As a parent, I encourage my kids to resist the melodic siren call of procrastination. I share historical examples of how procrastination led to undesirable and often catastrophic events. It’s an easy argument to make. It’s especially easy because my kids haven’t been exposed to the shifting sands of employee benefit regulations.
Given the growing complexity of our benefits landscape, it’s no wonder the regulators often extend various deadlines or reverse course, leaving the procrastinator appearing prophetic. For example, back in July we discussed the Department of Health and Human Services final regulations surrounding prescription drug coupons and employee cost-sharing in health plans (prescription drug cost accumulator programs).
In short, these regulations meant that if an employer had taken measures to ensure that prescription drug coupons cannot indirectly reduce plan accumulators — a deductible or out-of-pocket maximum — the employer would need to adjust the program before its 2020 plan year begins so that if a generic drug is not available, the value of the coupon can reduce plan accumulators.
Since then, we’ve consulted with our employer clients impacted by these final regulations to course correct before their 2020 plan years begin. However, just before Labor Day, the federal government essentially reversed course on these final regulations via this set of FAQs:
In short, the regulators
· Acknowledged the confusion surrounding possible conflict between these final regulations and existing IRS HDHP regulations
· Indicated that they anticipate issuing updated guidance for a 2021 applicability date
· In the meantime, would not enforce its current guidance: “Until the 2021 NBPP is issued and effective, the Departments will not initiate an enforcement action if an issuer of group or individual health insurance coverage or a group health plan excludes the value of drug manufacturers’ coupons from the annual limitation on cost sharing, including in circumstances in which there is no medically appropriate generic equivalent available.”
What this means is that if you’ve procrastinated addressing the original final regulations, you’re in luck. My above article is now completely obsolete.
Importantly, the above FAQ may have been the first time the federal government has said out loud that allowing a coupon to reduce a deductible could disqualify a high-deductible health plan. Thus, this topic’s risk management considerations are now completely turned on its head. Suddenly, having a prescription drug cost accumulator program (coupon mitigation program) is no longer an immediate risk. The new risk is not having the program. Seriously.
Given the complexity of these topics, it’s recommended that you consult with your benefits consultant, attorney, accountant and other advisers to map out next steps.
To begin these discussions, below is a sample decision tree to consider:
1. Do you maintain, via your pharmacy benefit manager (PBM), a prescription drug cost accumulator program?
2. If yes to #1, consider keeping the program.
3. If no to #1, does your PBM offer a prescription drug cost accumulator program?
4. If no to #3, do your advisors recommend moving to a PBM that offers a cost accumulator program?
5. If yes to #3, do you sponsor a high-deductible health plan?
6. If yes to #5, seriously consider adopting the cost accumulator program.
7. If no to #5, evaluate adopting the program.
Complicating this already confusing topic, note that while many PBMs offers programs that effectively mitigate the impact of specialty coupons, no PBM that we know of can effectively eliminate all prescription drug coupon impact.