirements.
On April 27, 2016, the Internal Revenue Service (IRS) released Revenue Procedure 2016-28 showing updated annual limits for HSA contributions and high deductible health plan (HDHP) design requirements for 2017 as follows:
HDHP minimum annual deductibles:
- 1,300 for self-only coverage (unchanged from 2016)
- 2,600 for family coverage (unchanged from 2016)
Out of pocket maximums:
- 6,550 for self-only coverage (unchanged from 2016)
- 13,100 for family coverage (unchanged from 2016)
Maximum annual HSA contributions:
- 3,400 for self-only coverage ($50 increase from 2016)
- 6,750 for family coverage (no change from 2016)
On Feb. 29, 2016, the U.S. Health and Human Services (HHS), Treasury, and Labor Departments finalized rules addressing 2017 Benefit and Payment Parameters for essential health benefits impacting out-of-pocket maximums for non-grandfathered group health plans:
Annual out-of-pocket maximums for health plans (other than HDHPs with HSAs):
- 7,150 for individual coverage
- 14,300 for family coverage
In summary, a high deductible health plan with family deductibles that are higher than the ACA’s cost-sharing limit for self-only coverage must be designed to limit the maximum out-of-pocket limit to no more than $6,550 for any one individual. For example, an issuer can offer a family HDHP with a $10,000 family deductible, as long as it applies a maximum annual limitation on cost sharing of $6,850 to each individual in the plan, even if the family $10,000 deductible has not yet been satisfied. This standard does not conflict with IRS rules on HDHPs.
If you have any questions on how Hays Companies can help your business stay compliant with employee benefit laws and regulations please contact us.