On January 29, 2026, the Centers for Medicare and Medicaid Services (CMS) issued its annual update on Affordable Care Act (ACA) out-of-pocket maximum limits in the HHS Notice of Benefit and Payment Parameters. The announcement establishes the indexed out-of-pocket maximum limits that apply to non-grandfathered group health plans beginning on or after January 1, 2027. Group health plan sponsors should evaluate these updated limits when finalizing plan designs for 2027, specifically regarding whether to increase out-of-pocket maximums or leave them unchanged.

Key 2027 ACA limits

Summarized below are the principal amounts that affect group health plan sponsors. Figures are taken directly from the CMS guidance.

• Maximum annual limitation on in-network cost sharing (“out-of-pocket maximum”):
• Individual coverage: $12,000 (currently $10,600 for 2026)
• Family coverage: $24,000 (currently $21,200 for 2026)

Action items for group health plan sponsors

Plan design considerations

• Evaluate the updated limits for 2027 and determine whether to increase the in-network out-of-pocket maximum up to $12,000 for individual coverage and $24,000 for family coverage or leave your plan’s limits unchanged.
• If your plan has an embedded out-of-pocket maximum structure, confirm compliance with limits at each coverage level. Additionally, the total medical and prescription drug maximums must be at or below the limits, whether they are combined or separate.
• Await guidance on high-deductible health plan (HDHP) limits, which will be announced later in 2026.

Communications & compliance documentation

• If a change to out-of-pocket maximum limits will be implemented:
• Update summary plan descriptions (SPDs), summary of material modifications (SMM), and summary of benefits and coverage (SBC) templates; open-enrollment materials; and any electronic enrollment tools to reflect the chosen 2027 limits.
• Plan sponsors should ensure that third-party administrators (TPAs), pharmacy benefit managers (PBMs), and network partners have implemented the new limits in their systems by the start of the 2027 plan year.

We’re here to help

Milliman combines deep actuarial expertise with the latest regulatory intelligence to:

• Benchmark plan designs against peer data and ACA thresholds
• Model 2027 benefits strategies that balance affordability, competitiveness, and budget constraints
• Develop compliance-ready participant communications

This Benefits Alert is for informational purposes only and should not be construed as legal or tax advice. Please consult professional counsel before taking any action based on this material.