2021 Plan Limits and Final Coupon Guidance Released

Contacts

Compliance Consultant
+1 314 594 5902
May 27, 2020

IRS Announces 2021 HDHP Limits

Now that the U.S. Department of Health & Human Services (HHS) has released its Notice of Benefit and Payment Parameters for 2021 and the IRS has released Rev. Proc. 2020-32, we know the 2021 cost-of-living adjustments for non-grandfathered plans subject to the Affordable Care Act (ACA), high-deductible health plans (HDHPs), and health savings accounts (HSAs). For comparison purposes, the 2020 and 2021 limits are below:

ACA Limits

Item

2021

2020

Out-of-Pocket Maximum Limit[1]

Self-only: $8,550

Family: $17,100

Self-only: $8,150

Family: $16,300

 

HDHP/HSA Limits

Item

2021

2020

HDHP Minimum Deductible

Self-only: $1,400

Family: $2,800

Self-only: $1,400

Family: $2,800

HDHP Maximum Out-of-Pocket

Self-only: $7,000

Family: $14,000

Self-only: $6,900

Family: $13,800

HSA Annual Contribution Maximum

Self-only: $3,600

Family: $7,200

Self-only: $3,550

Family: $7,100

HSA Catch-up Contribution Limit (age 55 and older)

$1,000

$1,000

Final Rules for Drug Coupons and HDHPs

The Notice of Benefit and Payment Parameters for 2021 also contains guidance on the application of prescription drug manufacturer coupons (“coupons”) and out-of-pocket maximum limits. Last year, the Notice of Benefit and Payment Parameters for 2020 announced that insurers and group health plans could exclude a coupon for a brand-name drug from a participant’s out-of-pocket maximum limit only if there was a medically appropriate generic available. The enforcement of this provision was suspended because of concerns about HSA eligibility if a participant was enrolled in a HDHP. The concern was that participants were becoming ineligible to contribute, or receive contributions, to their HSAs if the participant was being credited for the full value of the drug to their deductible but only paying a fraction of the cost. Currently, discounts must be ignored when determining if a participant met their HDHP deductible.

Under the 2021 Notice, the DOL allows, but does not require, group health plans to exclude the value of prescription drug coupons from a participant’s out-of-pocket maximum. This is no longer dependent on a medically equivalent generic being available. Keep in mind some states may have laws that impact how fully insured plans manage discounts.


[1] This limit does not apply to plans that remain grandfathered under the ACA.

The information contained herein is for general informational purposes only and does not constitute legal or tax advice regarding any specific situation. Any statements made are based solely on our experience as consultants. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. The information provided in this alert is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients. This is not legal advice. No client-lawyer relationship between you and our lawyers is or may be created by your use of this information. Rather, the content is intended as a general overview of the subject matter covered. This agency is not obligated to provide updates on the information presented herein. Those reading this alert are encouraged to seek direct counsel on legal questions. © 2020 Marsh & McLennan Agency LLC. All Rights Reserved.