To comply with an Affordable Care Act mandate, Blue Cross Blue Shield of Michigan and Blue Care Network are making changes to certain group high-deductible health plans that use aggregated deductibles and out-of-pocket maximum limits.
What you need to know
The U.S. Department of Health and Human Services and Internal Revenue Service have established different sets of rules related to cost-sharing levels for health care plans in 2016:
1. HHS has established these guidelines for all 2016 health care plans:
*Self-only coverage has an out-of-pocket maximum limit of $6,850.
*A family plan has an out-of-pocket maximum limit of $13,700.
2. The IRS has established these guidelines that only apply to high-deductible health plans:
*Self-only coverage must have a minimum deductible of $1,300 with an out-of-pocket maximum limit of $6,550.
*A family plan must have a minimum deductible of $2,600 with an out-of-pocket maximum of $13,100.
The out-of-pocket maximum limit for self-only coverage applies to all individuals (regardless of whether the individual is in self-only or family coverage). For the high-deductible health plans, we must use the IRS’s limit of $6,550 for self-only coverage. In other words, a family plan with a $13,100 family out-of-pocket limit cannot have cost sharing exceed $6,550 for any individual enrollee on the contract.
How does this affect our high-deductible health plans?
Unlike other Blue Cross and BCN plans, all 2015 high-deductible health plans use an aggregated cost-sharing structure. In order to remain aggregated, a 2016 family plan must meet both of these IRS requirements:
1. Have a minimum individual deductible that’s greater than or equal to $1,300
2. Have a family out-of-pocket maximum limit that’s less than or equal to $6,550
This allows one member to meet the entire family out-of-pocket maximum and not exceed the IRS individual limit of $6,550 in an aggregated plan.
If a group’s current plan can’t meet one or both of these requirements, the group can do one of these options:
1. Remain aggregated but select a plan with the family minimum deductible or the family out-of-pocket maximum that aligns with the rule
2. Move to an embedded cost-sharing structure and keep the existing benefit plan if:
*The individual minimum deductible is greater than or equal to $2,600.
*The family out-of-pocket maximum does not exceed $13,100.
Note: For BCN plans, we’ll add the EDEPM rider to denote the plans are embedded.
How will this change affect your customers?
We’ll switch some high-deductible health plans to an embedded cost-sharing model. In addition to switching to an embedded cost-sharing model, NASCO Classic plans also can do one of these options:
*Use an aggregated cost share model
*Use an aggregated deductible and embedded out-of-pocket maximum
Related information for Blue Cross groups:
*The policyholder or decision-maker for NASCO Classic-impacted plans must direct all plan changes. This requirement applies to new and existing NASCO Classic high-deductible health plans for groups effective Jan 1, 2016.
*Groups that use our standard certificates and riders will receive an automated groupwide change on their plan year renewal date that occurs on or after Jan. 1, 2016. If a group doesn’t like the benefit it’s cross-walked to, it may do another groupwide change to any other menu plan.
Related information for BCN groups:
*BCN small groups will implement this change to their high-deductible health plans at their 2016 renewal. This applies to groups with fewer than 51 full-time equivalents and 51 or more FTEs with November and December 2016 renewals.
*BCN large groups with the embedded deductible and out-of-pocket maximum solution will receive an automated groupwide change Jan. 1, 2016, to compliant plans. For any groups not renewing in January, the 2015 rates will be honored until their 2016 renewal. This applies to groups with 51 or more FTEs for January through October 2016 renewals and 101 or more FTEs for November through December 2016 renewals.
*BCN large groups with aggregate deductible and out-of-pocket maximum levels will receive an automated groupwide change on their 2016 renewal.
Related information for Blue Cross and BCN self-funded groups:
Account managers must discuss options with affected groups that have a self-funded plan modification or special modification of benefits. Account managers must initiate a groupwide change effective on the group’s plan year renewal date on or after Jan. 1, 2016.
Reminder: Self-funded groups are responsible for complying with ACA requirements and face penalties if they don’t meet those requirements. If your groups have questions about the ACA or need guidance regarding their compliance, advise them to consult their legal counsel.
Aggregated vs. embedded cost sharing: What’s the difference?
*For plans that use aggregated cost sharing: One person on a family contract can potentially fulfill the entire family’s cost-sharing requirement. For example, on a family contract with an $8,000 out-of-pocket maximum limit, one member could pay the OOPM limit of $8,000. The same holds true for the deductible.
*For plans that use embedded sharing: This plan limits member cost sharing at the individual level. One member on the contract can only fulfill the individual cost-sharing requirements. For example, on a contract with an individual out-of-pocket maximum limit of $4,000 and a family OOPM limit of $8,000, one member can pay no more than $4,000. The same holds true for the deductible.
Questions? Contact your Blues sales representative or managing agent.