Employer plans will still be able to exclude the value of drug manufacturer coupons from annual out-of-pocket maximums, even when no generic equivalent is available, under new guidance from the Department of Labor, Department of Health and Human Services (HHS), and Department of Treasury. These exclusions, or copay accumulators, are built into many employer plans.

The guidance was issued on August 26, 2019, in the form of a Frequently Asked Question (FAQ) about the implementation of the Affordable Care Act. The agencies indicate that a rule that had been set to take effect on January 1, 2020, could potentially have put high-deductible health plans in conflict with earlier guidance from the Internal Revenue Service (IRS) on health savings accounts (HSAs). The agencies plan to address drug coupons in another guidance that will be issued for 2021.

The initial rule appeared in the HHS Notice of Benefit and Payment Parameters for 2020, which was published on April 25, 2019. That rule permitted health plans to exclude drug manufacturer coupons from annual out-of-pocket maximums when a generic equivalent is available. The rule itself did not state the inverse—that plans must apply the coupon values to out-of-pocket maximums when there is no generic equivalent—though the preamble indicated that this was the HHS’s position.

Employers and pharmacy benefit managers had been discussing what the rule actually meant and how to comply with it for several months. The federal government has been seeking means to lower health costs for years, including most recently a plan to facilitate importation of lower-cost foreign prescription drugs. In its initial rule, HHS tried to strike a balance between encouraging patients to choose lower-cost generic drugs and honoring the design of health plan cost-sharing limitations.

The initial drug coupon rule could be read to conflict with 2004 IRS guidance related to HSAs. In that guidance, the IRS indicated that drug discount cards would not affect an employee’s HSA eligibility as long as the plan did not apply the value of the discount toward the individual’s annual deductible. By contrast, the rule for 2020 would have required plans to apply the value of a manufacturer coupon to an annual out-of-pocket maximum in cases where no generic equivalent was available.

In light of the ambiguity, the FAQ announces that the departments will revisit drug manufacturer assistance in guidance form in 2021 and that the application of drug coupons towards cost sharing limitations will not be federally enforced in 2020.