On January 31, 2020, the Department of Health and Human Services (HHS) published its proposed Notice of Benefit and Payment Parameters for 2021. The proposed rule explains the benefit and payment parameters under the Affordable Care Act (ACA).
If finalized, the provisions included in the proposed rule would apply for the 2021 benefit year so it’s important for employers to keep in mind these proposals are subject to change before being finalized.
Proposed standards included in the rule relate to:
- Annual limitations on cost-sharing;
- The individual mandate’s affordability exemption; and
- Special enrollment periods (SEPs) in the Exchanges.
Annual Limitations on Cost-Sharing
The ACA requires non-grandfathered plans to comply with an overall annual limit, or an out-of-pocket maximum, on essential health benefits (EHB).
For 2020, the out-of-pocket maximum is $8,150 for self-coverage and $16,300 for family coverage. Under the proposed rule, the out-of-pocket maximum for 2021 would increase to $8,550 for self-coverage and $17,100 for family coverage.
Individual Mandate’s Affordability Exemption
Under the ACA, individuals who lack access to affordable minimum essential coverage (MEC) are exempt from the individual mandate penalty.
For purposes of this exemption, coverage is considered affordable for an employee if the employee’s required contribution for the lowest-cost, self-coverage does not exceed 8% of household income.
- For 2020, the required contribution percentage deceased to 8.24%
- Under the proposed rule, the required contribution percentage would increase in 2021 to 8.27%.
- The proposition recognizes that an individual would be exempt from the individual mandate penalty if they pay more than 8.27% of their household income for MEC.
Special Enrollment Periods
Under the Exchanges, certain SEPs, are available for people who lose health insurance during the year or experience other qualifying events. The 2021 proposed rule would revise certain existing rules.
These revisions include; changing qualified health plans for Exchange enrollees and their dependents; requiring Exchanges to apply plan category limitations to dependents who are currently enrolled in Exchange coverage; and shortening the time between the date a consumer enrolls in a plan and the effective date of the plan.
The proposed rule is also seeking comments on additional issues, such as a new automatic re-enrollment process through the Exchange for consumers with $0 plans after premium tax credits are applied.
For more information on the proposed rule, click here.
Questions? Contact Creative Benefits at 866-306-0200 or solutions@creativebenefitsinc.com.