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An Update on Preventive Services Coverage and Out-of-Pocket Maximums

Breast cancer exam_181681331by Brian McLaughlin

On May 12, the Departments of Labor, Health & Human Services and Treasury addressed frequently asked questions about the Affordable Care Act’s requirement for a non-grandfathered group health plan to cover in-network preventive items and services (including contraception) without any cost sharing requirements. Here are some particulars:


Plans must cover, without cost sharing, at least one form of contraception identified by the FDA.

  • Because a plan covers some forms of oral contraceptives, IUDs, and diaphragms without cost sharing does not mean that it can completely exclude other forms of contraception.
  • If multiple services and FDA-approved items within a contraceptive method are medically appropriate for an individual patient, the plan may use reasonable medical management techniques to determine which products to cover without cost sharing with respect to that individual. However, if the individual’s attending provider recommends a particular service or FDA-approved item based on a determination of medical necessity with respect to that individual, the plan must cover that service or item without cost sharing.
  • For hormonal contraceptive methods, coverage must include oral contraceptive methods (combined, progestin-only, and extended/continuous use), injectables, implants, the vaginal contraceptive ring, the contraceptive patch, emergency contraception (Plan B/Plan B One Step/Next Choice, Ella), and IUDs with progestin.

The clarifying guidance applies to plan years beginning on or after August 1, 2015.

Well-Woman Preventative Care for Dependents

Plans that covers dependent children are required to cover, without cost sharing, recommended women’s preventive care services for dependent children, including recommended preventive services related to pregnancy, such as preconception and prenatal care.


It is impermissible for a plan to impose cost sharing with respect to anesthesia services performed in connection with the preventive colonoscopy if the attending provider determines that anesthesia is medically appropriate for the individual.

BRCA Genetic Testing

Plans must cover, without cost sharing, recommended genetic counseling and breast cancer ("BRCA") genetic testing for a woman who has not been diagnosed with BRCA-related cancer but who previously had breast cancer, ovarian cancer, or other cancer as long as the woman has not been diagnosed with BRCA-related cancer.

Sex-Specific Recommended Preventive Services

Plans cannot limit sex-specific recommended preventive services based on an individual’s sex assigned at birth, gender identity, or recorded gender. Whether a sex-specific recommended preventive service that is required to be covered without cost sharing is medically appropriate for a particular individual is determined by the individual’s attending provider such as, for example, providing a mammogram or pap smear for a transgender man who has residual breast tissue or an intact cervix.

On May 26, 2015, the Departments issued new FAQs further clarifying that starting with the 2016 plan year, the self-only annual limitation on cost sharing for non-grandfathered plans ($6,850 for 2016) applies to each individual, even if the individual is enrolled in family coverage. This rule applies to all non-grandfathered group health plans, including self-insured plans, large group health plans, and high-deductible health plans. The Departments also provided the following example:

Assume that a family of four individuals is enrolled in family coverage under a group health plan in 2016 with an aggregate annual limitation on cost sharing for all four enrollees of $13,000. Assume that individual #1 incurs claims associated with $10,000 in cost sharing and that individuals #2, #3, and #4 each incur claims associated with $3,000 in cost sharing (in each case, absent the application of any annual limitation on cost sharing).

In this case, because the self-only maximum annual limitation on cost sharing ($6,850 in 2016) applies to each individual, cost sharing for individual #1 for 2016 is limited to $6,850, and the plan is required to bear the difference between the $10,000 in cost sharing for individual #1 and the maximum annual limitation for that individual, or $3,150. With respect to cost sharing incurred by all four individuals under the policy, the aggregate $15,850 ($6,850 + $3,000 + $3,000 + $3,000) in cost sharing that would otherwise be incurred by the four individuals together is limited to $13,000, the annual aggregate limitation under the plan, under the assumptions in this example, and the plan must bear the difference between the $15,850 and the $13,000 annual limitation, or $2,850.

Brian McLaughlin is vice president of USI Affinity’s Benefit Solutions Group.


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