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An Early Release of 2023 Out-of-Pocket Limits for Non-HSA Plans

The earlier announcement gives employers ample time to prepare

A man wearing a face mask is standing at the front desk of a hospital.

The maximum 2023 limits on out-of-pocket costs that employer-sponsored group health plans can impose on enrollees for 2023 will be $9,100 for individual coverage and $18,200 for family coverage (up about 4.6 percent from the 2022 limits, $8,700 and $17,400, respectively).

The U.S. Department of Health and Human Services (HHS) issued the 2023 annual dollar limits on cost-sharing at the end of 2021.

"These maximum limits on cost-sharing are different from the 2023 IRS high-deductible health plan limits, which are expected to be released in the second quarter of 2022," explained Maureen Gammon and Benjamin Lupins, senior regulatory advisors, health and benefits, at consultancy WTW (formerly Willis Towers Watson).

"In prior years, these amounts have been included in the Notice of Benefit and Payment Parameters that [the HHS's Centers for Medicare & Medicaid Services] issues each year," Gammon and Lupins pointed out. "Under a new policy, however, starting with the 2023 plan year, HHS will publish the premium adjustment percentage, maximum annual limits on cost-sharing, reduced maximum annual limits on cost-sharing and required contribution percentage by January of the year preceding the applicable benefit year (so by January 2022 for the 2023 benefit year)," they noted.

The HHS's annual out-of-pocket limits are higher than those set by the IRS for HSA-eligible high-deductible health plans (HDHPs). Below is a comparison of the two sets of limits:




Maximum out-of-pocket for ACA-compliant plans (HHS)

Self-only: $9,100

Family: $18,200

Self-only: $8,700

Family: $17,500

Maximum out-of-pocket for HSA-qualified HDHPs (IRS)

To be released in the second quarter 2022

Self-only: $7,050

Family: $14,100

Ample Time to Prepare

"While these changes are not effective until 2023, the much earlier announcement gives employers ample time to prepare for 2023 enrollments," according to the employee benefits compliance team at benefits broker HUB International. "The most immediate impact from a design standpoint is the change to out-of-pocket maximums applicable to all insured and self-insured nongrandfathered medical plans."

Projected 2023 Employer Mandate Penalties

The same calculation that applies for purposes of the out-of-pocket maximum limits is also used to determine the increases in the Affordable Care Act (ACA) employer mandate penalties, HUB's compliance team noted.

"Given the approximately 4.6 percent increase in out-of-pocket maximums and the premium adjustment percentage in the final rule, we project that the 2022 employer mandate penalty increase will be similarly significant: $2,880 for the (a) penalty (up from $2,750 for 2022) and $4,320 for the (b) penalty (up from $4,120 for 2022)" they wrote. "We await official confirmation from the IRS."

While the penalty increase "is consistent with other cost-of-living adjustments, it does raise the stakes on employers ensuring they are making compliant offers of coverage to their full-time employees," HUB advised.

Related SHRM Article:

IRS Announces 2022 Limits for HSAs and High-Deductible Health Plans, SHRM Online, May 2021


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