On May 14, 2020, the Department of Health and Human Services (HHS) issued a final rule stating that group health plans, including employer-sponsored health plans, are not required to count the value of drug manufacturer coupons toward participant deductibles and out-of-pocket maximums (the “Final Rule”).  The Final Rule, published in HHS’s Notice of Benefit and Payment Parameters for 2021, allows group health plans to exclude the value of drug manufacturer coupons from participant annual cost-sharing amounts even where no medically appropriate generic drug is available.

Employer-sponsored health plans may establish accumulator programs in order to obtain the benefits of drug manufacturer coupons and to exclude the value of such coupons from cost-sharing on the basis that only amounts actually paid by participants should be counted toward cost-sharing limits.  The efficiency of accumulator programs looked to be in jeopardy when, in its Notice of Benefit and Payment Parameters for 2020 (the “2020 Notice”) released on April 25, 2019, HHS significantly limited accumulator programs by allowing exclusion of drug manufacturer coupons from cost-sharing only in instances in which a brand name drug was used even though a generic drug was available and medically appropriate.

However, before the 2020 Notice became effective on January 1, 2020, HHS (in conjunction with the Internal Revenue Service (IRS) and the Department of Labor) issued a non-enforcement pledge relating to accumulator programs pending further guidance from HHS. The non-enforcement pledge was mostly due to a conflict between the 2020 Notice and long standing IRS guidance, which generally requires that drug manufacturer coupons be excluded from cost-sharing for purposes of health plans compatible with health savings accounts (HSAs). We previously covered this conflict in an earlier blog post, available here.

In the Final Rule, HHS reverses on the limitations published in the 2020 Notice and instead provides that accumulator programs may be used to exclude all drug manufacturer coupons from cost-sharing, regardless of whether a medically-appropriate generic equivalent is available.  Notably, the Final Rule permits exclusion but does not require it, giving health plans the flexibility to determine whether to exclude or include these coupons. Fully-insured benefit plans may also need to comply with state insurance laws regulating cost accumulator programs. The Final Rule goes into effect on July 13, 2020.