Skip to main content

Health plan deductibles and OOPMs: Key concepts for employers

health plan deductibles

Deductibles and out-of-pocket maximums (OOPMs) are important cost-sharing parameters for health plans. This compliance overview summarizes key rules for employers regarding these limits, including the special limits for high-deductible health plans (HDHPs) and the Affordable Care Act’s (ACA) OOPM on essential health benefits. 

[Download the full PDF report] 

Understanding deductibles and OOPMs 

Deductibles and OOPMs play a central role in how health plan costs are shared between the plan and the enrollee. Here’s  important terms employers need to know: 

  • Deductible: The amount a member must pay out-of-pocket for covered services before the health plan begins to contribute. 

  • Out-of-Pocket Maximum (OOPM): The annual cap on what a member pays for covered services. Once reached, the health plan covers 100% of additional covered costs for the rest of the year. 

  • Premium trade-off: Plans with higher deductibles and OOPMs often come with lower monthly premiums, and vice versa. 

While employers have flexibility in plan design, certain federal requirements apply: 

  • HDHP rules: HDHPs paired with Health Savings Accounts (HSAs) must meet IRS-established minimum deductibles and maximum OOPMs. 

  • ACA compliance: All health plans must adhere to the ACA’s OOPM limits for essential health benefits (EHBs). 

  • Annual adjustments: These limits are updated annually for inflation, so employers should review their plan designs before each new plan year to ensure compliance. 

Questions? 

Contact TruePlan! Our team of advisors can help you with questions within the scope of employee benefits.   

This content is for informational purposes only. It has been partially generated from an AI language model, which may not always be exhaustive or tailored to individual circumstances. We encourage you to contact one of our experts for more information. We assume no liability arising from any use of this content. 

Popular posts from this blog

Employee Benefits Offerings: What Perks Can You Add?

Employee benefits can play a crucial role in attracting and retaining top talent. Beyond compensation and bonuses, offering a variety of perks can significantly enhance employee satisfaction and productivity. But what should you include in your employee benefits offerings?   What are employee benefits?   Employee benefits encompass compensation, bonuses and various perks outside an employee's wage. By offering flexible employee benefits, you can improve employee productivity and loyalty while attracting and retaining talented candidates.   Personalized benefits examples   The type of benefits offered can vary by industry. We've compiled some of the most popular options to help you explore possible employee benefits strategies .  1. Social opportunities   Employee perks don't always have to be tied to a benefits package. Sometimes, the best way to engage your employees can be through social opportunities. Group activities can help im...
Read more

What is Risk Management? 4 Key Topics to Know

Understanding risk management in retirement programs  Managing a retirement program is complex, with multiple layers of risk. For organizations and their leadership, understanding and mitigating these risks is crucial to ensuring the long-term success and reliability of these programs.   It often leaves human resource professionals, employers and program administrators questioning, "What is risk management, and how can we excel at it?"  This blog post explores the various aspects of risk management in retirement program administration and provides actionable insights to help organizations better manage these risks.  The importance of risk management  Retirement programs are designed to benefit participants and beneficiaries, but they come with their own set of risks. These risks can be broadly categorized into four main topics:  Fees  Administration  Investments  Cybersecurity  Each of these topics requires meticulous attention and ...
Read more

What is HR vendor management? Overview with scenarios

Vendor management can be a litigious environment where efficiency, transparency and risk mitigation are paramount. With the right advisor in your organization’s corner, you’ll feel more confident navigating vendors and managing their services, ensuring streamlined processes and strategic alignment.   In this blog post, we'll cover the basics: What vendor management in HR entails, why it's important, how it can transform businesses and some scenarios in a few business types. Level up your knowledge and find the right partners to thrive.  Understanding vendor management in HR  Vendor management in HR involves the systematic management of third-party suppliers who provide goods and services essential to HR operations. This includes managing contracts, ensuring compliance with service level agreements and optimizing vendor performance to align with a company's long-term business goals.  A robust vendor management strategy can provide organizations with a structured ...
Read more