Revised language is underlined.

The Oklahoma Insurance Department (Department) is releasing this bulletin with the purpose of providing guidance on the interpretation of HB 1019, amending 36 O.S. § 6060.2 (effective November 1, 2021), as it relates to statutory limits on a policyholder’s out-of-pocket cost for prescription insulin medications.

Section 1(A)(7) of HB 1019 (36 O.S. § 6060.2(A)(7) effective November 1, 2021) states in part:

Any carrier that provides coverage for insulin pursuant to this section shall cap the total amount that a covered person is required to pay for insulin at an amount not to exceed Thirty Dollars ($30.00) per thirty-day supply or Ninety Dollars ($90.00) per ninety-day supply of insulin for each covered insulin prescription, regardless of the amount or type of insulin needed to fill the prescription or prescriptions of the covered person.

It is the position of the Department, based on the statutory text specific to insulin medication cost coverage, that the out-of-pocket monthly cap shall apply regardless of whether the policyholder has met the annual deductible or coinsurance requirements within a given policy. Effective November 1, 2021, the Department understands the dollar caps associated with thirty-day and ninety-day supplies for insulin medication to be applicable to existing health benefit plans as well as upon issue or renewal of a benefit plan.

As stated above, the dollar caps apply to each thirty-day or ninety-day supply of insulin prescription regardless of amount or type. Accordingly, if a policyholder’s thirty-day supply of insulin consists of three different insulin prescriptions, then the covered policyholder shall be required to pay a maximum of $30.00 out-of-pocket for each of the three insulin prescriptions.

The provisions of 36 O.S. § 6060.2(A)(7) are pre-empted by federal laws governing Medicare, located at 42 U.S.C. §§ 1395 et seq., and are not applicable to Medicare Part D plans. However, the provisions of 36 O.S. § 6060.2(A)(7) are not pre-empted by the Employment Retirement Income Security Act (“ERISA”) pursuant to the holding of Rutledge v. Pharmaceutical Care Management Assoc., which finds in part that “ERISA does not pre-empt state rate regulations that merely increase costs or alter incentives for ERISA plans without forcing plans to adopt any particular scheme of substantive coverage.” 141 S.Ct. 474, 480, 208 L.Ed.2d 327 (2020). It is therefore the position of the Department that the insulin cost-sharing caps created by 36 O.S. § 6060.2(A)(7) are applicable to any health plan . . . to the extent permitted by [ERISA],” including, but not limited to, self-funded ERISA plans.

Questions concerning this bulletin should be directed to Mike Rhoads, Deputy Commissioner, at Mike.Rhoads@oid.ok.gov, Kim Bailey, General Counsel, at Kim.Bailey@oid.ok.gov, and/or the Oklahoma Insurance Department located at 400 NE 50^th Street, Oklahoma City, OK 73105-1816.

The Oklahoma Insurance Department (“Department”) is releasing this Bulletin with the purpose of providing information to health insurance issuers regarding HB 2678, a bill enacted during the 2021 Regular Session of the Oklahoma Legislature, amending 36 O.S. § 1250.5 with the effective date of November 1, 2021.

Section 1(18) of HB 2678 (to be codified as 36 O.S. § 1250.5(18)) considers the following to be an unfair claim settlement practice:

As a health insurer that provides pharmacy benefits or a pharmacy benefits manager that administers pharmacy benefits for a health plan, failing to include any amount paid by an enrollee or on behalf of an enrollee by another person when calculating the enrollee’s total contribution to an out-of-pocket maximum, deductible, copayment, coinsurance or other cost sharing arrangement.

Health plan issuers must take notice that when an enrollee’s health plan is a high deductible health plan (“HDHP”) connected to a health savings account (“HSA”), counting third-party payments, such as discounts, vouchers, financial assistance, or other out-of-pocket reduction payments, toward enrollee out-of-pocket expenses will make that enrollee’s contribution ineligible toward their HSA pursuant to 26 U.S.C. § 223.

Beginning November 1, 2021, all existing health plans under an HDHP and associated HSA arrangement or upon issue or renewal of such a health plan must be administrated in compliance with HB 2678 (to be codified as 36 O.S. § 1250.5(18)). The Department is actively engaging with the Legislature to seek clarification regarding the conflict between the state statute and federal requirements governing HSA eligibility. In the interim, the administration of pharmacy claims must be in compliance with state law, which will require the issuer to combine all payments made toward a prescription when calculating the enrollee’s total contribution. The issuer must also comply with federal law, which prohibits any contribution from an HSA from being combined with any third-party payment with exceptions for contributions made toward preventative care and cost-sharing occurring after the deductible is reached.

If payments made from an HSA are deemed ineligible, the tax benefits provided by the HSA could be lost for that payment and potentially create a serious tax event for the enrollee. The Department strongly encourages health plan issuers to promptly contact members enrolled in an HDHP with an associated HSA and clearly communicate the effects of applying funds from third parties and their HSA when making payments for prescriptions.

Questions concerning this bulletin should be directed to Kim Bailey, General Counsel, at kim.bailey@oid.ok.gov or Molly Clinkscales, Assistant General Counsel at molly.clinkscales@oid.ok.gov.