Drug Coupons Explained
We encourage and help anyone we can to obtain a coupon for their prescriptions.. We know, however, that there are emerging issues with them.
Drug manufacturers have some amazing but expensive medications. They have created coupon programs that help the consumer pay for the prescriptions up until that consumer reaches their insurance company deductible (most coupon programs require the consumer has insurance).
For the consumer, that appears to be fine. That is the good.
Once the member meets their deductible (even though they may not have actually paid that full amount, due to the coupon), the insurance company is hit with the cost. For the remainder of the year the carrier is paying the full cost on refills for that prescription. That is the bad (at least for the insurance company).
The battle between the manufacturer and insurance company is now heating up. The manufacturer wants to let the consumer off the hook for the cost (so they will use their product) but wants to get to the carrier reimbursement portion. Some insurance carriers have concluded that since the consumer did not actually pay for the prescription, deductible credit should only be given for what the consumer actually paid. We assume more carriers will follow suit.
We are beginning to see the consumer caught in the middle. The manufacturers do not want to keep filling the prescriptions for free. If they see that the member was not given deductible credit from the insurance carrier, the member is then billed for the full cost. The consumer assumes the coupon will work and does not find out it was rejected until after the prescription has been filled. The consumer then gets billed. And, that is the ugly.
We at BBG still see the coupon option to be worth researching and using. However, we are urging our clients’ employees and dependents to research this and reach out to us for help. We know a lot about these options and are learning how get ahead of being blindsided.
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- Mike Barrett
- September 28, 2018
- confusion, cost, costs, coverage, drugs, employees, health plans, healthcare, high deductible, insurance, prescription, trends
- 0 Comments
On March 5, 2018 the IRS announced in it’s IRS HSA Bulletin that the 2018 contribution limit for Health Savings Accounts (HSA) linked to family coverage is now $6,850 from the previously announced $6,900. For more information regarding these changes please see the attached IRS HSA Bulletin or linked SHRM article.
This is an example of one Ohio company adjusting how they administer coupons people use at the pharmacy. The program helps make sure members’ out-of-pocket cost for prescription drugs are properly applied to deductibles and maximum out-of-pocket amounts.
The benefit of the coupon is easy to grasp. Someone on an expensive brand medication can obtain it at low or no cost.
The problem can be that the carrier processes it as a paid claim and the member never pays what the plan requires. There are reasons both employers and carriers want real out of pocket to be met by the member.
The carriers now are adjusting and working on ensuring that the member is not given credit or given a reimbursement for something they never paid for personally. Members can use the coupons, but the carrier will credit only what the member actually paid.
This seems like a reasonable solution. It will likely become a normal way coupons are processed.
The ACA imposes a maximum dollar limit on employee contributions to health flexible spending accounts (FSAs). Although the ACA set this limit at $2,500, the limit is indexed for cost-of-living adjustments each year. On Oct. 19, 2017, the IRS announced that, for taxable years beginning in 2018, the dollar limit on employees’ salary reduction contributions to a health FSA will increase to $2,650.
Employers may continue to impose their own dollar limits on employee contributions to health FSAs, as long as the employer’s limit does not exceed the ACA’s maximum limit in effect for the plan year. For example, an employer may decide to continue limiting employee health FSA contributions for the 2018 plan year to $2,500.
Go here for more information.
Health FSA Limit Will Increase for 2018 10-19-17