Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage for the 2023 Benefit Year (Dec. 28, 2021)
HHS has announced the maximum annual limitations on cost-sharing for the 2023 benefit year for non-grandfathered group health plans under the Affordable Care Act (ACA). The cost-sharing limits for the 2023 benefit year will be $9,100 for self-only coverage and $18,200 for other than self-only coverage, up from $8,700 and $17,400, respectively, for the 2022 benefit year. In general, cost-sharing includes deductibles, coinsurance, copayments, and any other required expenditure that is a qualified medical expense with respect to essential health benefits covered under the plan.
In the past, HHS announced the annual limitation on cost-sharing in the final notice of benefit and payment parameters for a given benefit year. However, in the notice of benefit and payment parameters for 2022 (see our Checkpoint article), HHS amended its regulations to provide that, starting with the 2023 benefit year, the maximum annual limitation on cost-sharing (and certain other limits) will be published in guidance in January of the benefit year prior to the applicable benefit year, rather than in the annual notice of benefit and payment parameters, so long as no changes to the methodologies to calculate these amounts are proposed. In explaining this change, HHS noted that this approach would allow it to provide relevant information to stakeholders in a more timely manner. (The 2023 proposed payment parameters were also recently released (see our Checkpoint article).)
EBIA Comment: These annual increases are based on the “premium adjustment percentage,” which is also used to set other ACA parameters. For example, the IRS uses the premium adjustment percentage to calculate annual changes to the employer shared responsibility penalty amounts. The IRS generally updates those amounts on its employer shared responsibility webpage. For more information, see EBIA’s Health Care Reform manual at Section IX.B (“Cost-Sharing Limits”). See also EBIA’s Self-Insured Health Plans manual at Section XV.D (“Designing Cost-Sharing Features”).
Contributing Editors: EBIA Staff.