As we head into a new plan year, it’s essential for employers to review their health plan designs, especially when it comes to deductibles and out-of-pocket maximums (OOPMs). These two elements are at the heart of cost-sharing between employers, employees, and insurers, and how they are structured can significantly impact your team’s experience and your company’s bottom line.
The Basics: Health Insurance Deductibles vs. Out-of-Pocket Maximums
Deductibles are the upfront amount employees pay for covered healthcare before the plan begins sharing costs. Out-of-pocket maximums (OOPMs), on the other hand, cap the total amount employees will pay in a year for essential health benefits (EHBs). After hitting this cap, the plan covers 100% of in-network, covered services for the rest of the year.
These values reset annually and vary based on plan design, especially for High-Deductible Health Plans (HDHPs), which have their own unique rules tied to Health Savings Account (HSA) eligibility.
HDHP Requirements: Know the Deductible and OOPM Limits
To qualify as an HDHP and therefore allow HSA contributions, health plans must meet IRS-defined minimum deductibles and stay within specific maximum out-of-pocket limits.
2025 HDHP Deductible and OOPM Limits:
Minimum Deductible:
Self-only: $1,650
Family: $3,300
Maximum OOPM for HDHPs:
Self-only: $8,300
Family: $16,600
If your HDHP includes embedded deductibles (individual deductibles within family coverage), make sure they meet the minimum family deductible requirement to remain compliant.
Embedded vs. Aggregate Deductibles: Why the Structure Matters
Embedded deductibles and OOPMs apply separately to each family member. Once one member meets the individual limit, the plan begins paying their expenses, even if the overall family limit hasn’t been met. This structure can reduce employee burden but may increase total plan costs.
Aggregate structures, on the other hand, require the full family deductible to be met before benefits kick in. Employers have flexibility here, but embedded OOPMs are required under the Affordable Care Act (ACA) if the family OOPM exceeds the individual limit.
ACA Compliance for 2025
To ensure ACA compliance, your plan’s limits should not exceed:
• Self-only: $9,200
• Family: $18,400
If the family OOPM exceeds $9,200, each individual must have a separate OOPM no higher than the self-only limit.
Avoiding Compliance Pitfalls
One key compliance issue arises when HDHPs with embedded deductibles pay claims before the required family deductible is met. For example, if your HDHP allows claims to be paid after someone meets a $1,650 individual deductible, even though the plan has a $3,300 family deductible, it may disqualify the plan as an HDHP.
Another risk is having no overall family OOPM. If multiple individual deductibles push total costs past ACA limits, your plan may become non-compliant.
What Employers Should Do Now
Review your deductible and OOPM structure to ensure compliance with IRS and ACA requirements for 2025
Confirm your HDHP designs align with minimum deductible and maximum OOPM thresholds, especially if you use embedded cost-sharing
Communicate clearly with employees about how their deductibles and OOPMs work, including how preventive care is covered without cost-sharing
Consult with your McConkey team for a plan audit or redesign ahead of your renewal. Small missteps in structure can have big implications
Need help navigating your health plan compliance?
McConkey’s benefits team is here to help you design, evaluate, and optimize your employee benefits strategy. Reach out today to get started.
