Kentucky Statutes 304.17A-164 – Limitations on insurers and pharmacy benefit managers regarding cost-sharing for prescription drugs — Exceptions
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(1) As used in this section:
(a) “Cost sharing” means the cost to an insured under a health plan according to any coverage limit, copayment, coinsurance, deductible, or other out-of- pocket expense requirements imposed by the plan, which may be subject to annual limitations on cost sharing, including those imposed under 42 U.S.C. secs. 18022(c) and 300gg-6(b), in order for the insured to receive a specific health care service covered by the plan;
(b) “Generic alternative” means a drug that is designated to be therapeutically equivalent by the United States Food and Drug Administration’s Approved Drug Products with Therapeutic Equivalence Evaluations, except that a drug shall not be considered a generic alternative until the drug is nationally available;
(c) “Health plan”:
1. Means a policy, contract, certificate, or agreement offered or issued by an insurer to provide, deliver, arrange for, pay for, or reimburse any of the cost of health care services; and
2. Includes a health benefit plan;
(d) “Insured” means any individual who is enrolled in a health plan and on whose behalf the insurer is obligated to pay for or provide health care services;
(e) “Insurer” includes:
1. An insurer offering a health plan providing coverage for pharmacy benefits; or
2. Any other administrator of pharmacy benefits under a health plan;
(f) “Person” means a natural person, corporation, mutual company, unincorporated association, partnership, joint venture, limited liability company, trust, estate, foundation, nonprofit corporation, unincorporated organization, government, or governmental subdivision or agency;
(g) “Pharmacy” includes:
1. A pharmacy, as defined in KRS Chapter 315;
2. A pharmacist, as defined in KRS Chapter 315; and
3. Any employee of a pharmacy or pharmacist; and
(h) “Pharmacy benefit manager” has the same meaning as in KRS § 304.17A-161. (2) To the extent permitted under federal law and except as provided in subsection (4)
of this section, an insurer issuing or renewing a health plan on or after January 1,
2022, or a pharmacy benefit manager, shall not:
(a) Require an insured purchasing a prescription drug to pay a cost-sharing amount greater than the amount the insured would pay for the drug if he or she were to purchase the drug without coverage;
(b) Exclude any cost-sharing amounts paid by an insured or on behalf of an insured by another person for a prescription drug, including any amount paid
under paragraph (a) of this subsection, when calculating an insured’s contribution to any applicable cost-sharing requirement. The requirements of this paragraph shall not apply:
1. In the case of a prescription drug for which there is a generic alternative, unless the insured has obtained access to the brand prescription drug through prior authorization, a step therapy protocol, or the insurer’s exceptions and appeals process; or
2. To any fully insured health benefit plan or self-insured plan provided to any employee under KRS § 18A.225;
(c) Prohibit a pharmacy from discussing any information under subsection (3) of this section; or
(d) Impose a penalty on a pharmacy for complying with this section.
(3) A pharmacist shall have the right to provide an insured information regarding the applicable limitations on his or her cost sharing pursuant to this section for a prescription drug.
(4) If the application of any requirement of subsection (2)(b) of this section would be the sole cause of a health plan’s failure to qualify as a Health Savings Account- qualified High Deductible Health Plan under 26 U.S.C. § 223, as amended, then the requirement shall not apply to that health plan until the minimum deductible under 26 U.S.C. § 223, as amended, is satisfied.
Effective: June 29, 2023
History: Amended 2023 Ky. Acts ch. 130, sec. 1, effective June 29, 2023. — Amended
2021 Ky. Acts ch. 134, sec. 1, effective January 1, 2022. — Created 2018 Ky. Acts ch. 144, sec. 1, effective January 1, 2019.
Legislative Research Commission Note (6/29/2023). 2023 Ky. Acts ch. 130, sec. 3, provides that in implementing the requirements of this statute, the state shall only regulate a pharmacy benefit manager or an insurer to the extent permissible under applicable law.
