Industry Update: Copay Accumulators
Recently, several states have passed legislation that prohibits the use of copay accumulator adjustment programs (CAAP), or accumulator adjustment programs. These programs seek to reverse the impact of manufacturer cost sharing assistance for prescription drugs (primarily specialty drugs) by not counting the manufacturer assistance amount towards a patient’s deductible and out-of-pocket (OOP) maximum obligations. Copay accumulator programs in effect extend the amount of time it takes for a patient to reach his/her deductible and OOP limit, thereby reducing the plan sponsor’s coverage until such cost-sharing is met. The annual cost impact to the payer with such programs (self-funded plan, insurer) varies depending on the plan size and mix of medications eligible for copay assistance.
As of July 2021, Arizona, Arkansas, Connecticut, Georgia, Illinois, Kentucky, Louisiana, Oklahoma, Tennessee, Virginia, West Virginia, and Puerto Rico have enacted legislation prohibiting copay accumulator programs. Similar legislation is currently pending in several other states. These regulations generally apply to fully-insured plans as well as self-funded plans that are NOT subject to ERISA. Effective dates for compliance with these new laws varies, ranging from July 1, 2021 (Tennessee), to January 1, 2022.
Pharmacy Benefit Managers (PBMs) and the plan sponsors may manage copay accumulator programs in a few different ways, depending on the complexity of their business model:
- Sunset for everyone: ALL clients, in ALL states
- Sunset only for those currently impacted by the legislation: Fully insured clients and self-funded non-ERISA clients, either in applicable states or for all states
- Self-funded clients who are subject to ERISA: Leave programs in place until they are instructed to remove it (by client or by law)
Proposed Next Steps and Additional Copay Accumulator Considerations:
- Clients with a CAAP in place should engage with their PBM and/or their legal counsel to determine if their plan is impacted by copay accumulator legislation, if they have not already.
- If a group is impacted, determine their approach for managing implementation of the legislation. At minimum, clients should ask their PBM for an impact analysis including estimated increase in plan cost and associated member impact. This will be a positive impact for members, and clients can work with their PBM on communication plans, if any are determined to be needed.
- PBMs may be inclined to use this legislation as an opportunity to promote additional programs such as copay maximizers. Since drugs that are included in these programs are considered “non-essential” and therefore outside of the defined benefit plan, they do not apply to accumulators and OOP maximum obligations. Therefore, it is assumed that these laws do not apply to maximizer programs. Plan sponsors can ask about the potential benefits and savings of copay maximizer programs, if not already in place.
Your Truveris Client Success team can assist with evaluation of these options and additional questions, should they arise. Please contact us at email@example.com.
- Overview of CMS Policy Regarding Copay Accumulators. Johnson & Johnson Health Care Systems Inc. October 2020. Accessed June 30th, 2021. [Link]
- Legiscan Database Accessed June 30th, 2021.
- Arizona HB 166 [Link]
- Arkansas HB 569 [Link]
- Connecticut SB 003 [Link]
- Georgia HB946 [Link]
- Illinois HB0465 [Link]
- Kentucky SB45 [Link]
- Louisiana SB94 [Link]
- Oklahoma HB2678 [Link]
- Tennessee HB0619 [Link]
- Virginia HB2515 [Link]
- West Virginia HB2770 [Link]