LH BULLETIN NO. 2021-04 (SECOND REVISION)

Revised language is underlined.

The Oklahoma Insurance Department (Department) is releasing this bulletin with the purpose of providing guidance on the interpretation of HB 1019, amending 36 O.S. § 6060.2 (effective November 1, 2021), as it relates to statutory limits on a policyholder’s out-of-pocket cost for prescription insulin medications.

Section 1(A)(7) of HB 1019 (36 O.S. § 6060.2(A)(7) effective November 1, 2021) states in part:

Any carrier that provides coverage for insulin pursuant to this section shall cap the total amount that a covered person is required to pay for insulin at an amount not to exceed Thirty Dollars ($30.00) per thirty-day supply or Ninety Dollars ($90.00) per ninety-day supply of insulin for each covered insulin prescription, regardless of the amount or type of insulin needed to fill the prescription or prescriptions of the covered person.

It is the position of the Department, based on the statutory text specific to insulin medication cost coverage, that the out-of-pocket monthly cap shall apply regardless of whether the policyholder has met the annual deductible or coinsurance requirements within a given policy. Effective November 1, 2021, the Department understands the dollar caps associated with thirty-day and ninety-day supplies for insulin medication to be applicable to existing health benefit plans as well as upon issue or renewal of a benefit plan.

As stated above, the dollar caps apply to each thirty-day or ninety-day supply of insulin prescription regardless of amount or type. Accordingly, if a policyholder’s thirty-day supply of insulin consists of three different insulin prescriptions, then the covered policyholder shall be required to pay a maximum of $30.00 out-of-pocket for each of the three insulin prescriptions.

The provisions of 36 O.S. § 6060.2(A)(7) are pre-empted by federal laws governing Medicare, located at 42 U.S.C. §§ 1395 et seq., and are not applicable to Medicare Part D plans. However, the provisions of 36 O.S. § 6060.2(A)(7) are not pre-empted by the Employment Retirement Income Security Act (“ERISA”) pursuant to the holding of Rutledge v. Pharmaceutical Care Management Assoc., which finds in part that “ERISA does not pre-empt state rate regulations that merely increase costs or alter incentives for ERISA plans without forcing plans to adopt any particular scheme of substantive coverage.” 141 S.Ct. 474, 480, 208 L.Ed.2d 327 (2020). It is therefore the position of the Department that the insulin cost-sharing caps created by 36 O.S. § 6060.2(A)(7) are applicable to any health plan . . . to the extent permitted by [ERISA],” including, but not limited to, self-funded ERISA plans.

Questions concerning this bulletin should be directed to Mike Rhoads, Deputy Commissioner, at Mike.Rhoads@oid.ok.gov, Kim Bailey, General Counsel, at Kim.Bailey@oid.ok.gov, and/or the Oklahoma Insurance Department located at 400 NE 50^th Street, Oklahoma City, OK 73105-1816.