The out-of-pocket maximum, in plain terms.
The out-of-pocket maximum is the most an employee pays in a plan year for covered, in-network care. Once it is reached, the plan pays covered costs for the rest of the year.
What the ceiling includes and what it leaves out.
It is the number that decides how bad a bad year can get, which is why it deserves a place beside the premium.
It is a ceiling, not a target
Most employees never reach it. It matters because it is the worst case for covered in-network care, and the worst case is what a plan is for.
Premiums do not count toward it
What comes out of each paycheck for coverage is separate from the out-of-pocket maximum. A low-premium plan can carry a high maximum.
Out-of-network and uncovered care generally do not count
Care outside the network and services the plan does not cover typically fall outside the ceiling. Check how your plan treats each.
Federal law limits it for most group plans
Most non-grandfathered group health plans must keep the in-network out-of-pocket maximum under an annual federal limit, adjusted each year.
Where the ceiling stops the bill.
Illustrative plan: 1,500 dollar deductible, 20 percent coinsurance, 4,000 dollar out-of-pocket maximum. The flat line is the ceiling at work: after a 14,000 dollar bill the employee pays nothing more for covered in-network care that year.
Illustrative figures to show the method. Real plans vary.
The bill
A 6,000 dollar allowed amount for a covered hospital service.
The deductible
The employee pays the first 1,500 dollars.
The coinsurance
20 percent of the remaining 4,500 dollars is 900 dollars.
The result
The employee pays 2,400 dollars and the plan pays 3,600 dollars.
What the rules say.
The figures and requirements below come from the federal sources cited at the end of this section. General information, not legal advice.
The 2026 federal limit
For 2026, the annual limit on cost sharing for non-grandfathered group health plans is 10,600 dollars for self-only coverage and 21,200 dollars for other-than-self-only coverage. HHS revised these from the 10,150 and 20,300 dollars first published for 2026.
It applies to each person on a family plan
Even on family coverage, no single person can be asked to pay more than the self-only limit toward covered in-network essential health benefits.
A separate ceiling for HSA-qualified plans
A high-deductible plan paired with a Health Savings Account must keep out-of-pocket costs at or below 8,500 dollars for self-only and 17,000 dollars for family coverage in 2026.
Plans can set theirs lower
The federal figure is the most any plan may ask. Many plans set the maximum well below it, so the plan summary is what tells you your number.
Sources: 42 U.S.C. 18022
We price the worst case alongside the likely case.
For every option we show premium plus the out-of-pocket maximum, the most an employee could pay in a year, so the choice is made with the downside in view.
Related pages.
What is the difference between a deductible and an out-of-pocket maximum?
The deductible is what an employee pays for covered care before the plan starts sharing the cost.
What counts toward the out-of-pocket maximum?
Generally the deductible, copays and coinsurance for covered, in-network care count.
The Deductible, Explained in Plain Terms
A deductible is the amount an employee pays for covered care before the plan starts sharing the cost.
Avoiding Group Health Insurance Plan Confusion
The full guide to helping employees understand their group health plan.
Questions that come up next.
Short answers to the questions employees ask after this one. Each links to its own page.
Is a high-deductible plan always the cheaper choice?
No. A high-deductible plan usually has a lower premium, but it can cost more in a year with significant care. The right choice depends on how much care the employee expects to use and whether they can cover the deductible if they need to.
Do copays count toward the deductible?
It depends on the plan. On some plans copays count toward the deductible and on others they do not. Copays generally do count toward the out-of-pocket maximum for covered in-network care, but confirm in your plan documents.
Is coinsurance the same as a copay?
No. A copay is a fixed dollar amount for a specific service. Coinsurance is a percentage of the cost of a covered service that the employee pays after the deductible is met.
Ready? Send us your renewal, or talk it through with someone first. No cost, no obligation.
General information about group health plan terms, not legal or tax advice. Plan-specific questions belong with the plan documents and the carrier.
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