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Copay accumulators, copay maximizers, and alternative funding programs (AFPs) are the three main categories of patient assistance programs, and the legal and regulatory landscape shapes their use. Under the Affordable Care Act (ACA), non-grandfathered individual and small group health insurance plans must cover Essential Health Benefits, or “EHB”, including prescription drugs. Many plans currently interpret requirements under a so-called EHB “loophole” in the ACA to designate certain drugs, generally specialty drugs, as non-essential health benefits (non-EHBs), and therefore not subject them to coverage requirements under the ACA.

This interpretation is foundational to the use of copay accumulators, copay maximizers, and AFPs. The ACA does not specifically address whether third-party cost sharing should be counted toward the annual out of pocket (OOP) limit. This classification affects how third-party copay assistance is handled in calculating patient out-of-pocket costs: when drugs are classified as non-EHB, health plans do not apply costs toward the OOP limit.

When copay accumulators are used, plans accept copay assistance but they do not apply it toward a patient’s OOP maximum. When copay maximizers are used, plans set higher copays for drugs classified as non-EHBs based on manufacturer assistance, offer third-party maximizers and do not count third-party payments toward patient cost-sharing. Finally, for AFPs, plans classify certain drugs as non-EHBs and can then carve them out of the standard benefit structure, excluding them from coverage. Enrollees must then either join the AFP or pay full medication costs out of pocket.

At the federal level, there has been a back-and-forth in regulations governing copay accumulators. The Notice of Benefit and Payment Parameters, or NBPP, is an annual rule issued by the Centers for Medicare & Medicaid Services that governs key provisions of the ACA. The NBPP applies to both the Federally Facilitated Marketplace (FFM) and State-Based Marketplaces. The rules generally apply for individual and small group market plans, particularly those offered through the ACA Marketplaces, not large group plans or self-insured employer plans.

The 2020 NBPP final rule required insurers to count copay assistance toward patients’ annual deductibles and OOP maximums unless assistance was provided for brand-name drugs with an available generic equivalent. The 2021 NBPP final rule reversed the 2020 rule, permitting health plans to implement copay accumulators more broadly. Plans could exclude copay assistance from counting toward cost-sharing limits, regardless of generic availability. The HIV and Hepatitis Policy Institute and others sued the Department of Health and Human Services over this regulation. In September 2023, the U.S. District Court for the District of Columbia ruled on this case and struck down the 2021 NBPP final rule, vacating the provisions permitting plans not to count copay assistance toward cost-sharing. This reverted regulations to the 2020 NBPP standards.

Stakeholders had been looking to the 2026 NBPP proposed rule as the next opportunity for CMS to propose rulemaking on copay accumulators. This rule was released on October 4, but CMS did not propose any policies on this issue. Instead, CMS announced an intention of rulemaking with HHS, the Department of Labor, and the Treasury and provided no timeline for the rulemaking.

Importantly, the 2020 NBPP rule is now in effect, under which copay assistance must count toward cost-sharing for drugs without generic equivalents. However, in the process of the litigation HHS indicated it will not enforce the reinstated 2020 NBPP rule and will not take action before future rulemaking on the issue.

CMS has also addressed and noted plans to further address scenarios where health plans use the approach of designating specialty drugs as non-EHBs to support copay maximizers, stating that it will consider copay maximizer programs in any future policy making on drug manufacturer assistance. HHS regulations define EHB based on State-specific EHB-benchmark plans. ACA regulations at 45 CFR 156.122 include a standard under which a state health plan provides EHBs for prescription drugs only if it “covers at least the greater of (1) one drug in every USP category and class; or (2) the same number of prescription drugs in each category and class as the benchmark plan.” This language has been interpreted both as a floor and as a ceiling for plan coverage.

Certain companies that participate in non-EHB programs have interpreted the ACA coverage requirements as a ceiling rather than a floor. Under this interpretation, companies argue that they only need to cover the minimum number of drugs from the state plan, and all drugs beyond that minimum are non-EHB.

HHS has confirmed the interpretation that this is a floor for coverage for small and individual group plans, meaning if a plan covers drugs beyond the number of drugs covered by the EHB-benchmark, those drugs are considered EHB and are subject to EHB protections and must count toward cost sharing. It has not provided its interpretation for large group and employer-sponsored plans; however, a joint FAQ issued by HHS, DOL, and DOT, stated that they intend to propose rulemaking that would align the standards for these plans with those applicable to individual and small group market plans. The upcoming rule from HHS, DOL, and Treasury on this issue will, therefore, be significant for use of copay accumulators and maximizers. It is possible that AFPs could be addressed as well.