(a) “Cost sharing” means the cost to an insured under a health plan according to any coverage limit, copayment, coinsurance, deductible, or other out-of- pocket expense requirements imposed by the plan, which may be subject to annual limitations on cost sharing, including those imposed under 42 U.S.C. secs. 18022(c) and 300gg-6(b), in order for the insured to receive a specific health care service covered by the plan;
Terms Used In Kentucky Statutes 304.17A-164
- Association: means an entity, other than an employer-organized association, that has been organized and is maintained in good faith for purposes other than that of obtaining insurance for its members and that has a constitution and bylaws. See Kentucky Statutes 304.17A-005
- Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: may extend and be applied to any corporation, company, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Federal: refers to the United States. See Kentucky Statutes 446.010
- Health care service: means health care procedures, treatments, or services
rendered by a provider within the scope of practice for which the provider is licensed. See Kentucky Statutes 304.17A-005 - Insurer: means any insurance company. See Kentucky Statutes 304.17A-005
- Self-insured plan: means a group health insurance plan in which the sponsoring organization assumes the financial risk of paying for covered services provided to its enrollees. See Kentucky Statutes 304.17A-005
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Statute: A law passed by a legislature.
(b) “Generic alternative” means a drug that is designated to be therapeutically equivalent by the United States Food and Drug Administration’s Approved Drug Products with Therapeutic Equivalence Evaluations, except that a drug shall not be considered a generic alternative until the drug is nationally available;
(c) “Health plan”:
1. Means a policy, contract, certificate, or agreement offered or issued by an insurer to provide, deliver, arrange for, pay for, or reimburse any of the cost of health care services; and
2. Includes a health benefit plan;
(d) “Insured” means any individual who is enrolled in a health plan and on whose behalf the insurer is obligated to pay for or provide health care services;
(e) “Insurer” includes:
1. An insurer offering a health plan providing coverage for pharmacy benefits; or
2. Any other administrator of pharmacy benefits under a health plan;
(f) “Person” means a natural person, corporation, mutual company, unincorporated association, partnership, joint venture, limited liability company, trust, estate, foundation, nonprofit corporation, unincorporated organization, government, or governmental subdivision or agency;
(g) “Pharmacy” includes:
1. A pharmacy, as defined in KRS Chapter 315;
2. A pharmacist, as defined in KRS Chapter 315; and
3. Any employee of a pharmacy or pharmacist; and
(h) “Pharmacy benefit manager” has the same meaning as in KRS § 304.17A-161. (2) To the extent permitted under federal law and except as provided in subsection (4)
of this section, an insurer issuing or renewing a health plan on or after January 1,
2022, or a pharmacy benefit manager, shall not:
(a) Require an insured purchasing a prescription drug to pay a cost-sharing amount greater than the amount the insured would pay for the drug if he or she were to purchase the drug without coverage;
(b) Exclude any cost-sharing amounts paid by an insured or on behalf of an insured by another person for a prescription drug, including any amount paid
under paragraph (a) of this subsection, when calculating an insured’s contribution to any applicable cost-sharing requirement. The requirements of this paragraph shall not apply:
1. In the case of a prescription drug for which there is a generic alternative, unless the insured has obtained access to the brand prescription drug through prior authorization, a step therapy protocol, or the insurer’s exceptions and appeals process; or
2. To any fully insured health benefit plan or self-insured plan provided to any employee under KRS § 18A.225;
(c) Prohibit a pharmacy from discussing any information under subsection (3) of this section; or
(d) Impose a penalty on a pharmacy for complying with this section.
(3) A pharmacist shall have the right to provide an insured information regarding the applicable limitations on his or her cost sharing pursuant to this section for a prescription drug.
(4) If the application of any requirement of subsection (2)(b) of this section would be the sole cause of a health plan’s failure to qualify as a Health Savings Account- qualified High Deductible Health Plan under 26 U.S.C. § 223, as amended, then the requirement shall not apply to that health plan until the minimum deductible under 26 U.S.C. § 223, as amended, is satisfied.
Effective: June 29, 2023
History: Amended 2023 Ky. Acts ch. 130, sec. 1, effective June 29, 2023. — Amended
2021 Ky. Acts ch. 134, sec. 1, effective January 1, 2022. — Created 2018 Ky. Acts ch. 144, sec. 1, effective January 1, 2019.
Legislative Research Commission Note (6/29/2023). 2023 Ky. Acts ch. 130, sec. 3, provides that in implementing the requirements of this statute, the state shall only regulate a pharmacy benefit manager or an insurer to the extent permissible under applicable law.