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Embedded OOP Customer Impacts

Since 2016, most health plans cannot allow any individual, including those with family coverage, to spend more than the individual out-of-pocket (OOP) maximum expense established under the Affordable Care Act (ACA). Commonly referred to as an embedded individual OOP maximum, this rule could impact a family’s total health care expenses, especially if only one family member incurs high medical expenses. The 2020 ACA OOP maximum amounts are $8,150 for an individual and $16,300 for a family.

How it works

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.

Considerations for Health Savings Account (HSA) plans

HSA-compatible high-deductible health plans (HDHPs) need to follow additional Internal Revenue Service (IRS) rules for OOP maximums. Those rules:

  • Require deductible thresholds to be met before a plan begins to pay coinsurance
    • Thresholds are set for 1) self-only coverage for individuals, and 2) family coverage for an entire family, including any covered individuals
  • Allow a separate individual deductible that is at least as high as the minimum family deductible threshold

More information

Learn more about cost-sharing limits.