Health Plan Deductibles and OOPMs – Key Concepts for Employers (May)

Deductibles and out-of-pocket maximums (OOPMs) are important cost­sharing parameters for health plans. A deductible is the amount an individual must pay in covered health care expenses each year before the health plan starts paying. An OOPM is the overall limit on an individual’s annual out-of­pocket spending on covered health care expenses. Once an individual reaches their OOPM, their health plan pays 100% of covered expenses for the rest of the year. Generally, health plans with higher cost-sharing limits have lower monthly premiums than health plans with lower deductibles and OOPMs.