The Obama administration has delayed another Affordable Care Act (ACA) provision. The administration has postponed a consumer protection provision that limits out-of-pocket costs until 2015. Under the provision, the limit on out-of-pocket costs was not to exceed $6,350 for an individual and $12,700 for a family.
According to the New York Times, the one-year grace period was announced in February on the U.S. Department of Labor’s (DOL) website in guidance titled “FAQs about Affordable Care Act Implementation Part XII.” However, the language outlining the grace period largely flew under the radar until DOL officials recently confirmed what the language means.
The FAQs, which were prepared jointly by the DOL, the U.S. Department of Health and Human Services (HHS), and the U.S. Department of the Treasury (collectively, the departments), note that the departments recognize that plans may use multiple service providers to administer benefits and that plan service providers may impose different out-of-pocket limitations and may use different methods for crediting participants’ expenses against out-of-pocket maximums. According to the departments, those processes will need to be coordinated under the ACA, and coordination may require regular communication between service providers.
Therefore, the departments decided to implement a grace period. For the first plan year beginning on or after January 1, 2014, if a group health plan or group health insurance issuer uses more than one service provider to administer benefits that are subject to the annual limitation on out-of-pocket maximums, the departments will consider the annual limitation to be satisfied if two conditions are met. Specifically:
1. A plan must comply with the requirements regarding its major medical coverage (excluding, for example, prescription drug coverage and pediatric dental coverage).
2. If a plan or any health insurance includes an out-of-pocket maximum on coverage that does not consist solely of major medical coverage (e.g., if a separate out-of-pocket maximum applies to prescription drug coverage), then the out-of-pocket maximum cannot exceed the dollar amounts set forth in the ACA.
The departments noted that under the Mental Health Parity and Addiction Equity Act of 2008, plans and issuers are barred from imposing annual out-of-pocket maximums on all medical or surgical benefits and separate annual out-of-pocket maximums on all mental health and substance abuse disorder benefits.
The delay comes after the Obama administration’s July announcement that it would delay implementation of the ACA’s employer responsibility provision (commonly known as the “play or pay” provision) until 2015.