📢 Compliance Newsletter: Annual Out-of-Pocket Maximum Adjustments Announced for 2027

Overview:
The U.S. Department of Health and Human Services (HHS), through guidance issued by the Centers for Medicare & Medicaid Services (CMS) in late January 2026, has released the updated Annual Out-of-Pocket Maximum (OOPM) limits that apply for plan years beginning on or after January 1, 2027 under the Affordable Care Act (ACA). These limits are key compliance metrics for group health plans as they set the maximum amount participants may be required to pay in cost sharing for essential health benefits in a plan year.

🧾 New ACA Out-of-Pocket Maximum Limits for 2027

Coverage Type	2026 Limit	2027 Limit	Change
Individual (self-only)	$10,600	$12,000	↑ ~13.2%
Family (other than self-only)	$21,200	$24,000	↑ ~13.2%

These limits apply to non-grandfathered group health plans’ cost sharing for essential health benefits (EHBs) (e.g., inpatient/outpatient care, drugs, emergency services). Plans must ensure participants cannot be required to pay more OOP in cost sharing than these caps.

📅 Why This Matters to Plan Sponsors

1. Plan Design Adjustments
Plan sponsors should consider whether to update their benefit designs to reflect the new maximums. Employers are not required to set plan limits equal to the maximum — but they may not exceed them.

2. Compliance Documentation and Materials
If your plan will adopt the new 2027 OOP maximums:

• Update Summary Plan Descriptions (SPDs) and Summary of Benefits & Coverage (SBCs).
  
• Revise employee communication materials and open enrollment guides.
  
• Confirm third-party administrators (TPAs), pharmacy benefit managers (PBMs), and system vendors incorporate the updated limits by the start of the plan year.
  

3. Embedded Limits in Family Plans
Under ACA rules, an embedded annual out-of-pocket maximum must be applied to each individual covered under a family plan, and that embedded cap may not exceed the individual OOPM limit.

4. Distinction from HDHP/HSA Limits
These ACA OOP maximums differ from the IRS limits that apply to High-Deductible Health Plans (HDHPs) that qualify for Health Savings Accounts (HSAs). The IRS typically announces HDHP/HSA limits later in the year.

🧠 Key Takeaways

• For plan years beginning on or after January 1, 2027, the ACA out-of-pocket maximums will be $12,000 (individual) and $24,000 (family).
  
• These figures reflect a roughly 13.2% increase over the prior year’s limits.
  
• Employers and plan administrators should assess plan designs, update compliance documents, and coordinate with vendors ahead of the 2027 plan year. 

For more follow us on Instagram, Facebook, Twitter, & LinkedIn.