By Tulay Turan, JD
Requiring coupon values to count toward limitations could have rendered high deductible health plans unable to comply with differing rules.
The Departments of Labor (DOL), HHS, and the Treasury (the Departments) have issued a Frequently Asked Question (FAQ) addressing how drug manufacturers’ coupons count toward the Affordable Care Act’s annual limitation on cost sharing. The FAQ provides that, until additional guidance is issued, the Departments will not initiate an enforcement action if an issuer of group or individual health insurance coverage or a group health plan excludes the value of drug manufacturers’ coupons from the annual limitation on cost sharing, including in circumstances in which there is no medically appropriate generic equivalent available (CMS FAQs, August 26, 2019).
Conflict in the rules. The final HHS Notice of Benefit and Payment Parameters for 2020 (2020 NBPP Final Rule) stated that under ACA Sec. 1302(c)(1), for plan years beginning on or after January 1, 2020, plans and issuers are permitted to exclude the value of drug manufacturers’ coupons from counting toward the annual limitation on cost sharing when a medically appropriate generic equivalent is available. The FAQ indicates that it has come to the Departments’ attention that this provision can be read to imply that, in any other circumstances, group health plans and issuers are required to count such coupon amounts toward the annual limitation on cost sharing.
Such a requirement could create a conflict with certain rules for high deductible health plans (HDHPs) that are intended to allow eligible individuals to establish a health savings account (HSA). Specifically, Q&A-9 of IRS Notice 2004-50 states that the provision of drug discounts will not disqualify an individual from being an eligible individual if the individual is responsible for paying the costs of any drugs (taking into account the discount) until the deductible of the HDHP is satisfied. Thus, Q&A-9 of Notice 2004-50, requires an HDHP to disregard drug discounts and other manufacturers’ and providers’ discounts in determining if the minimum deductible for an HDHP has been satisfied and only allows amounts actually paid by the individual to be taken into account for that purpose.
Such a requirement could put the issuer or sponsor of an HDHP in the position of complying with either the requirement under the 2020 NBPP Final Rule for limits on cost sharing in the case of a drug manufacturer coupon for a brand name drug with no available or medically appropriate generic equivalent or the IRS rules for minimum deductibles for HDHPs, but potentially being unable to comply with both rules simultaneously.
Future guidance. The FAQ indicates that the Departments’ interpretation of how drug manufacturers’ coupons apply with respect to the annual limitation on cost sharing is ambiguous. To address this conflict, HHS intends to undertake rulemaking in the forthcoming HHS Notice of Benefit and Payment Parameters for 2021.
Until the 2021 NBPP is issued and effective, the Departments will not initiate an enforcement action if an issuer of group or individual health insurance coverage or a group health plan excludes the value of drug manufacturers’ coupons from the annual limitation on cost sharing, including in circumstances in which there is no medically appropriate generic equivalent available.
States may adopt a similar enforcement policy, and HHS will not consider a state to be failing to substantially enforce the annual limitation on cost sharing in cases where a state does so with respect to health insurance issuers.
MainStory: TopStory CMSLetters AgencyNews CostSharingNews DrugNews InsurerNews
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