Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
2016 ACA "Embedded" Cost Sharing
Old 09-16-2015, 06:14 AM   #1
Full time employment: Posting here.
 
Join Date: Jan 2014
Posts: 662
2016 ACA "Embedded" Cost Sharing

On Tuesday, Federal regulators confirmed that an HHS notice issued in May is correct. The clarification impacts 2016 non-grandfathered plans.

Quote:
A consumer who purchases a family health insurance plan will have an out-of-pocket cost of $6,850 for themselves or for a single family member – the same amount as someone with individual coverage. A family cap of $13,700 would apply if more than one person in a family submits claims.

This means after a patient has paid $6,850 in individual copays, coinsurance and deductibles, the health insurance company is then responsible for 100 percent of the total remaining costs.

The Department of Health and Human Services, Treasury and Labor, wrote in Tuesday’s letter, that this rule keeps consumers from being penalized for choosing family coverage rather than individual coverage.
From the HHS notice:
Quote:
HHS clarified that under section 1302(c)(1) of the Affordable Care Act, the self-only maximum annual limitation on cost sharing applies to each individual, regardless of whether the individual is enrolled in self-only coverage or in coverage other than self-only......

Example: Assume that a family of four individuals is enrolled in family coverage under a group health plan in 2016 with an aggregate annual limitation on cost sharing for all four enrollees of $13,000 (note that a plan is permitted to set an annual limitation below the maximum established under section 1302(c)(1), which is an aggregate $13,700 limitation for coverage other than self-only for 2016). Assume that individual #1 incurs claims associated with $10,000 in cost sharing, and that individuals #2, #3, and #4 each incur claims associated with $3,000 in cost sharing (in each case, absent the application of any annual limitation on cost sharing). In this case, because, under the clarification discussed above, the self-only maximum annual limitation on cost sharing ($6,850 in 2016) applies to each individual, cost sharing for individual #1 for 2016 is limited to $6,850, and the plan is required to bear the difference between the $10,000 in cost sharing for individual #1 and the maximum annual limitation for that individual, or $3,150. With respect to cost sharing incurred by all four individuals under the policy, the aggregate $15,850 ($6,850 + $3,000 + $3,000 + $3,000) in cost sharing that would otherwise be incurred by the four individuals together is limited to $13,000, the annual aggregate limitation under the plan, under the assumptions in this example, and the plan must bear the difference between the $15,850 and the $13,000 annual limitation, or $2,850.
__________________

__________________
MBSC is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-16-2015, 06:47 AM   #2
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,460
This is a nice surprise. Thanks for the link!
__________________

__________________
MichaelB is offline   Reply With Quote
Old 09-16-2015, 06:51 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,435
Interesting. Since the plan we have has aggregate deductibles rather than stacked deductibles, we just bought his and her policies since the cost was the same and we effectively got the benefit of a stacked deductible.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now   Reply With Quote
Old 09-17-2015, 03:22 PM   #4
Recycles dryer sheets
Theseus's Avatar
 
Join Date: Aug 2013
Posts: 484
Did the his & hers plans too, although as of today we both have hit our deductibles anyway. Of course last year when choosing plans, I couldn't say with confidence if that was going to be the case. Even less certain about income amount needed to be withdrawn to cover expenses. Now approaching the 11th hour, I am seeing that it may be possible to even keep AGI below 250% of the cliff, meaning we could have benefited from cost sharing as well. Didn't think at the time that we could have lived so well on so little.
__________________
Theseus is offline   Reply With Quote
Old 09-18-2015, 06:43 AM   #5
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,837
The FAQ says that if you got bit by this family deductible thing in 2015, this clarification isn't going to have an effect on that. I got bit in 2014, but went his and hers this year. I'm going his and hers again unless there's a benefit to combining.
__________________
sengsational is offline   Reply With Quote
Old 09-20-2015, 11:31 AM   #6
Full time employment: Posting here.
GTFan's Avatar
 
Join Date: Apr 2013
Location: Atlanta
Posts: 636
I don't think the FAQ says that at all, in 2016 you will have a new plan (even if it's your current one) under these rules so there will be no family plan penalty. For non-grandfathered plans you get from the exchange, of course.

We're going to get a heavily subsized plan on the exchange in 2016 and I'm going to enroll it as a family plan, replacing the current two individual plans we have with Humana now. Will be same plan we have (I think, depending on what we see in open enrollment) but I'm confident that if we go to a family plan there will not be the penalty that caused me to get two plans this year.
__________________
GTFan is offline   Reply With Quote
Old 09-20-2015, 12:02 PM   #7
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,817
As I've mentioned before... CoveredCA tried to force families onto the same plan to qualify for the subsidy. Kind of related/but opposite of what the issue is here. We had to forego the up-front subsidies in order to enroll my husband on a different plan than myself and the kids. We'll get the subsidy back at tax time.

