Did you know that the Affordable Care Act’s (ACA) out-of-pocket limits are set to rise again in 2026, potentially increasing financial strain on employees? For many businesses, this change poses a compliance challenge and an opportunity to rethink their healthcare strategy. Through effective employee benefits consulting, modern organizations can better manage risk, maintain competitive benefit offerings, and support workforce well-being with clarity and confidence.
Why Out-of-Pocket Limits Matter
Out-of-pocket limits directly impact how much employees pay for healthcare before their insurance fully kicks in. As these limits rise, so does the potential financial burden on workers, especially those who encounter medical emergencies or have chronic conditions.
For employers, this can affect everything from employee satisfaction to retention and productivity. When you understand and respond accordingly to these changes, your business puts itself in a strategic position to offer meaningful, competitive benefits.
Comprehending ACA Out-of-Pocket Limits
The Affordable Care Act sets annual caps on how much individuals and families must pay for covered healthcare services, protecting them from catastrophic costs. These out-of-pocket limits include copayments, deductibles, and coinsurance but do not include premiums.
The Department of Health and Human Services adjusts these limits yearly based on inflation. As a result, the maximum amount employees are responsible for continues to rise, creating new financial pressures and influencing the overall value of employer-sponsored health plans.
2025 and Beyond: What’s Changing?
Starting in 2025, the federal ACA out-of-pocket maximum (OOPM) for group health plans is $9,200 for self-only and $18,400 for family plans. The annual OOPM requirement covers most non-grandfathered health plans, both fully insured and self-funded.
These limits apply to most ACA-compliant individual and group health plans, excluding grandfathered, retiree-only, and certain Transitional Relief plans. In 2026, OOPM limits are expected to rise to $10,150 for self-only coverage and $20,300 for family coverage.
The Impact on Employers and Employees
Rising out-of-pocket limits have ripple effects across the workplace. For employees, higher healthcare costs can lead to financial stress, reduced satisfaction, and even delayed care. For employers, these shifts may affect benefit plan value, talent retention, and overall workforce well-being. As healthcare expenses climb, both sides experience new challenges. Comprehending these impacts is essential to developing a smarter and more responsive benefits strategy.
Increased Financial Burden for Employees
As out-of-pocket limits rise, employees may struggle to afford necessary healthcare, especially those with ongoing medical needs. This can lead to skipped treatments, lower care adherence, and long-term health consequences.
The financial strain also affects job satisfaction and can push employees to seek employers with more affordable benefits. For organizations, this emphasizes the importance of maintaining accessible, high-value plans, an area where strategic employee benefits consulting can play a key role.
Long-Term Costs for Employers
When employees delay care due to high out-of-pocket costs, minor health issues can escalate into costly chronic conditions. This impacts employee well-being, drives up overall healthcare claims, and increases risk within the employer’s insurance pool.
Over time, these factors can lead to higher premiums and greater financial strain on benefit budgets. To mitigate these risks, employers must carefully evaluate plan design and encourage preventive care whenever possible.
Risk Mitigation Strategies
As out-of-pocket limits continue rising, employers must proactively manage financial risk and employee health outcomes. Mitigation strategies include improving plan design, offering supplemental benefits, and promoting preventive care.
The goal is to balance cost control with thorough coverage that supports worker well-being. While each organization’s approach will vary, staying ahead of regulatory changes and market trends is essential to building sustainable, competitive benefits that meet evolving workforce needs.
Plan Design Adjustments
Adjusting plan design is one of the best ways to manage out-of-pocket costs. Options such as level-funded plans offer greater cost predictability, while co-pay-only models simplify employee expenses by eliminating deductibles.
Employers can also implement enhanced cost-sharing caps to protect employees from excessive medical bills. These strategies help balance risk between the employer and the workforce, making benefits more manageable and appealing to a modern workforce.
Supplemental Coverage Options
Supplemental benefits protect employees from the rising costs associated with higher out-of-pocket limits. Options such as gap insurance, health savings accounts (HSAs), and critical illness plans provide support when unexpected medical expenses arise.
These solutions help reduce the burden on employees by covering costs that standard plans may not fully address, offering peace of mind, and encouraging better engagement with healthcare without fear of overwhelming expenses.
Book a Employee Benefits Consulting Appointment Today
As healthcare costs continue to climb, staying ahead of regulatory changes, such as rising out-of-pocket limits, is essential to your bottom line. Employers must strike a balance between cost control and providing meaningful, competitive benefits. Now is the time to review your current offering and identify opportunities for improvement.
Partner with the experienced employee benefits consultants at New City Insurance to strengthen your strategy and support your workforce.