May 20, 2024
Drug Discount Cards – Manufacturers’ Financial Assistance
The Department of Health and Human Services (HHS) issued regulations providing that the amount of the drug manufacturers' financial assistance toward brand-name drugs with no generic equivalents may, but is not required, to be counted toward the OOP maximum.
The plan could choose to count only the cost less the amount covered by the manufacturer toward the OOP maximum. For example, if the drug costs $400/month, but the individual only has to pay $100 after the manufacturer discount, only $100 would count toward the OOP maximum.
This regulation was ruled invalid by a district court at the end of 2023. HHS has chosen to issue new regulations on this subject rather than appeal that decision. HHS has indicated that they do not intend to take enforcement action against any plans that continue to follow the invalidated regulations, so it is likely that many plans choosing not to count the manufacturer discount towards the OOP maximum will continue to follow that practice unless and until HHS issues new regulations.
Separate guidance from the IRS addresses drug discount cards for purposes of maintaining HSA-eligibility. The guidance in Q&A 9 of Notice 2004-50 (on Page 6) indicates that a discount card for prescription drugs will not cause an individual who is covered by an HDHP to be ineligible for an HSA if the individual is required to pay the costs of the drug (after taking into account the discount) until the minimum HDHP deductible is satisfied. So, using the same example as above, if the individual is required to pay $100 without any further plan cost-sharing until the minimum HDHP deductible is satisfied, the discount card will not interfere with HSA-eligibility.
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