More related to this issue - I'm not sure how the max OOP and deductible work if you have different insurers. I don't think that would be addressed in these new guidelines.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 7%, rental income 18%
rodi is offline   Reply With Quote
Old 09-23-2015, 02:35 PM   #8
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,837
Quote:
Originally Posted by GTFan View Post
I don't think the FAQ says that at all, in 2016 you will have a new plan (even if it's your current one) under these rules so there will be no family plan penalty. For non-grandfathered plans you get from the exchange, of course.

We're going to get a heavily subsized plan on the exchange in 2016 and I'm going to enroll it as a family plan, replacing the current two individual plans we have with Humana now. Will be same plan we have (I think, depending on what we see in open enrollment) but I'm confident that if we go to a family plan there will not be the penalty that caused me to get two plans this year.
When I read this, I thought that they were saying that you couldn't go back in time (to 2015 and earlier) and apply the clarification to try to improve the deal you got back then.

Quote:
Q2. Does the clarification of section 1302(c)(1) of the Affordable Care Act apply for plan or policy years that begin in 2015?

No. The Departments will apply this clarification only for plan or policy years that begin in or after 2016.
As to your getting a family policy, you should probably know for sure how the individual versus family deductible works.
Attached Images
File Type: jpg familydeductible.jpg (24.3 KB, 15 views)
__________________
sengsational is offline   Reply With Quote
Old 09-24-2015, 11:38 AM   #9
Full time employment: Posting here.
GTFan's Avatar
 
Join Date: Apr 2013
Location: Atlanta
Posts: 636
I'm still not following how family plans will get burned (as they do today) in 2016, even if all you're doing is re-enrolling a current plan on the exchange this year. All exchange family plans in 2016 will have the new (correct) deductible limits that match what you get with two individual policies today (assuming a 2-person plan). If the individual deductible in a family plan is $1k, insurance will pay after $1k is spent for that individual just as the guidelines say.

So the family limit only kicks in as a fail-safe when one or more persons exceed it, which is as it should be. And that's clearly what the guidelines posted in your OP say as well. Your diagram is correct for existing plans in 2015 but not for any plan enrolled on the exchange to be effective in 2016, *including* existing exchange plans that are simply re-enrolled via normal open enrollment. Every year is a new plan year on the exchange so your 'can't go back in time' assessment of the FAQ as it applies to existing 2015 plans was correct, but ALL plans going forward will have the new rules.
__________________
GTFan is offline   Reply With Quote
Old 09-24-2015, 12:48 PM   #10
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,460
I think everyone is saying the same thing - beginning 2016 the deductions are now treated as individual (embedded) even when the plan is family, agregate deductible is no longer applicable.

In our case DW turns Medicare age next year. If we have a family plan, I would need to convert mine to an individual policy when she starts on Medicare. To avoid any confusion over my yearly deductible, I'm leaning now toward individual plans for the both of us one more year.
__________________
MichaelB is offline   Reply With Quote
Old 09-25-2015, 08:47 PM   #11
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,837
They "got me" in 2014 on the family/individual thing. The 2013 and 2015 BCBS NC brochures explained how they would ignore the individual deductibe on a family policy, but they "forgot" to print that in the 2014 brochure. So I'm going to get back at them by buying two individual plans from now until I'm 65, just to increase their billing cost.
__________________
sengsational is offline   Reply With Quote
Old 09-25-2015, 09:00 PM   #12
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 1,712
Not to split hairs here, but do these rules only apply to Out of Pocket Max and not deductibles?

-gauss
__________________
gauss is offline   Reply With Quote
Old 09-26-2015, 10:00 AM   #13
Full time employment: Posting here.
GTFan's Avatar
 
Join Date: Apr 2013
Location: Atlanta
Posts: 636
Cost-sharing under these rules is the OOP Max.
__________________

__________________
GTFan is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
ACA income estimates and cost sharing with Silver plans jim584672 Health and Early Retirement 2 11-10-2014 10:27 AM
HSA and HDHP with ACA cost sharing mjohnsonn Health and Early Retirement 10 01-02-2014 09:15 PM
Suddenly Can't See Avatars/Embedded pics Koolau Forum Admin 52 12-28-2011 03:44 PM
New Feature: Embedded Videos Andy R Forum Admin 10 12-23-2008 02:35 PM

 

 
All times are GMT -6. The time now is 12:26 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.