Compliance News | February 10, 2020

Rx Manufacturer Coupons & the ACA’s Out-of-Pocket Limit

The Department of Health and Human Services (HHS) recently issued new information for non-grandfathered group health plans. HHS proposes clarifying that plan sponsors may decide whether and when the value of coupons or other forms of direct assistance from drug manufacturers count toward the Affordable Care Act (ACA)-required out-of-pocket (OOP) limit.

This clarification is part of the proposed Notice of Benefit and Payment Parameters for 2021, which was published in the February 6, 2020 Federal Register. The comment deadline is March 2.

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In last year’s version of this annual notice, HHS first addressed whether direct financial assistance from drug manufacturers, including coupons, may (or must) count toward the ACA’s OOP limit for non-grandfathered plans. HHS received many questions about that guidance.

In response, HHS and the other federal departments implementing the ACA issued a new answer to a frequently asked question (FAQ) on August 26, 2019, which stated the departments would not enforce the rule. (We discussed that FAQ in our August 27, 2019 web post.) In light of this enforcement safe harbor, plan sponsors were permitted to continue to decide when to count coupons toward the ACA-required OOP limit.

The proposed approach

The proposed notice would give plan sponsors (and health insurers) complete flexibility in deciding whether and when the value of manufacturer coupons (or other forms of direct support) would count toward the ACA-required OOP limit The exception would be if an applicable state law requires a different approach.

The final notice should be issued in early spring.

The immediate implications

With the enforcement safe harbor announced last August still in effect, plan sponsors can continue to count or exclude these coupons from the ACA’s OOP limit, whichever approach is provided for in the governing plan documents.

Proposed 2021 out-of-pocket maximums announced

Plan sponsors should also note that HHS proposes the following OOP limits for 2021: $8,550 for single coverage and $17,100 for other coverage tiers. The different (and lower) limits that will apply to high-deductible health plans paired with Health Savings Accounts have not been announced yet by the IRS.

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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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