When we talk about the cost of health insurance, we tend to focus mainly on the monthly premium an individual must pay for coverage.   However, individuals are also required to make additional out-of-pocket payments to satisfy deductible, co-payment, and coinsurance obligations under a policy, which can be costly.  The Affordable Care Act provides relief to consumers by limiting these out-of-pocket payments to a maximum of $6,350 for an individual and $12,700 for a family.

In February, the Obama Administration issued an FAQ delaying implementation of these out-of-pocket maximum limitations until 2015 for all self-funded employer group plans and for fully insured employer group plans offered in the large group and small group markets.

This transitional policy does not apply to medical and behavioral health benefits offered under a group plan.  Under the FAQ, medical benefits are still subject to the out-of-pocket maximum limitations.  Additionally, group plans are prohibited from imposing a separate annual out-of-pocket maximum on behavioral health benefits under the Mental Health Parity and Addiction Equity Act of 2008.  Therefore, medical and behavioral health benefits together will be subject to a single combined out-of-pocket maximum up to the statutory limits set forth in the Affordable Care Act and as described above.

However, under the FAQ, group health plans may impose a separate or unlimited out-of-pocket maximum on pharmacy benefits.  Since many group health plans use separate pharmacy benefit managers to administer these benefits, consumers with serious illnesses may continue to face significant out-of-pocket expenses in 2014.

For example, assume that a group plan uses separate vendors to administer its medical benefits and pharmacy benefits and continues to apply a separate out-of-pocket maximum for each of those benefits.  The net effect is that the out-of-pocket maximum limitations are increased from $6,350 (individual) and $12,700 (family), with medical and pharmacy combined as originally required under the Affordable Care Act, to $12,700 (individual) and $25,400 (family) with medical and pharmacy separated, but only for the year 2014, as permitted under the FAQ.

Furthermore, if a group plan utilizes a separate vendor to administer its pharmacy benefits, and the plan does not currently have any out-of-pocket maximum on those benefits, then the plan does not have to include one until 2015.  That is, no limit is required for out-of-pocket expenses for separately administered pharmacy benefits that currently do not have a limit.

It is unclear what other benefits, in addition to pharmacy, will carry separate or unlimited out-of-pocket maximums under the FAQ because they fall outside of medical or behavioral health.