On March 12, 2018, the Vermont Department of Insurance published Bulletin 171, which is a revision to a previous bulletin regarding the out-of-pocket (OOP) maximums for prescription drugs. As background, Vermont law (8 V.S.A. Sec. 4089i, enacted in 2012) established OOP maximums for prescription drugs, and as a benchmark for OOP maximums, the Vermont law relies on IRC Section 223 (relating to qualifying HDHPs and HSA eligibility). Bulletin 171 is intended to provide clarification for insurers, in the form of FAQs, on how the law should apply.
According to the bulletin, the new law applies to all plans, including large and small group plans. One FAQ explains that the new law requires prescription drug OOP maximums be no higher than the federal statutory annual minimum deductible for qualifying HDHPs (as outlined under IRC Section 223). Another FAQ states that the OOP maximums apply to all drug plans administered by the health plan, including by its PBM.
The bulletin clarifies the definition of ‘out-of-pocket expenditure’, explains which expenses count towards the OOP max and the deductible, and that prescription drugs administered in a doctor’s office, hospital or clinic that are not obtained through retail or mail-order are counted toward the OOP maximum.
The FAQs include additional clarifications, such as when prescription drug benefits begin under the HDHP, whether out-of-network prescription drug expenses count towards the OOP maximum, and how the preventive services rules apply.
The bulletin contains no new employer obligations, but employers should be aware of it to better understand their plan designs and assist with employee questions.
Bulletin 171 »