SENATE BUDGET AND APPROPRIATIONS COMMITTEE
STATEMENT TO
SENATE COMMITTEE SUBSTITUTE FOR
SENATE, No. 1865
STATE OF NEW JERSEY
DATED: DECEMBER 5, 2019
The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 1865 SCS.
This bill requires certain health insurers, under certain policies or contracts that provide coverage for prescription drugs, to place limitations on covered persons’ cost sharing for prescription drugs.
The bill’s provisions apply to the following insurers and programs that provide coverage for prescription drugs under a policy or contract: health, hospital and medical service corporations; commercial individual and group health insurers; health maintenance organizations; health benefits plans issued pursuant to the New Jersey Individual Health Coverage and Small Employer Health Benefits Programs; the State Health Benefits Program (SHBP) and the School Employees’ Health Benefits Program (SEHBP).
Unless the plan or contract is a catastrophic plan under the federal Affordable Care Act, the bill requires insurers that offer plans in the individual and small employer markets to ensure that at least 25 percent of all plans, or at least one plan if the insurer offers less than four plans, offered by the insurer in each rating area and in each of the bronze, silver, gold, and platinum levels of coverage, shall conform with the following:
· a contract that provides a silver, gold, or platinum level of coverage shall limit a covered person’s cost-sharing financial responsibility, including any copayment or coinsurance, for prescription drugs, including specialty drugs, to no more than $150 per month for each prescription drug for up to a 30-day supply of any single drug; and
· a contract that provides a bronze level of coverage shall ensure that any required covered person’s cost-sharing, including any copayment or coinsurance, does not exceed $250 per month for each prescription drug for up to a 30-day supply of any single drug.
In the case of high-deductible plans, these cost sharing limits apply at any point in the benefit design, including before and after any applicable deductible is reached. For prescription drug benefits offered in conjunction with a high-deductible health plan, the plan shall not provide prescription drug benefits until the expenditures applicable to the deductible under the plan have met the amount of the minimum annual deductibles in effect for self-only and family coverage under section 223(c)(2)(A)(i) of the federal Internal Revenue Code (26 U.S.C. 223(c)(2)(A)(i)) for self-only and family coverage, respectively. Once the foregoing expenditure amount has been met under the plan, coverage for prescription drug benefits shall begin, and the limit on out-of-pocket expenditures for prescription drug benefits shall be as specified in the bill.
In the case of a carrier that offers a large employer group health insurance policy, the carrier is required to offer at least two plans in the large group market.
In the case of the SHBP and the SEHBP, the respective commissions for these programs shall ensure that every contract that provides benefits for expenses incurred in the purchase of prescription drugs, which is purchased by the commission shall:
· limit a covered person’s cost-sharing, including any copayment or coinsurance, for prescription drugs, including specialty drugs, to no more than $200 per month for each prescription drug for up to a 30-day supply of any single drug, and the limits shall apply at any point in the benefit design, including before and after any applicable deductible is reached; and
· for prescription drug benefits offered in conjunction with a high-deductible health plan, not provide prescription drug benefits until the expenditures applicable to the deductible under the plan have met the amount of the minimum annual deductibles in effect for self-only and family coverage under section 223(c)(2)(A)(i) of the federal Internal Revenue Code (26 U.S.C. 223(c)(2)(A)(i)) for self-only and family coverage, respectively. Once the foregoing expenditure amount has been met under the plan, coverage for prescription drug benefits shall begin, and the limit on out-of-pocket expenditures for prescription drug benefits shall be as specified in the bill.
Finally, the bill provides for various effective dates for the bill, depending on the type of plan offered. The bill provides:
· for large employer plans, the bill shall take effect immediately and apply to plans issued or renewed on or after January 1 of the calendar year that begins 180 days after the date of enactment;
· for individual and small employer plans, the bill shall take effect immediately and apply to new plans or renewals issued on or after January 1 of the calendar year that begins 270 days after the date of enactment; and
· for contracts purchased by the SHBP and the SEHBP, the bill shall take effect on the 90th day after the date of enactment and shall apply to contracts purchased on or after that date.
As reported by the committee, this bill is identical to Assembly Bill No. 2431, as also reported by the committee.
FISCAL IMPACT:
The Office of Legislative Services estimates that this bill will have an indeterminate fiscal impact on State and local employer costs, including from provisions that limit a member’s cost-sharing for up to a 30-day supply for each prescription drug prescribed. The limits will apply at any point in the benefit design, including before and after any applicable deductible is reached, except for high deductible plans.
Brand name prescription drugs with generic equivalents could increase prescription drug costs to the State and local employers if those prescription drug costs exceed the limits specified in the bill. In 2018, copays for brand name prescription drugs with generic equivalents were changed in some health insurance plans from specific dollar amounts to requiring the member to pay the generic copay amount as well as the difference in cost between a generic prescription drug and the brand name drug with a generic equivalent.