Proposed 2023 OOP Limits and ALE Penalties

Federal regulators have announced publication of proposed 2023 rules for several Affordable Care Act (ACA) requirements, summarized in this fact sheet and overview guidance.

Employers will be particularly interested in the premium adjustment percentage being proposed to index to 1.4408219719 (about 4.6% higher than 2022).  This is used to index maximum out-of-pocket cost-sharing for non-grandfathered health plans and to calculate §4980H penalties for applicable large employers (ALEs).

Annual Out-of-Pocket Maximum for Non-Grandfathered Health Plans
always rounded down to nearest $50, and family always twice the per-person limit
2021 2022 2023
Per Person $8,500 $8,700 $9,100
Per Family $17,100 $17,400 $18,200


ALE Penalties
always rounded down to nearest $10
2021 2022 2023
§4980H(a) Penalty $2,700/yr
§4980H(b) Penalty $4,060/yr


There are a couple more points of interest to employers which may affect 2023 plan designs and claims projections.  These two proposals are described in the announcement as follows.

  • “The 2023 Payment Notice proposed rule also would explicitly prohibit health insurance issuers from discriminating on the basis of sexual orientation and gender identity.”
  • “Additionally, this proposal refines the Essential Health Benefits nondiscrimination policy by requiring issuers to rely on clinical evidence as a basis of the health plan design.”
    • “For example, plans could not be designed to burden people managing chronic conditions with inordinately high prescription costs, absent a clinical rationale.”

While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept  liability  for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting or other professional advice or services. Readers should always seek professional advice before entering into any commitments.

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