Senate Study Bill 3004 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON HUMAN RESOURCES BILL BY CHAIRPERSON SEGEBART) A BILL FOR An Act relating to a no-deductible copayment structure for an 1 entire prescription drug benefit, including all formulary 2 tiers, in a specified percentage of individual, group, and 3 small group insurance contracts, policies, and plans offered 4 in the state by health carriers. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5077XC (7) 87 ko/rj

S.F. _____ Section 1. NEW SECTION . 514C.5A Prescription drug benefits 1 —— no-deductible copayment structure. 2 1. Definitions. For the purpose of this section: 3 a. “Health care service” means the same as defined in 4 section 514J.102. 5 b. “No-deductible copayment” means a copayment for a covered 6 health care service that is not subject to a deductible. 7 2. No-deductible copayment structure. 8 a. A health carrier that offers individual, group, or small 9 group contracts, policies, or plans in this state that provide 10 for third-party payment or prepayment of prescription drugs 11 shall, in at least twenty-five percent of the individual, 12 twenty-five percent of the group, and twenty-five percent of 13 the small group contracts, policies, or plans offered, do all 14 of the following: 15 (1) Apply a no-deductible copayment structure to the 16 entire prescription drug benefit, including all tiers of the 17 formulary, for which payment or prepayment is covered under the 18 contract, policy, or plan. 19 (2) Implement a no-deductible copayment structure 20 in all formulary tiers that is reasonably graduated and 21 proportionately related in all formulary tier levels. 22 b. A health carrier that offers only one contract, policy, 23 or plan of individual coverage in this state issued pursuant 24 to chapter 514, 514A, or 514B, or small group health coverage 25 issued pursuant to chapter 513B, shall do all of the following: 26 (1) Apply a no-deductible copayment structure to the 27 entire prescription drug benefit, including all tiers of the 28 formulary, for which payment or prepayment is covered under the 29 contract, policy, or plan. 30 (2) Implement a no-deductible copayment structure 31 in all formulary tiers that is reasonably graduated and 32 proportionately related in all formulary tier levels. 33 3. Rules. The commissioner shall adopt rules pursuant to 34 chapter 17A to administer this section. 35 -1- LSB 5077XC (7) 87 ko/rj 1/ 3

S.F. _____ 4. Applicability. 1 a. This section shall apply to the following classes of 2 third-party payment provider contracts, policies, or plans 3 delivered, issued for delivery, continued, or renewed in this 4 state on or after January 1, 2019: 5 (1) Individual or group accident and sickness insurance 6 providing coverage on an expense-incurred basis. 7 (2) An individual or group hospital or medical service 8 contract issued pursuant to chapter 509, 514, or 514A. 9 (3) An individual or group health maintenance organization 10 contract regulated under chapter 514B. 11 (4) A plan established for public employees pursuant to 12 chapter 509A. 13 b. This section shall not apply to accident-only, 14 specified disease, short-term hospital or medical, hospital 15 confinement indemnity, credit, dental, vision, Medicare 16 supplement, long-term care, basic hospital and medical-surgical 17 expense coverage as defined by the commissioner, disability 18 income insurance coverage, coverage issued as a supplement 19 to liability insurance, workers’ compensation or similar 20 insurance, or automobile medical payment insurance. 21 EXPLANATION 22 The inclusion of this explanation does not constitute agreement with 23 the explanation’s substance by the members of the general assembly. 24 This bill relates to a no-deductible copayment structure for 25 the entire prescription drug benefit, including all formulary 26 tiers, in a specified percentage of individual, group, and 27 small group contracts, policies, and plans offered in the state 28 by a health carrier. 29 The bill defines “no-deductible copayment” as a copayment 30 for a covered health care service not subject to a deductible. 31 The bill requires a health carrier that offers individual, 32 group, or small group contracts, policies, or plans that 33 include prescription drug benefits to apply a no-deductible 34 copayment structure to the entire prescription drug benefit, 35 -2- LSB 5077XC (7) 87 ko/rj 2/ 3

S.F. _____ including all tiers of the formulary. The no-deductible 1 copayment structure must be applied in at least 25 percent of 2 the individual, 25 percent of the group, and 25 percent of the 3 small group contracts, policies, or plans offered by the health 4 carrier. 5 If a health carrier offers only one contract, policy, or plan 6 of individual coverage issued per Code chapter 514, 514A, or 7 514B, or small group health coverage issued per Code chapter 8 513B, all contracts, policies, or plans offered by the health 9 carrier must apply a no-deductible copayment structure to the 10 entire prescription drug benefit, including all tiers of the 11 formulary. 12 The no-deductible copayment structure must be reasonably 13 graduated and proportionately related in all formulary tier 14 levels. 15 The bill is applicable to third-party payment provider 16 contracts, policies, or plans delivered, issued for delivery, 17 continued, or renewed in this state on or after January 1, 18 2019, including individual or group accident and sickness 19 insurance providing coverage on an expense-incurred basis, an 20 individual or group hospital or medical service contract issued 21 pursuant to Code chapter 509, 514, or 514A, an individual or 22 group health maintenance organization contract regulated under 23 Code chapter 514B, or a plan established for public employees 24 pursuant to Code chapter 509A. 25 The bill does not apply to accident-only, specified disease, 26 short-term hospital or medical, hospital confinement indemnity, 27 credit, dental, vision, Medicare supplement, long-term care, 28 basic hospital and medical-surgical expense, disability 29 income insurance coverage, coverage issued as a supplement 30 to liability insurance, workers’ compensation or similar 31 insurance, or automobile medical payment insurance. 32 -3- LSB 5077XC (7) 87 ko/rj 3/ 3