What You Need to Know About Group Health Insurance Changes for 2022
A new calendar year often means a new benefits year for employers. Several health plans are introducing new options and benefits for 2022. Some government-set limits are changing, too. Here’s a look of what you need to know for the coming year.
HDHP and HSA Limits: Two things that often change annually are limits established by the Internal Revenue Service (IRS). These include High Deductible Health Plan (HDHP) maximum out-of-pocket amounts and Health Savings Account (HSA) contributions. Below is a comparison of 2021 and 2022 amounts.
|Contribution and Out-of-Pocket Limits for HSAs and HDHPs|
|HSA contribution limit (employer + employee)||Self-only: $3,650 Family: $7,300||Self-only: $3,600 Family: $7,200||Self-only: +$50 Family: +$100|
|HDHP maximum out-of-pocket amounts (deductibles, copayments, and other amounts – but not premiums)||Self-only: $7,050 Family: $14,100||Self-only: $7,000 Family: $14,000||Self-only: +$50 Family: +$100|
|HDHP minimum deductibles||Self-only: $1,400 Family: $2,800||Self-only: $1,400 Family: $2,800||No change for either Self-only or Family|
|Source: IRS, as reported by SHRM|
The HSA catch-up contribution for individuals age 55 and older is the same in 2021 and 2022: $1,000.
Affordable Care Act (ACA) Compliant Plans: The U.S. Department of Health & Human Services (HHS) annually sets out-of-pocket or cost-sharing limits. The table below shows the new limits for 2022, and the current 2021 limits.
|Maximum out-of-pocket for ACA compliant plans|
|Self-only: $8,700||Self-only: $8,550||+$150|
|Family: $17,400||Family: $17,100||+$300|
Affordability and Minimum Value: Under the ACA employer mandate, Applicable Large Employers (ALEs) must provide health insurance to full-time employees. If they do not, they face an IRS penalty. Generally, an ALE is an employer with 50 or more full-time or full-time-equivalent employees on average during the previous calendar year.
Offering coverage is not enough, though. Insurance must provide minimum value (Bronze tier or better) and it must be affordable to employees. If you are an ALE and one of your full-time employees goes to the state public exchange to purchase coverage utilizing a premium tax credit, you are subject to noncompliance penalties under IRS Sections 4980H(a) and 4980h(b).
If you are not sure whether your organization is an ALE, CaliforniaChoice offers useful ACA calculators on its website. There’s an ACA Full-Time Equivalent Calculator, an ACA Penalties Calculator, and an ACA Safe Harbor Calculator. Calculators to help you determine your cost per hire, employee turnover, and absenteeism costs are also available.
For plan years starting in 2022, the adjusted contribution percentage for affordability is 9.61%. This marks a decline from 9.83% in 2021.
That means the employee’s share of the premium for the lowest-cost, self-only coverage option cannot exceed 9.61% of the employee’s rate of pay, W2 Box 1 income, or the Federal Poverty Level (FPL).
The Society for Human Resource Management (SHRM) notes this decline could mean what was affordable in 2021 may not be affordable in 2022. If that the case, the employer’s contribution would have to increase even if everything else stays the same as far as benefits and costs.
According to SHRM, if a business offers a 2022 health plan that costs employees no more than $103.14 each month (for employee-only coverage), it will automatically meet the affordability standard under the FPL safe harbor.
If an employer uses the FPL safe harbor, it must be used for all employees It cannot use Rate of Pay for some and FPL for others. In 2021, that FPL safe harbor amount was $104.53 per month.
Surprise Billing: Beyond plan, contribution, and affordability changes, there’s a big “surprise billing” change in 2022. The federal government has issued new regulations that restrict excessive out-of-pocket costs for consumers from surprise and balance billing for out-of-network services.
Surprise and balance billing happens when individuals receive emergency or non-emergency care from health care providers that are outside of their health plan’s network.
Patients frequently go to a hospital because it accepts their insurance, but some physicians and specialists may not be a part of the insurer’s provider network.
Balance billing occurs when a provider bills the patient for something not covered by insurance. Medicare and Medicaid prohibit balance billing. However, it is often standard practice for private insurance.
The New York Times reported in September 2021 that as many as one in five emergency room visits results in a surprise medical bill.
The new federal rule that takes effect January 1, 2022:
- Bans surprise billing for emergency services. (Emergency services must be treated on an in-network basis, without requirements for prior authorization.)
- Bans high out-of-network cost sharing for emergency and some non-emergency services. (Patient cost sharing, such as co-insurance or a deductible, cannot be higher than if services were in-network, and any coinsurance or deductible must be based on in-network provider rates.)
- Bans out-of-network charges for ancillary care (like an anesthesiologist or assistant surgeon) at an in-network facility in all circumstances.
- Bans other out-of-network charges without advance notice. (Health care providers and facilities must provide patients with a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill at a higher out-of-network rate.)
There has been some pushback from hospitals and other providers about the new rule’s arbitration provisions. However, major changes to the measure are not expected before its 2022 implementation.
Talk with a Broker to Learn More: Your insurance broker can provide more information about what’s ahead for 2022. A broker can also help you find health coverage for your employees that fits your company budget and offers more employee choice. If you don’t have a current broker, you can search for one here.