President Barack Obama recently signed a law that will give certain employers and insurers more flexibility in designing high-deductible and consumer-driven health plans. Initially, the Affordable Care Act (ACA) placed a cap on the deductibles of health plans offered in the small group market; the cap was set at $2,000 for individuals and $4,000 for families. However, insurers – already disgruntled at having to keep deductibles low – threatened to offset the caps by increasing copays, coinsurance and premiums.
Sensing a potential problem, the US Department of Health and Human Services (HHS) stepped in and issued a waiver allowing certain small group plans to exceed the deductible caps in 2014. However, they were only allowed to exceed the cap in order to maintain the out-of-pocket costs necessary to meet the reforms affordability requirements and this waiver only related to the current calendar year with no guidance for the future.
Enter Congress, which went ahead and added a special section to the Protecting Access to Medical Act of 2014 that permanently eliminates the deductible caps the Affordable Care Act (ACA) imposed on small group plans. This means that the plans that have long been touted as affordable will indeed by affordable for years to come.