New DOL Guidance On Out-Of-Pocket Maximums Eases Burden
Health Care Reform places caps on out-of-pocket maximums for all non-grandfathered plans beginning in 2014. For 2014, the maximums are $6,350 for individual coverage and $12,700 for other coverage classes. This maximum out-of-pocket is a combined limit that applies to all benefits under the plan, including major medical and pharmacy benefits.
We previously blogged about how an FAQ issued by the DOL in February, 2013 had allowed plans with separate pharmacy and major medical benefits administrators until 2015 to coordinate the out-of-pocket maximums as long as the major medical plan complied on its own for 2014.
The DOL has now issued another FAQ addressing the coordination of the out-of-pocket maximum in 2015. Under the guidance, plans are permitted to avoid the problems of coordinating a single out-of-pocket maximum between separate service providers by establishing separate independent maximums for the major medical and pharmacy benefits, so long as the total maximum allocated does not exceed the maximum allowed for that year.
As presented, this guidance may present some planning opportunities by allowing the plan sponsor to allocate all or most of the out-of-pocket maximum to the benefits administered by one provider and little or no maximum to the benefits administered by another provider. This planning opportunity does not appear to be an option for a plan sponsor that self-administers or only has a single benefits administrator.