2020 ACA Inflation Adjustments

HHS Issues Final 2020 ACA Out-of-Pocket Maximums

The Department of Health and Human Services (HHS) has issued the final 2020 out-of-pocket maximums for non-grandfathered group health plans. These limits apply to all out-of-pocket costs for in-network essential health benefits. These limits increase by 3.16% from the 2019 final cost-sharing limits.

Self Only Coverage : $8,150 (increased from $7,900 in 2019)
Family Coverage : $16,300 (increased from $15,800 in 2019)

It is important to note that there are two sets of limits on out-of-pocket expenses for health plans which can be a source of confusion for employers: the HHS annual out-of-pocket limits for ACA-compliant plans and the IRS out-of-pocket limits for HSA-qualified high-deductible health plans. The HHS annual out-of-pocket maximums are higher than those set by the IRS, but to qualify as HSA-compatible, a plan must not exceed the IRS’s lower out-of-pocket maximums. See the RBG News article 2020 HSA Guidelines Released for additional information on 2020 HSA contribution limits, minimum deductibles and maximum out-of-pocket limits.

2020 ACA Employer Mandate Penalty Amounts

The employer mandate applies to applicable large employers (ALE); meaning employers with 50 or more full-time employees and/or full-time equivalent employees during the prior year. Employees who work 30 or more hours per week are considered full-time. Employers subject to the mandate may be assessed penalties if at least one ACA full-time employee receives subsidized coverage through the exchange.

The HHS Notice of Benefit and Payment Parameters for 2020 provided the 2020 PAP (premium adjustment percentage) and with this information the 2020 employer mandate penalties are determined as shown below:

The 2020 Affordability Threshold under 4980H(b) has not yet been determined.