As Brokers prepare for open enrollment, it’s important to educate Small Groups on the value of different benefits offerings, so they can not only utilize them, but also cut down on health care costs. In doing so, Brokers should inform Small Groups of the increases to out-of-pocket dollar limits for the 2021 calendar year prior to making plan selections or renewals.
Every year, the Internal Revenue Service (IRS) reviews and adjusts contribution, deductible and out-of-pocket limits for high deductible plans (HDHPs) and health savings accounts (HSAs) to reflect inflation in the marketplace. These changes affect both self-coverage plans (for one individual) and family coverage plans (for two or more individuals). "Employers should consider these limits when planning for the [upcoming] benefit plan year and review plan communications to ensure that the appropriate limits are reflected," Damian A. Myers, senior counsel at law firm Proskauer, told the Society for Human Resource Management (SHRM).
As you prepare for open enrollment, check out the adjusted dollar limits for 2021 below.
2021 HDHP minimum deductible
Deductibles, which are the amounts paid out-of-pocket by the policy holder, were unchanged from 2020:
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$1,400 for self-only coverage
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$2,800 for family coverage
2021 HDHP out-of-pocket maximum
The annual out-of-pocket expenses for an HDHP in 2021 will increase slightly from 2020. Compared to last year, those with individual coverage will pay up to $100 more in out-of-pocket expenses, while out-of-pocket maximum expenses will increase by $200 for those with family coverage. See below:
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$7,000 for self-only coverage (compared to $6,900 in 2020)
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$14,000 for family coverage (compared to $13,800 in 2020)
2021 HSA contribution limits
HSA contribution limits will modestly increase in 2021, as they are adjusted every year for inflation. This means those with individual plans will be able to contribute $50 more in 2020, while those with family plans will be able to contribute $100 more. Employer HSA contributions also count toward these annual contribution limits. The catch-up contribution limit for those over the age of 55 is fixed by statute and will remain at $1,000. Here are the 2021 HSA contribution limits:
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$3,600 for self-only coverage (compared to $3,550 in 2020)
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$7,200 for family coverage (compared to $7,100 in 2020)
Unlike flexible spending accounts (FSAs), the money you contribute to an HSA never expires. If you don’t spend it during the year you contributed, you can keep rolling it over, even if you change employers.
"While the increases are modest, they are an additional opportunity for Americans to prepare and pay for their health care needs," Harrison Stone, general counsel at HSA services firm ConnectYourCare, told SHRM. "Annual contribution-limit increases allow HSAs to maintain their value and further grow their role as a key retirement-planning building block."
2021 ACA Out-of-Pocket Maximum Limits
In addition to HSA and HDHP contributions, the Department of Health and Human Services finalized out-of-pocket expenses for Group health plans, as part of the final Notice of Benefit and Payment Parameters for 2021. Out-of-pocket expenses exclude premiums, but include co-payments, deductibles and coinsurance amounts. Here are the 2021 maximum out-of-pocket limits:
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$8,550 for self-coverage (compared to $8,150 in 2020)
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$17,100 for family coverage (compared to $16,300 in 2020)
These limits apply to all out-of-pocket costs for in-network essential health benefits provided by non-grandfathered plans.
Prepare for Open Enrollment
With the help of a trusted Broker advising them, Small Groups can make the best decision about what plans to offer in a digital marketplace. Education, though, is just one piece of the puzzle when it comes to preparing for open enrollment. In addition to education, Brokers will need the right tools to ensure a smooth and profitable open enrollment season.
Small Group insurance technology like FormFire can help. From quoting more benefit options to comparing and selecting health plans online, FormFire streamlines the Small Group benefits process from start to finish. Contact FormFire today if you have questions or would like to request a demo.