The Patient Protection and Affordable Care Act (“PPACA”) added section 2707(b) to the Public Health Service (PHS) Act. Section 2707(b) provides that a group health plan shall ensure that any annual cost-sharing imposed under the plan does not exceed the limitations provided for under section 1302(c)(1) and (c)(2) of the Affordable Care Act. Section 1302(c)(1) limits out-of-pocket maximums and section 1302(c)(2) limits deductibles for employer-sponsored plans.
In general, section 1302(c)(2) requires that non-grandfathered health insurance and qualified health plans offered in the small group market cap their deductibles at $2,000 for a single individual and $4,000 for employee + dependent coverage. These deductible amounts are indexed to inflation and will increase year-over-year.
There is one important exception if a plan is trying to meet a certain metal tier level (e.g. the lowest level, bronze) it may exceed the deductible caps to reach that level.
In fact, California has proposed two bronze plans with deductibles much higher than the $2,000 cap. California’s bronze plan has an integrated medical and prescriptions deductible of $5,000. California’s bronze HSA (health savings account) plan has an integrated medical and prescriptions deductible of $4,500. These plans will be offered by carriers in California’s health benefit insurance exchange to individuals and small businesses beginning in October 2013 for an effective date of January 1, 2014.
Importantly, large group plans and grandfathered small plans are not required to comply with the limit on deductibles.