As the Hays Research and Compliance team plans ahead, we want to inform our clients that there will be two plan design changes to consider for 2019:
- Affordable Care Act out-of-pocket maximum dollar limits, and,
- High Deductible Health Plan limits.
Affordable Care Act Out-Of-Pocket Maximum Dollar Limits
This April, the U.S. Department of Health and Human Services (HHS) released the 2019 HHS Notice of Benefit and Payment Parameters. For plan years beginning in 2019, the annual cost sharing limitation for non-grandfathered essential health benefits will be $7,9000 for employee only (self) coverage, and $15,800 for other than employee only (family) coverage.
2019 ACA Maximum Out-Of-Pocket Expenses (non-grandfathered plans)
› $7,900 for self-only coverage
› $15,800 for family coverage
High Deductible Health Plan Limits
In addition, the Internal Revenue Service (IRS) recently released the Revenue Procedure 2018-30, which announces the inflation-adjusted limits for Health Savings Accounts (HSAs) And High Deductible Health Plans (HDHPs) for 2019. These limits include:
- The maximum HSA contribution limit;
- The minimum deductible amount for HDHPs; and,
- The maximum out-of-pocket expense limit for HDHPs.
These limits vary based on whether an individual has self-only or family coverage under a HDHP.
It is important to note that the IRS limits for HSA contributions and HDHP cost-sharing (except catch-up contributions for individuals aged 55 and older) will increase for 2019:
2019 HSA & HDHP Design Maximums
› HDHP minimum annual deductibles:
- $1,350 for self-only coverage
- $2,700 for family coverage
› HDHP Maximum Out-of-pocket Expense Limit:
- $6,750 for self-only coverage
- $13,500 for family coverage
› Maximum annual HSA contributions:
- $3,500 for self-only coverage
- $7,000 for family coverage
- Catch-up contribution (Age 55 and older by the end of the tax year) $1,000
Because the cost-sharing limits for HDHPs (minimum deductible and maximum out-of-pocket) will change for 2019, employers that sponsor these plans may need to make plan design changes for plan years beginning in 2019. Also, if an employer communicates the HSA contribution limits to employees as part of the enrollment process, these enrollment materials should be updated to reflect the increased limits that apply for 2019.
NOTE: DOL, HHS and IRS guidance requires group health plans to embed an individual out-of-pocket maximum in the plan’s family coverage when the family out-of-pocket maximum exceeds the ACA’s out-of-pocket maximum for self-only coverage.
If you have any questions, please contact your local Hays Consultant or email us at firstname.lastname@example.org.
By: Ben Graves, J.D., Director of Research and Compliance at Hays Companies
Disclaimer: This information is provided for general purposes only and should not be considered legal or tax advice or legal or tax opinion on any specific facts or circumstances. Readers and participants are urged to consult their legal counsel and tax advisor concerning any legal or tax questions that may arise. Any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the U. S. Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter