HHS 2020 Benefit Limits and Updates
The Department of Health and Human Services (HHS) has released final regulations with the benefit and payment parameters for plan years beginning on or after January 1, 2020, along with a few other insurance market and Exchange-related final regulations. Although largely aimed at insurers and state regulators, the regulations include provisions of interest to employers and their advisors. Here are two key highlights.
A. Annual Cost-Sharing Limits. HHS has increased the maximum annual limitation on cost-sharing for 2020 to $8,150 for self-only coverage and $16,300 for other than self-only coverage (up from $7,900 and $15,800 for 2019).
HHS finalized a proposed change to the way it calculates this adjustment that takes into account increases in individual health insurance premiums, acknowledging that the change will result in higher cost-sharing limits. The final limits for 2020 are less than the proposed limits because data inputs used in the formula were updated after publication of the proposed regulations. This formula also affects adjustments to employer shared responsibility penalties under Code § 4980H.
B. Generic Drugs.Health plans are not required to count drug manufacturer coupons toward the annual limit on cost-sharing when a medically appropriate generic equivalent is available.
- However, HHS declined to finalize a proposal that would have allowed plans that cover both a brand-name prescription drug and its generic equivalent to consider the brand-name drug to not be an essential health benefit.
- Also not finalized was a proposal to create an exception to the prohibition on midyear coverage modifications that would have allowed midyear prescription-drug formulary changes.
- Note: The provision on coupons is intended to discourage providers and patients from choosing expensive brand-name drugs when a less expensive and equally effective alternative is available.
There were additional updates about the Exchange & SHOP Enrollment and the so-called “Silver Loading” – a state-level practice that allows insurers to increase premiums on silver-level Exchange plans to compensate for reduced federal reimbursements. Those details can be found in the Fact Sheet linked below.