Health Benefits: Design, Cost Sharing, and Statutory Overlays
The Health Benefits domain tests how employer-sponsored medical, dental, vision, pharmacy and consumer-directed plans are designed, priced, administered and regulated in the United States. Questions rarely ask for a definition; they ask you to apply a statutory threshold. Expect arithmetic on cost sharing and contributions first, then a rule that determines whether the design is lawful.
Core design rules
- Cost sharing runs through four levers: deductible, coinsurance or copays, and the out-of-pocket maximum. Non-grandfathered plans must cap in-network OOP spending ($9,450 self-only and $18,900 family in 2024; $9,200 and $18,400 in 2025).
- High-deductible health plans pair with HSAs. For 2025 the minimum deductible is $1,650 self-only and $3,300 family; the HSA limit is $4,300 self-only and $8,550 family, plus a $1,000 catch-up at age 55.
- ACA employer shared responsibility reaches applicable large employers (50 or more full-time equivalents). Coverage must be offered to 95% of full-time employees and their children to age 26, be affordable (9.02% of household income in 2025), and provide minimum value (60% actuarial).
Statutory overlays
- COBRA applies to employers with 20 or more employees in the prior year: 18 months for termination or hours reduction, 29 months for disability, and 36 months for death, divorce or Medicare entitlement.
- HIPAA portability limits preexisting-condition exclusions to 12 months, offset by creditable coverage.
- Medicare Secondary Payer makes the group plan primary for working aged employees where the employer has 20 or more employees.
- Transparency rules require machine-readable files, gag-clause attestation, and prescription drug data reporting.
Worked example
An employer with 120 FTEs offers single coverage priced at $650 per month. Annual employee cost is $7,800. For an employee with $86,000 household income, 9.02% is $7,757. Because $7,800 exceeds that threshold, coverage is not affordable for that employee. If she enrolls in a marketplace plan and receives a premium tax credit, the employer owes the 4980H(b) penalty for each month - roughly $363, since the 2025 annual amount is $4,350 and the penalty is applied monthly.
Traps that cost marks
Miscounting part-time employees in the COBRA 20-employee test; confusing the out-of-pocket maximum with the deductible; forgetting that Medicare enrollment ends HSA eligibility; and treating the 4980H(a) penalty ($2,900 per full-time employee in 2025, after subtracting 30) as if it applied only to employees denied coverage.