A new rule under the health care reform law limiting employees' out-of-pocket expenses will pose significant administrative challenges and could increase employer costs.

The rule would, for the first time, impose a flat dollar limit for all employer group health plans on how much in deductibles, coinsurance and copayments employees can be required to pay annually for health care services, including prescription drugs.

The requirement, issued last week and slated to go into effect in 2014, is included in the latest batch of health care reform law regulations from the U.S. Department of Health and Human Services.

Under those regulations, the maximum annual out-of-pocket limit on health care expenses that can be shifted to employees cannot exceed the maximum out-of-pocket limit allowed that year for high-deductible health care plans linked to health savings accounts.

These new limits on employees' out-of-pocket costs will apply first to nongrandfathered health care plans. Eventually, most grandfathered plans are expected to lose that status because they will no longer meet health care law requirements.

In 2013, the maximum out-of-pocket limit for HSA-linked high deductible plans for an employee with single coverage is $6,250 and $12,500 for family coverage. The Internal Revenue Service is expected to announce the 2014 limits in May.

Currently, the limits many employers set on how much out-of-pocket expenses employees are required to pick up are much lower. According to Aon Hewitt research, the average 2012 out-of-pocket limit on health care expenses employees were required to pay — excluding prescription drugs — was a little more than $2,100 for individual coverage and $4,500 for family coverage.

“There are not many plans now with (out-of-pocket) limits higher” than what the new rule will set, said Rich Stover, a principal with Buck Consultants L.L.C. in Secaucus, N.J.

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The reason is companies realize providing employees an affordable health plan greatly helps them retain their most productive workers and maintain positive staff morale.

Typically, however, group health plan out-of-pocket limits exclude copayments, such as the flat fees plan enrollees pay when they see a medical provider.

“Say you have a $5,000 limit for individual coverage. If there are a lot of copayments,” the maximum out-of-pocket limit will be pierced, requiring employers to pick up costs above that limit, said Michael Thompson, a principal with PricewaterhouseCoopers L.L.P. in New York.

“It is a benefit enhancement that will have a cost. It is not a huge cost,” but it adds up, when combined with other cost increases resulting from changes required under the health care reform law, Mr. Stover said.

Overshadowing the cost increases resulting from the new limit on out-of-pocket expenses, though, are the administrative challenges the new requirement will pose.

Administrative issues “will be a big deal,” said J.D. Piro, a senior vice president at Aon Hewitt in Norwalk, Conn.

One big administrative challenge will be coordinating different health care providers so they are aware of all the health care expenses that employees are picking up. That is because the federal regulation sets an overall limit on out-of-pocket expenses employees can be required to pay, regardless of the type of health care service or expense.

For example, except for a one-year transition period for employers that carve out coverage for things such as prescription drugs, out-of-pocket expenses for all health care services would have to be combined to determine if the out-of-pocket annual limit was reached.

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“You'll have to bring in all these vendors and get them to talk to one another” to revise their administrative systems, Mr. Piro said.

And PwC's Mr. Thompson said there is another real-world problem that involves employees in health care plans that impose copayments on doctor office visits. In that situation, the employee pays the provider at the time of service.

Providers, though, would have no way of knowing whether the employee had hit the health care plan limit on out-of-pocket expenses for that year and, thus, would not be liable for the copayment.

“Coordination is something that is going to be needed,” Mr. Piro said.