Annual Out-of-Pocket Limits
Out-of-pocket limits provide financial protection for you, by limiting certain cost-sharing amounts you must pay for Allowable Charges in a calendar year. The Plan applies two types of out-of-pocket limits, which have different amounts and take into account different expenses. These two limits are described below.
Alliance Direct | Non-Direct
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| Medical Coinsurance Limit (calendar year; includes deductible) |
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| Combined Medical/Prescription Out-of-Pocket Limit (calendar year; includes deductible) |
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The following information summarizes how the out-of-pocket limits work:
- For the “per person” limits, the amounts you pay during the year that are subject to an out-of-pocket limit are added up throughout the year. For the “per family” limits, the amounts you pay for each person in the family are added together throughout the year. When you reach an applicable out-of-pocket limit, you are not required to pay additional amounts subject to the applicable limit for the remainder of the year.
- The medical coinsurance limit does not include copays or prescription drugs.
- Neither the medical coinsurance limit nor the combined medical/prescription out-of-pocket limit include:
- Benefit penalties
- Premiums (including premiums paid for COBRA continuation coverage)
- Amounts paid above Allowable Charges (i.e., amounts that are "balance billed" by a provider)
- Covered services not considered essential health benefits by federal law (such as chiropractic and acupuncture)
- Any reduction in the amounts you are required to pay by a provider or manufacturer, such as through a coupon, rebate, credit, discount, or similar arrangement
- Medical or prescription drug services or expenses that exceed limits set by the Plan (see the Medical Plan “Benefit Summary” and the Prescription Drug Plan section)
- Medical or prescription drug expenses that are not eligible for coverage under the Plan
- The out-of-pocket limits are combined for Alliance Direct and Non-Direct; in other words, your Alliance Direct expenses apply to the Non-Direct limits, and vice versa.
Example of how the medical coinsurance limit works: Carl, his wife Helen, and his daughter Julia have all been incurring Non-Direct medical expenses throughout the year. When they add up the Allowable Charges they have paid toward deductible and coinsurance, they see their progress toward their out-of-pocket limit:
- Carl: $300 (deductible) + $1,000 (coinsurance) = $1,300
- Helen: $300 (deductible) + $3,000 (coinsurance) = $3,300
- Julia: $200 (deductible) + $3,200 (coinsurance) = $3,400
While no one in Carl’s family has reached their $4,000 Non-Direct individual medical coinsurance limit, collectively Carl’s family has paid $8,000 in deductible plus coinsurance, thus reaching the family medical coinsurance limit. For the rest of the calendar year, there will be no cost to Carl for any Allowable Charges subject to the medical coinsurance limit incurred by his family.
Example of how the combined medical/prescription limit works: So far during the year, Jan has paid Allowable Charges of only $3,000 in deductible and coinsurance for Non-Direct medical expenses, so she has not yet met the $4,000 medical coinsurance limit. However, she has also been using several very expensive prescription drugs; her in-network prescription drug coinsurance payments so far during the year add up to $6,100. Therefore, she has reached the combined medical/prescription limit of $9,100 per person. For the rest of the calendar year, there will be no cost to Jan for any Allowable Charges subject to the combined limit, as well as in-network prescription drug expenses.
In addition, Jan has twin sons who both have required several very expensive prescription drugs. Their in-network prescription coinsurance payments so far during the year add up to $5,100 for Tony and to $4,000 for Tom. While neither Tony nor Tom have reached their $9,100 individual combined limit, collectively their out-of-pocket expenses plus Jan’s $9,100 add up to $18,200. Thus, the family has reached the combined medical/prescription limit of $18,200 per family. For the rest of the calendar year, there will be no cost to Jan for any Allowable Charges subject to the combined limit, as well as in-network prescription drug expenses, incurred by her family.
Covered services not considered essential health benefits by federal law are not included in the medical coinsurance limit, nor are they included in the combined medical/prescription limit. The benchmark plan for the state of Utah is utilized for purposes of determining essential health benefits with respect to the Plan. For more information about essential health benefits, see https://www.cms.gov/cciio/resources/data-resources/ehb.html. Following are examples of services that are covered by the Plan (subject to certain limits) but that are not essential health benefits:
- Chiropractic care
- Acupuncture
Non-essential health benefits example: Mike takes several very expensive prescription drugs and also gets regular chiropractic treatments from a Non-Direct provider. After 10 months, he has paid $6,000 of Allowable Charges in prescription drug coinsurance, and he has paid $2,000 of Allowable Charges in deductible and coinsurance for chiropractic treatments. The $6,000 for prescription drugs does not apply toward the medical coinsurance limit, but it does apply toward the combined medical/prescription out-of-pocket limit. The $2,000 for chiropractic does not apply to either limit. Therefore, Mike has met neither the $4,000 medical coinsurance limit nor the $9,100 combined limit.
