Summary

The United States Department of Health and Human Services (HHS) has filed court pleadings stating that it does not intend to initiate enforcement actions against plans that maintain copay accumulator programs.

The Upshot

• A recent district court opinion invalidated HHS rulemaking that formed the basis of many common copay accumulator designs.
• In pleadings filed with the court, HHS has indicated that it will not initiate enforcement actions against plans that continue to follow the invalidated regulations.
• HHS intends to issue further rulemaking as a result of the court’s decision, so plan sponsors should keep a close eye on agency guidance relating to copay accumulator programs.

The Bottom Line

The non-enforcement policy provides welcome—albeit temporary—relief for employers weighing their options following the court’s decision.

In court papers filed on November 27, 2023, the Department of Health & Human Services (HHS) announced important relief for employers whose prescription drug plans include copay accumulator programs.

Background

As we previously reported, the Court recently invalidated key guidance that governed the design of copay accumulator programs. The decision left many plan sponsors wondering whether they needed to make immediate changes to their prescription drug designs -- and, potentially, their health savings account programs.

Non-Enforcement Policy

In a court pleading, the HHS told the District Court for the District of Columbia that it will not take enforcement action against plans that continue to administer copay accumulator plans:

“HHS intends to address, through rulemaking, the issues left open by the Court’s opinion, including whether financial assistance provided to patients by drug manufacturers qualifies as ‘cost sharing’ under the Affordable Care Act. Pending the issuance of a new final rule, HHS does not intend to take any enforcement action against issuers or plans based on their treatment of such manufacturer assistance. [HHS does] not understand this Court’s order to require HHS to take enforcement action.”

While agencies typically issue relief in the form of FAQs or similar sub-regulatory guidance, it seems reasonable for plan sponsors to rely on these representations to the Court until HHS releases further guidance or rulemaking.

Although the filing provides only HHS’ views on the subject, plan sponsors with copay accumulator programs will likely welcome the news as an indication that those programs do not need to be abandoned, pending further agency guidance on the subject.

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