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Open Enrollment: Plan Changes for 2023

As always, a new year brings new changes for group health plan sponsors. As open enrollment approaches, sponsors should take note of the required changes for plan years beginning on or after January 1, 2023, and review plan documents to make sure all changes are incorporated.

Additionally, any plan changes must be communicated to plan participants via an updated summary plan description (SPD) or summary of material modifications (SMM).

ACA Affordability Standard: Under the Affordable Care Act’s (ACA) employer shared responsibility rules, applicable large employers (ALEs) are required to offer affordable, minimum value health coverage to their full-time employees (and dependent children) or risk paying a penalty.

On August 1st of this year, the IRS announced that the affordability percentage for plan years beginning in 2023 will drop to 9.12%. This is both the largest decrease (from 9.61%) since these rules were implemented and the lowest percentage to date. Employers may have to lower their employee contributions significantly for 2023 to meet this adjusted percentage.

Out-of-Pocket Maximum: Non-grandfathered health plans have limits on cost sharing for essential health benefits (EHB). For plans beginning on or after January 1, 2023, the limit on total enrollee cost is $9,100 for self-only coverage and $18,200 for family coverage. Similarly, high deductible health plans (HDHPs) compatible with health savings accounts (HSAs) will have limits of $7,500 and $15,000, for individuals and families, respectively.

Note that if your plan uses multiple service providers to administer benefits, you must confirm that the plan coordinates all claims for EHB across all providers, with a combined limit that does not exceed the 2023 maximum.

Health FSA Contributions: The ACA places a dollar limit on employees’ salary reduction contributions to a health flexible spending account (FSA) offered under a cafeteria plan. An employer may set its own dollar limit on employees’ salary reduction contributions to a health FSA, as long as that limit does not exceed the ACA’s maximum limit in effect for the plan year.

For 2022 plan years, the health FSA limit is $2,850. The health FSA limit has not yet been released for 2023 plan years.

HDHP and HSA Limits: Employers should check to be certain that their plans’ HDHP and HSA contribution limits are within the revised figures for 2023, per the table below:

Type of Limit   2022 2023 Change
HSA Contribution Limit Self-only $3,650 $3,850 Up $200
HSA Contribution Limit Family $7,300 $7,750 Up $450
HSA Catch-up Contributions (not subject to adjustment for inflation) Age 55 or older $1,000 $1,000 No change
HDHP Minimum Deductible Self-only $1,400 $1,500 Up $100
HDHP Minimum Deductible Family $2,800 $3,000 Up $200
HDHP Maximum Out-of-pocket Expense Limit (deductibles, copayments and other amounts, but not premiums Self-only $7,050 $7,500 Up $450
HDHP Maximum Out-of-pocket Expense Limit (deductibles, copayments and other amounts, but not premiums Family $14,100 $15,000 Up $900

There are other changes for plans beginning on or after January 1, 2023, as well as continuing requirements for information to be included in open enrollment packets. Review these changes with your benefits provider as soon as possible to be sure you remain in compliance in the new plan year.

Questions about benefits packages and the changes for the 2023 plan year? Contact Consolidated Insurance.

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