Government Announces 2009 Benefit Limits

June 10 , 2008

Two federal agencies recently released information on 2009 thresholds related to group health benefits. Benefits and insurance professionals can look on these announcements as a reminder that it is never too early to start planning for 2009.

The IRS and the Centers for Medicare and Medicaid Services (CMS) issued cost-of-living adjustments related to HSAs/high-deductible health plans (HDHPs) and Medicare Part D drug benefits, respectively.

For the IRS, the announcement is contained in Revenue Procedure 2008-29 and came several weeks before the June 1 statutory deadline. The new 2009 levels are as follows:

• Annual HSA Contribution Levels (as a reminder, all who are eligible by December 1, 2008, may make the full annual contribution):
• For self-only HDHP coverage, it is $3,000, up from $2,900 in 2008
• For family HDHP coverage, it is $5,950, up from $5,800
• Individuals turning age 55 by the end of 2008 have an additional catch-up contribution of $1,000, up from $900

• HDHP Out-of-Pocket Maximums:
• Self-only coverage increases from $5,600 to $5,800
• Family coverage increases from $11,200 to $11,600

• Minimum HDHP Deductibles:
• Self-only coverage increases from $1,100 to $1,150
• Family coverage increases from $2,200 to $2,300

Recall that non-calendar year HDHPs need to use the 2008 limits for plan years that begin in 2008 and extend in 2009. The Revenue Procedure is available at www.treas.gov/press/releases/reports/rp13970407.pdf. Release of these amounts presents a good opportunity to discuss consumer-driven health care. Despite recent bad press, HSAs are an increasingly viable option for employers of all sizes in 2009. Infinisource has a complete HSA option.

For CMS, the announcement was contained in a notice that details certain adjustments to the standard Medicare Part D benefit. Employers are required to compare this standard benefit to the prescription drug coverage offered under their own group health plans in determining whether that coverage is creditable. Then, employers must notify all plan participants who are eligible for Medicare Part D before November 15, 2008. They must also notify CMS no later than the 60th day of the plan year.

For 2009, the standard Medicare Part D benefit has the following characteristics (representing a 7.5 percent increase from 2008):

• Initial Deductible: $295, up from $275
• Coverage Amount: $2,700, up from $2,510
• Out-of-Pocket Threshold (including the “donut hole”): $4,350, up from $4,050
• Catastrophic Copayments:
• Generic Drugs: $2.40 per drug, up from $2.25
• Other Drugs: $6.00 per drug, up from $5.60

Medicare Part D notice responsibilities are not to be taken lightly. Infinisource can help with its blanket mailing service. For more information, please contact our Blanket Mailing team at 800-300-3838.