Compliance News | August 27, 2019
On August 26, 2019, the Departments of Labor, Treasury and Health and Human Services (HHS) issued a new answer to a Frequently Asked Question (FAQ) in response to many questions they had received about a regulation issued by HHS this past April.
The Regulation that Caused Confusion
In that regulation, the Notice of Benefit and Payment Parameters for 2020, HHS addressed, for the first time, whether the value of coupons received from drug manufacturers (or other forms of direct financial assistance to patients from manufacturers) may (or must) count toward the out-of-pocket (OOP) maximum required under the Affordable Care Act for nongrandfathered health plans. For plan years beginning in 2020, the annual OOP maximum is $8,150 for self-only coverage and $16,300 for other than self-only coverage.
The New Guidance
The Departments stated in the new guidance that a group health plan may exclude the value of drug manufacturers’ coupons from the annual maximum on cost-sharing for nongrandfathered health plans, including in circumstances in which there is no medically appropriate generic equivalent available.
Additional Guidance Planned
In the new guidance, the Departments acknowledge the confusion previously generated by HHS in the 2020 Notice and stated that HHS, in consultation with the other Departments, will address this issue in the Notice of Benefit and Payment Parameters that will be issued for 2021.
Implications for Plan Sponsors
In the meantime, the Departments will not initiate an enforcement action if a plan sponsor (or insurer) excludes the value of the coupon from the OOP limit, including in situations where there is no medically appropriate generic available. Plan sponsors should consult with their professional advisers as to the implications of the ruling on their prescription drug program.
As always, plan sponsors should rely on legal counsel for authoritative advice on federal laws and regulations and their application to specific plans.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.
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