HHS Releases Maximum Out-of-Pocket Limits for 2021 & Revises Guidance on Drug Coupons; Certain HSA Limits Increase for 2021

The Department of Health and Human Services (HHS) has published the Notice of Benefit and Payment Parameters for 2021 which, for plan years beginning after December 31, 2020:
  • Increases the maximum out-of-pocket (MOOP) limits for Essential Health Benefits (EHB),
  • Changes Notice Requirements for Health Reimbursement Arrangements (HRAs),
  • Addresses the treatment of direct support from drug manufacturers (coupons) toward the MOOP, and
  • Modifies the calculation of the medical loss ratio by insurers.

The chart below also shows Health Savings Account inflation-adjusted parameters as announced by the Internal Revenue Service (IRS) for 2021 in Revenue Procedure 2020-32.

Maximum Out-of-Pocket Limits and HSA Parameters
Parameter
2021
2020
In-Network MOOP on EHBs for non-grandfathered health plans
Self Only
$8,550
Self Only
$8,150
Family1
$17,100
Family 
$16,300
Maximum Contributions to an HSA Account (whether by employer or employee)
Self Only
$3,600
Self Only
$3,550
Family
$7,200
Family
$7,100
Minimum Deductible that an HSA-Qualified  High Deductible Health Plan (HDHP) can have
Self Only
$1,400
Self Only
$1,400
Family
$2,800
Family
$2,800
Maximum In-Network Out-Of-Pocket for an HDHP paired with an HSA
Self Only
$7,000
Self Only
$6,900
Family
$14,000
Family
$13,800
 
  • Notice Requirement for Health Reimbursement Arrangements (HRAs): Effective for plan years beginning on or after January 11, 2021, sponsors of HRAs or other account-based group health plans must provide a notice that describes conditions pertaining to eligibility to receive benefits, annual or lifetime caps, or other limits on benefits under the plan, and a description or summary of the benefits. The notice must be provided no later than 90 days after the employee becomes a participant in the plan and annually thereafter.
  • Treatment of Direct Support Offered by Drug Manufacturers on Cost Sharing: The Notice provides that issuers are permitted, but not required, to count coupons and other amounts paid by drug manufacturers toward reducing the cost sharing incurred by an enrollee for specific prescription drugs toward the annual limitation on cost sharing. This revises the previous regulation issued in the preamble of the Notice of Benefit and Payment Parameters for 20202, which indicated that plans would be required to count coupons toward the MOOP for 2020; however, later guidance (FAQs issued August 26, 2019) indicated that plans could delay implementation.
CHEIRON OBSERVATION: For the majority of plans that do not track coupon use, this guidance has no impact because coupons are implicitly credited toward the MOOP. However, some plans have implemented efforts to track coupon use and do not count the coupon toward the MOOP in order to control plan costs. The new guidance allows them to continue to not track coupons indefinitely.
  • Medical Loss Ratio (MLR): The Affordable Care Act requires health insurance issuers to submit data on the proportion of premium revenues spent on clinical services and quality improvement, and issue rebates if this percentage does not meet minimum standards. The Notice amends MLR reporting and calculation rules with the intent to level the playing field among health insurers, promote uniform MLR calculations, make it easier for insurers to offer wellness incentives, and (beginning in 2022) ensure that enrollees receive the benefit of all rebates and price concessions. 

Cheiron consultants can assist with your health plan requirements.

Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.

1 Note plans with family OOP limits must apply the self-only limit for each person enrolled in family coverage. This means that once a person covered under a family plan reaches the self-only MOOP limit, then all expenses above the self-only limit for covered EHBs for that person must be reimbursed at 100%, even if the family MOOP limit has not been met.

2 See the Cheiron Health Alert of July 23, 2019 at https://cheiron.us/cheironHome/viewArtAction.do?artID=287.