Maximum Out-of-Pocket Limits Updated for 2025

For the first time in a decade, HHS and CMS announced a decrease to inflation-adjusted maximum out-of-pocket limits for group health plans for 2025.

December 07, 2023

On November 15, 2023, the Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services (CMS) published the Notice of Benefit and Payment Parameters for 2025 Proposed Rule, along with an accompanying press release and fact sheet. The annual Notice details regulatory updates for public marketplaces and other Affordable Care Act (ACA) requirements. Within the fact sheet, HHS and CMS announced the updated inflation-adjusted maximum out-of-pocket (MOOP) limits for non-health savings account (HSA)/high-deductible (HDHP) group health plans. The 2024 maximum annual limitation on cost sharing that a group health plan can impose for the 2025 plan year is $9,200 for individual coverage and $18,400 for family coverage, a roughly -2.6% decrease over the 2024 limits.

The 2025 maximums for non-HDHP/HSA plans can be found below (with information for the previous 10 years). The Internal Revenue Service (IRS) publishes the annual inflation-adjusted amounts for HDHP/HSA plans generally around the second quarter of the year (typically May or June), so the 2025 maximums have not yet been announced.

Key Actions

  • Consider the inflation-adjusted limits when planning for the 2025 plan year.
  • Review court ruling in HIV and Hepatitis Policy Institute v. HHS with legal counsel, carriers/vendors and TPAs to discuss potential implications for group health plans, particularly employers sponsoring HDHPs.
  • Monitor for potential explanatory HHS guidance released in response to court ruling in HIV and Hepatitis Policy Institute v. HHS.

Maximum Out-of-Pocket Limits by Year
  HSA/HDHPs All Other Group Health Plans
  Self-Only Family Self-Only Family
2025 TBA TBA $9,200*
2024 $8,050 $16,100 $9,450* $18,900
2023 $7,500 $15,000 $9,100* $18,200
2022 $7,050 $14,100 $8,700* $17,400
2021 $7,000 $14,000 $8,550* $17,100
2020 $6,900 $13,800 $8,150* $16,300
2019 $6,750 $13,500 $7,900* $15,800
2018 $6,650 $13,300 $7,350* $14,700
2017 $6,550 $13,300 $7,150* $14,300
2016 $6,550 $13,100 $6,850* $13,700

* Embed self-only MOOP for family coverage

Under a policy change that began in 2023, HHS and CMS will publish the following limits by January of the year preceding the applicable benefit year: (i) premium adjustment percentage, (ii) maximum annual limitation on cost sharing, (iii) reduced maximum annual limitation on cost sharing and (iv) required contribution percentage.

Ongoing Legal Challenge to ACA Definition of Cost-Sharing; No Enforcement Changes Expected Pending New Guidance

Not covered in HHS/CMS’ guidance with the 2025 inflation-adjusted MOOP limits, but related, employer plan sponsors should also be aware of ongoing legal and regulatory activity that may eventually impact the ACA cost-sharing limits. In late September 2023, the U.S. District Court for the District of Columbia issued a ruling in the case HIV and Hepatitis Policy Institute et al. v. HHS. The court’s ruling vacated portions of an HHS regulatory provision regarding the definition of cost sharing limits under the ACA and the application of prescription drug manufacturing assistance. For additional context and insight, please see our article on the court’s ruling and please listen to the replay of our November 2023 Regulatory & Compliance Update webinar.

While the District Court opinion creates some uncertainty for employer plan sponsors, on November 28, 2024, HHS filed a notice of appeal to the D.C. Circuit Court of Appeals to challenge the decision. Additionally, on November 27, 2023, HHS indicated in a request for clarifications from the District Court that it would undertake rulemaking to address any issues remaining open after a final decision, but “[p]ending the issuance of a new final rule, HHS does not intend to take any enforcement action against issuers or plans based on their treatment of such manufacturer assistance (emphasis added).” This means that employers may effectively continue to administer plans as previously designed with respect to manufacturer assistance until additional rulemaking is finalized.

Next Steps

Employer plan sponsors should consider these inflation-adjusted limits when planning for the 2025 plan year. Business Group on Health will update members on the applicable 2025 plan year dollar amounts for HDHP plans paired with HSAs when the IRS publishes these inflation-adjusted limits, and will keep members informed of legal and regulatory developments impacting the ACA cost-sharing limits.

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