ACA Update: IRS Announces 2027 Cost-Sharing Limits | Virginia Benefits Consultants

On January 29, 2026, the U.S. Department of Health and Human Services (HHS) officially released the maximum cost-sharing limits for the 2027 plan year. These figures represent a significant 13.2% increase over the 2026 limits, marking a substantial shift in potential out-of-pocket expenses for plan participants.

2027 Maximum Out-of-Pocket Limits

For 2027, the maximum annual limitation on cost-sharing is:

• Self-Only Coverage: $12,000 (Up from $10,600 in 2026)
• Family Coverage: $24,000 (Up from $21,200 in 2026)

Employers must review their current plan designs to ensure they remain compliant with these updated Affordable Care Act (ACA) mandates.

Understanding the Out-of-Pocket Maximum (OOPM)

The ACA requires most health plans to set an annual cap on total enrollee cost-sharing for Essential Health Benefits (EHBs). This limit is commonly known as the Out-of-Pocket Maximum (OOPM).

Scope of Coverage:

• Applicability: These limits apply to all non-grandfathered health plans, including self-insured, level-funded, and fully insured plans of all sizes.
• Included Costs: Deductibles, copayments, and coinsurance all count toward the limit. Premiums and spending for non-covered services are excluded.
• Essential Health Benefits: Limits apply to the 10 EHB categories, such as emergency services, hospitalization, prescription drugs, and maternity care. Plans are not required to apply the OOPM to non-EHB services.
• Network Status: Plans generally do not have to count out-of-network expenses toward the ACA’s cost-sharing limit.

The “Embedded” Individual Limit

Even within a family plan, the ACA’s self-only cost-sharing limit applies to each individual. This means that if a family plan has a total OOPM higher than the self-only limit ($12,000 for 2027), the plan must include an “embedded” individual OOPM.

Once any single individual in a family reaches the $12,000 threshold, the plan must cover 100% of their qualified expenses for the rest of the year, even if the total family limit has not yet been met.

HSA-Compatible High Deductible Health Plans (HDHPs)

It is important to note that HDHPs compatible with Health Savings Accounts (HSAs) are subject to lower out-of-pocket limits set by the IRS.

While the 2027 HDHP limits have not yet been released, for comparison, the 2026 HDHP limits are capped at $8,500 for self-only and $17,000 for family coverage. Employers with HSA-qualified plans should watch for separate IRS guidance later this year.

Next Steps for Employers:

• Audit 2027 plan designs for compliance with the $12,000/$24,000 thresholds.
• Ensure payroll and benefits systems are updated to handle the embedded individual maximums.
• Consult with your benefits advisor to prepare for the upcoming open enrollment cycle.