Some healthcare plans place a limit on certain or all of the plan’s benefits each year. This means a maximum amount of money the insurance company will pay for your treatments or a maximum number of visits to the doctor.
The cap may be placed on hospitalization, for instance, or on the amount of reimbursement you will receive for prescription drugs.
If you reach this limit, you will have to pay the costs of that service for the rest of the year. The policy year, for which the annual limit applies, begins at the effective date of your policy and restarts at the renewal date in each subsequent year.