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Aggregate vs Embedded: Interesting “Glitch”
Wednesday, December 9, 2015 6:35
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So the other day I was quoting a case for a family (HSA plan, natch), and ran across this rather interesting puzzler:
[click to embiggen]
It appeasers that the plan with the lower deductible (and thus total out-of-pocket) is substantially less expensive than the one with more family finances at-risk. In all other respects that I could see they were identical: deductible then 100%. So I reached out to the folks at InHealth for clarification.
Regular readers may recall that ACA-compliant health insurance plans are no longer allowed to use aggregate deductibles, but must now use embedded ones only. What I learned from our IH rep is that there’s a rather obscure, but notable, exception. When IH (re-)filed its rates for 2016, it mistakenly included a plan with an aggregate deductible. I thought for sure that this was a no-no, but as JR explained to me, they’re allowed to do that if an individual’s actual out-of-pocket is no more than $6,850 for the year.
So in our example, let’s assume that the Smith’s choose the lower priced plan with a $3,750 deductible. In this case, the aggregate deductible means that the family checkbook would need to spend $7,500 before the 100% coverage kicks in (obviously this excludes mandated first-dollar items). But if Little Joey actually accrues $6,850, then he’s good to go at the 100% from that point on (the rest of the family still has a few hundred to go).
I would presume that this plan will go away for the 2017 plan year, but interesting nonetheless. And hey, learned something new!
Regular readers may recall that ACA-compliant health insurance plans are no longer allowed to use aggregate deductibles, but must now use embedded ones only. What I learned from our IH rep is that there’s a rather obscure, but notable, exception. When IH (re-)filed its rates for 2016, it mistakenly included a plan with an aggregate deductible. I thought for sure that this was a no-no, but as JR explained to me, they’re allowed to do that if an individual’s actual out-of-pocket is no more than $6,850 for the year.
So in our example, let’s assume that the Smith’s choose the lower priced plan with a $3,750 deductible. In this case, the aggregate deductible means that the family checkbook would need to spend $7,500 before the 100% coverage kicks in (obviously this excludes mandated first-dollar items). But if Little Joey actually accrues $6,850, then he’s good to go at the 100% from that point on (the rest of the family still has a few hundred to go).
I would presume that this plan will go away for the 2017 plan year, but interesting nonetheless. And hey, learned something new!
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Source: http://insureblog.blogspot.com/2015/12/aggregate-vs-embedded-interesting-glitch.html
