Cost Sharing

Cost sharing limits overview

The Affordable Care Act (ACA) requires limits for consumer spending on in-network essential health benefits (EHBs) covered under most health plans. These are known as out-of-pocket (OOP) maximum limits.

OOP maximums include deductibles, copays and coinsurance costs paid by consumers. They do not include health plan premiums or out-of-network costs.

OOP limits apply to most health plans. Specifically, they apply to all non-grandfathered individual and group plans, regardless of size or whether the plan is insured or self-funded.

Annual OOP maximum limits

The in-network OOP maximums are adjusted annually. Current amounts are:

Embedded individual OOP maximum in family plans

Effective Jan. 1, 2016, most health plans cannot allow any individual, including those with family coverage, to spend more than the individual OOP maximum established under the ACA. This is commonly referred to as an "embedded" individual OOP maximum.

See the rules on embedded individual OOP maximums 

Additional rules for Health Savings Account (HSA) plans

In addition to the ACA cost sharing limits, HSA-compatible high-deductible health plans (HDHPs) must follow additional Internal Revenue Service (IRS) rules. These rules require plans to have minimum deductible amounts and maximum OOP limits that differ from the ACA OOP limits.

This chart combines the 2024 ACA and IRS rules for HSA-compatible HDHPs.

Self-only coverage

Individual within family coverage

Family coverage

* There is not a stated IRS minimum deductible for individuals with family coverage. However, if a family plan has a separate individual deductible amount for individual family members, that amount must be at least as high as the ACA minimum family deductible.

Benefits administered by multiple vendors

Even if benefits are administered by different vendors, the in-network OOP expenses for EHBs covered under the same health plan must accumulate to a single OOP maximum. However, if dental and vision are considered excepted benefits, their related expenses do not accumulate with medical expenses toward the OOP limits.

Determining if dental and vision are excepted benefits

Excepted benefits are not subject to ACA requirements including cost sharing limits. Most dental and vision plans are excepted benefits.

Insured plans

• Dental and vision insurance benefits offered under an insurance policy that is separate from other medical coverage are "excepted benefits" and not subject to PPACA health insurance reform provisions such as the essential health benefits (EHB) mandate.
• Dental and vision benefits that are incorporated into the insured medical plan are not "excepted benefits" and therefore are subject to the PPACA EHB requirement.

Self-funded plans

• Dental and vision insurance benefits are treated as "excepted benefits" only if individuals can separately elect or reject the dental or vision benefits.
• Dental and vision benefits are not "excepted benefits" if employees enrolling in medical insurance automatically get the vision or dental benefits.

Details on Cost Sharing Limits

Embedded OOP rules for family coverage

Since Jan. 1, 2016, plans with a family OOP limit higher than the ACA individual OOP maximum are required to apply an embedded individual OOP limit for each person enrolled in family coverage. This means:

• Once an individual with family coverage meets the individual OOP maximum, the plan must pay 100% of all covered expenses for that person, even if the family maximum has not been met.
• Once the family OOP maximum is reached, the plan must pay 100% of all covered expenses for every covered individual — regardless of whether each family member has reached the individual maximum.

This rule can impact a family's total health care expenses, especially if only one family member has high medical expenses.

HDHP OOP Maximum Rules

HDHP plans designed to be used with HSAs have lower individual and family OOP maximum amounts than the limits required by the ACA.

The ACA rules require the individual OOP maximum to apply to each individual within family coverage. Any person with family coverage cannot pay more for covered expenses than the ACA individual OOP maximum amount – even if the family OOP limit has not been met.

Rules for benefits administered by multiple vendors

All in-network OOP expenses for EHBs covered under the same health plan must accumulate to a single OOP maximum, even if some benefits, such as prescription drugs or mental health/substance use disorder (MH/SUD), are administered by different vendors.

From the consumer's perspective, there is only one health plan, even if multiple vendors administer different benefits that are included in the plan.

Prescription drugs – Expenses administered by different vendors can have separate annual OOP limits as long as they do not exceed the ACA OOP maximum when added all together.

Behavioral health – MH/SUD expenses cannot have separate annual deductibles and OOP limits from medical benefits. MH/SUD expenses must accumulate with medical expenses.

Dental and vision– If employees can choose to enroll in dental and vision separately from medical, dental and vision are considered excepted benefits. That means dental and vision expenses do not accumulate with medical expenses toward the OOP limits. (See the excepted benefits section for more details.)

MH/SUD parity and OOP maximums
Plans must comply with MH/SUD parity regulations even if they carve out behavioral health benefits.

Plans subject to MH/SUD parity

• Plans cannot have separate annual deductibles and OOP limits from medical benefits. MH/SUD and medical costs must accumulate to a single OOP maximum.

Plans not subject to parity

• Non-grandfathered plans must either:
  • Keep the OOP limits separate and ensure the annual total of all OOP expenses does not exceed the allowed maximum, or
  • Combine the OOP maximums
• Grandfathered plans are not required to cover MH/SUD services. However, if they do cover them, plans cannot apply annual or lifetime dollar limits because the services are considered EHBs.

Determining whether dental and vision are excepted benefits
Here's how to determine whether dental or vision benefits are excepted benefits for:

Insured plans

• Dental and vision benefits offered under a separate insurance policy from the medical coverage are excepted benefits.
• Dental and vision benefits that are incorporated into the medical insurance policy are not excepted benefits.

Self-funded plans

• Dental and vision benefits are excepted benefits if they are offered under a separate plan from the medical insurance policy.
• Also, dental or vision benefits are excepted if the individual can elect or reject these benefits separately from medical benefits.
• Dental and vision benefits that are incorporated into the self-funded plan are not excepted benefits if employees enrolling in a medical plan automatically get the vision/dental benefits.
• If dental and vision are considered excepted benefits, dental and vision expenses do not accumulate with medical expenses toward the OOP limits.

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