Drug Formulary Limitations

Recently enacted SB 1021 prohibits a drug formulary maintained by a health insurer or health care service plan from containing more than four tiers effective Jan. 1, 2019. Additionally, the new law requires health insurance policies and contracts to cover combination antiviral drug treatments that are medically necessary for the prevention of AIDS/HIV, effective Jan. 1, 2019 until Jan. 1, 2023. Existing law already requires such coverage for the treatment of AIDS/HIV.

Finally, the bill also extends the following existing laws until Jan. 1, 2024. They previously would have expired Jan. 1, 2020:

  • The drug formulary for outpatient prescriptions of a health insurer or health care service plan cannot discourage the enrollment of or reduce benefits for individuals with particular health conditions.
  • The copayment, coinsurance or other form of cost sharing for a covered outpatient prescription drug can generally not exceed $250 for a 30-day supply with limited exceptions. This provision does not apply to a qualified HDHP until the deductible has been met.

Plan sponsors should consider these requirements and work with their insurer to make any necessary changes to their drug formulary.

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