HHS recently finalized regulations to verify the annual out-of-pocket maximums for an individual in 2016 are limited to the annual limit for self-only coverage. This applies to all individuals, including each individual under family coverage. The regulation provides that the embedded out-of-pocket limit applies to all plans.

This embedded rule means that plans (including self-funded plans) will now have to have embedded out-of-pocket limits for each individual covered under family coverage. For example, using the 2016 limits, if a family plan has an annual out-of-pocket limit of $12,000 and one family member incurs an expense of $25,000, that family member would be responsible for expenses up to $6,850 (the self-only out-of-pocket limit), and the remaining $18,150 would be paid in full by the plan. Additional expenses incurred by that family member would be paid by the plan with no cost sharing for the remainder of the plan year.


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