For an individual who has exceeded the cost limit, what amount must be included in the total Limit Reduction amount field when reporting Summary Cost Data?
Only the portion of the cost of the specific item or service that exceeds the cost limit, for an individual, should be included in the Limit Reduction field. For example, an early retiree has costs of $89,990 for a plan year. The plan then pays an incurred claim for $200 for that individual. When aggregating the Summary Cost Data, the sponsor would, for this individual, include $200 in Costs Paid by Plan and $190 in Limit Reduction. (This example assumes the plan has not received any price concessions.) Note that 45 C.F.R. 149.320(c) states that sponsors must not submit claims for health benefits for an early retiree to the extent the sponsor has already submitted claims for the early retiree that total more than the applicable cost limit for the applicable plan year. This principle applies to Summary Cost Data and Detailed Claims Data.
