Federal Government Retreats From Finalized Policy; Will Allow Broader Use of Co-Pay Accumulator Programs for 2020 Plan Year

As explained in our prior Update, in April, HHS issued the final Notice of Benefit and Payment Parameters (NBPP) for 2020, which, among other policies, permits health plans and health insurance issuers to exclude the value of drug manufacturers’ co-pay coupons from patients’ annual cost-sharing limits in certain circumstances. More specifically, the policy, effective for plan years beginning on or after January 1, 2020, permits use of accumulator programs for prescription brand drugs with available and medically appropriate generic equivalents. As clarified in preamble guidance, the policy prohibits accumulator programs and requires plans and issuers to include the value of manufacturer co-pay coupons for purposes of a patient’s annual cost-sharing limit if a generic equivalent is not available or is not medically appropriate.

The Departments acknowledged in their August 26 guidance that stakeholders expressed concern that HHS’s accumulator policy may conflict with IRS guidance on HDHPs in circumstances where a generic equivalent is not available or medically appropriate. Under existing IRS guidance, HDHPs are required to disregard drug discounts, including manufacturers’ discounts, in determining whether the minimum deductible for a HDHP has been satisfied. The Departments stated that, without further clarification, HDHP issuers and sponsors may not be able to simultaneously comply with both the IRS requirement and HHS’s accumulator policy when a generic equivalent is not available or medically appropriate.

To address the conflict, the Departments will permit plans and issuers to exclude the value of manufacturers’ coupons from annual cost-sharing limits regardless of whether medically appropriate generic equivalents are available. States will be permitted to adopt a similar enforcement policy. HHS, in consultation with the Departments of Labor and the Treasury, intends to issue new regulations in the forthcoming NBPP for 2021. Until revised rules are issued and effective, however, the Departments will not initiate enforcement actions if issuers or plans exclude the value of coupons from annual cost-sharing limits, including in circumstances where no medically appropriate therapeutic generic equivalent is available.

The guidance, which is not limited to HDHPs, notably expands the scope of HHS’s accumulator policy for the 2020 plan year. In addition to monitoring developments regarding coupons, accumulator programs and patient access in light of this guidance, stakeholders should remain alert to any changes in state enforcement policies and consider opportunities to engage with the administration on revisions to the accumulator policy as part of the NBPP rulemaking for 2021.