Understanding Health Plan Deductibles and OOPMs for Employers

Deductibles and out-of-pocket maximums (OOPMs) are important cost-sharing parameters for health plans. This compliance overview summarizes key rules for employers regarding these limits, including the special limits for high-deductible health plans (HDHPs) and the Affordable Care Act’s (ACA) OOPM on essential health benefits. 

Understanding deductibles and OOPMs 

Deductibles and OOPMs play a central role in how health plan costs are shared between the plan and the enrollee. Here’s  important terms employers need to know: 

• Deductible: The amount a member must pay out-of-pocket for covered services before the health plan begins to contribute. 

• Out-of-Pocket Maximum (OOPM): The annual cap on what a member pays for covered services. Once reached, the health plan covers 100% of additional covered costs for the rest of the year. 

• Premium trade-off: Plans with higher deductibles and OOPMs often come with lower monthly premiums, and vice versa. 

While employers have flexibility in plan design, certain federal requirements apply: 

• HDHP rules: HDHPs paired with Health Savings Accounts (HSAs) must meet IRS-established minimum deductibles and maximum OOPMs. 

• ACA compliance: All health plans must adhere to the ACA’s OOPM limits for essential health benefits (EHBs). 

• Annual adjustments: These limits are updated annually for inflation, so employers should review their plan designs before each new plan year to ensure compliance. 

Questions? 

Contact TruePlan! Our team of advisors can help you with questions within the scope of employee benefits.