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HHS Addresses Drug Manufacturer Coupons on Out-of-Pocket Limits

Client Alert

On May 7, 2020, the US Department of Health and Human Services (“HHS”) announced their Notice of Benefit Parameters for 2021 in which HHS addressed the application of prescription drug manufacturer copay coupons towards a patient’s out-of-pocket limit. Under this guidance, HHS will permit, but not require, plans and insurers to count direct support offered to enrollees by drug manufacturers (i.e., coupons) for specific prescription drugs toward the annual limits on cost-sharing, regardless of whether a generic equivalent is available.

In the Notice of Benefit Parameters for 2020, HHS finalized a proposal that for plan years beginning on or after January 1, 2020, amounts paid toward cost sharing using any form of direct support offered by drug manufacturers to enrollees to reduce or eliminate immediate out-of-pocket costs for specific prescription brand drugs that have an available and medically appropriate generic equivalent are not required to be counted toward the annual limitation on cost sharing.[1] HHS received stakeholder feedback indicating confusion on whether plans and issuers are required to count the value of all forms of direct support provided by drug manufacturers, including drug manufacturers' coupons, toward the annual limitation on cost sharing, other than in circumstances in which there is a medically appropriate generic equivalent available, particularly with regard to large group market and self-insured group health plans.

In an effort to alleviate this confusion, HHS is revising the rule to state, “…amounts of direct support offered by drug manufacturers to enrollees for specific prescription drugs towards reducing the cost sharing incurred by an enrollee using any form are not required to be counted toward the annual limitation on cost sharing.”[2] Health insurance issuers and group health plans now have the flexibility to determine whether drug manufacturer direct support to enrollees for specific prescription drugs counts toward the annual limitation on cost sharing.

HHS considered a proposal to interpret the definition of “cost sharing” to exclude expenditures covered by drug manufacturer coupons, but after review of proposal rule feedback and comments, is refusing to adopt this interpretation in this 2021 final rule.

Finally, HHS expects issuers and group health plans to be transparent with enrollees regarding potential out-of-pocket liability and whether the value of direct drug manufacturer support accrues to the annual limitation on cost sharing. HHS is encouraging issuers and group health plans to prominently include this information on websites and in brochures, plan summary documents, and other collateral material that consumers may use to select, plan, and understand their benefits, but this is not a requirement.

Please contact a BMD healthcare attorney if you have any questions regarding this final rule, the application of drug manufacturer coupons on cost sharing, or other general healthcare questions. 


Protecting Your Image in the Age of AI-Generated “Deepfakes”

The rapid evolution of artificial intelligence (AI) has transformed how we create and consume digital content, but it also poses significant risks. Among the most troubling developments in AI is the proliferation of AI-generated fraudulent content, often called “deepfakes”.

Tariffs, Market Downturn, and Employment Considerations for Employers

As tariffs continue to impact various industries, employers must prepare for the ripple effects these economic pressures can have on workforce management. The economic impact can dramatically impact companies’ bottom lines, and companies look to improve finances and save for the future and many will choose to reduce employee count/wages.

Corporate Transparency Act Overhauled: U.S. Entities No Longer Required to Report

The Department of Treasury has issued an interim final rule significantly altering the Corporate Transparency Act (CTA). As of March 21, 2025, all U.S.-created entities and their beneficial owners are exempt from reporting requirements. Only non-U.S. entities registered to do business in the U.S. must still report, but they are not required to disclose U.S. citizen owners. Business owners should stay informed on these changes and consult legal counsel for compliance guidance.

ODM to Implement Medicaid Work Requirements: What Providers and Medicaid Expansion Recipients Need to Know

The Ohio Department of Medicaid (ODM) has submitted a waiver to impose work requirements for Medicaid expansion recipients. If approved, the new eligibility criteria will take effect on January 1, 2026. A federal public comment period is open until April 7, 2025.

Ohio Appellate Court Rules in Favor of Gender-Affirming Care

On March 18, 2025, the 10th District Court of Appeals in Franklin County ruled that Ohio’s House Bill (HB) 68, which restricts puberty blockers and hormone therapy for minors seeking gender-affirming care, violates the Health Care Freedom Amendment and is therefore unenforceable. The court found that the law unlawfully interferes with parental rights and medical decision-making. The case, Moe v. Yost, has been remanded, and Ohio Attorney General Dave Yost intends to appeal.