A Primer on Changes to 2021 Group Health Plans

​While most business owners and executives have been fretting about the COVID-19 pandemic and the effects on the economy and the survival of their business, now is a good time to conduct a review of group health plans in light of changes and new rules for 2021.

Here are some of the main changes that you should consider ahead of the new year:

2021 out-of-pocket limits:

• $8,550 for self-only coverage
• $17,100 for family coverage

 
For HSA-compatible high-deductible health plans, the out-of-pocket limits for HDHPs with attached health savings accounts for 2021 are:

• $7,000 for self-only coverage
• $14,000 for family coverage

 
New preventive care recommendations
ACA-compliant health plans are required to cover preventive care services with no out-of-pocket costs, and new ones that become effective in 2020 and 2021 include:

• Perinatal depression prevention
• HIV prevention pill for healthy people at risk
• Updated recommendation for prevention of BRCA 1 and 2-related cancer
• Updated recommendation for breast cancer: medication use to reduce risk
• Updated recommendation for hepatitis screening
• Updated recommendation for screening for unhealthy drug use in adults

 
Flexible spending accounts
This year, the IRS issued a notice that increased the maximum allowable amount of unused funds at year end in FSAs that can be carried over to the next year.

The notice increases the maximum $500 carryover amount for 2020 or later years to an amount equal to 20% of the maximum health FSA salary reduction contribution for that plan year. That means the health FSA maximum carryover from a plan year starting in calendar year 2020 to a new plan year starting in calendar year 2021 is $550.

Additionally, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) allows employers to remove restrictions that funds in FSAs, HRAs, and HSAs cannot be used for over-the-counter medications. This is not a requirement that employers relax this rule for their FSA plans, but it allows them to choose to do so.
 
Summary of benefits and coverage
There are new Summary of Benefits and Coverage (SBC) materials and supporting documents that must be used for all plans that incept on or after January 1, 2021.

Please remember that any changes to benefits in your group plan must be reflected in the SBC plan document and summary plan description.

The takeaway
2021 is fast approaching and with all the chaos of 2020, it would be wise to get a head start on understanding changes in store for the plans you offer.