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Small Business Employee Benefits and HR Blog

ACA Deductible Limit for Small Employer Health Plans Eliminated

On April 1, 2014 President Obama signed the “Protecting Access to Medicare Act of 2014” that included a provision eliminating the Affordable Care Act's (ACA's) small employer plan deductible limits.Deductible_Limit_Eliminated-1

What was the small employer deductible limit, and how does this help small employers?

The ACA included a provision for small employer health plans (1-50 employees) that required the deductible for the group health plan be no higher than $2,000 for single and $4,000 for family plans.

Many small employers and industry professional are relieved by the elimination of deductible limits. It will allow small employers to continue to offer affordable health plans along with flexible compensation options such as health reimbursement arrangements (HRAs), health savings accounts (HSAs), and flexible spending accounts (FSAs).

This will give small employers more choice in health plans, and more flexibility to control costs with consumer-driven and account-based health plan strategies.

What about the other ACA Cost-Sharing Rules?

At this time, these two other cost-sharing rules are still in effect:

  • Out-of-Pocket Maximums: The maximum annual limit on cost sharing in 2014 is $6,350 for self-only coverage and $12,700 for family coverage. If a plan is non-grandfathered, out-of-pocket member/employee expenses for in-network essential health benefits (EHBs) cannot exceed these out-of-pocket limits. However, the administration delayed the requirement (for some group health plans) to combine members' overall out-of-pocket spending into one total in 2014. As of 2015, employers and insurers need to make sure an employees' or members' out-of-pocket spending across multiple independent administrators does not exceed the 2015 cost sharing rules. Read more about the 2014 cost-sharing delay here.

  • Pediatric Dental Coverage: Stand-alone pediatric dental plans covering pediatric dental EHBs will have cost-sharing limits of $350 for coverage of one child and $700 for coverage of two or more children.

Source: Protecting Access to Medicare Act of 2014, H.R.4302