On July 17, 2024, Governor Josh Shapiro signed House Bill 1993 (“the Bill”) into law. The Bill seeks to further regulate pharmacy benefit managers (“PBMs”) by, among other things, requiring pass-throughs for drug manufacturer rebates, requiring provider freedom of choice, and enacting provider network requirements.
The Bill is effective on November 14, 2024, and could have significant impacts on the prescription drug coverage offered under fully insured group health plans covering residents of the Commonwealth of Pennsylvania.
The Bill amended the existing Pharmacy Audit Integrity and Transparency Act, with the amended statute now called the Pharmacy Benefit Reform Act (“the Act”). The Act applies to fully insured health plans offering prescription drug coverage in the Commonwealth. Importantly, self-insured ERISA plans, non-federal governmental plans, church plans, and Indian tribal government plans are not covered by the Act.
The Bill is intended to regulate contracts between a pharmacy or PBM and a health insurer or health benefit plan. As a whole, the Act regulates a wide variety of PBM operations; however, specific to group health plans, the Bill imposes the following requirements on PBMs operating in the Commonwealth:
In addition, a PBM is prohibited from “steering” a covered individual to a PBM-affiliated retail pharmacy by using financial incentives.
Beginning April 1, 2026, PBMs must file an annual network adequacy report with the Pennsylvania Insurance Department (“the Department”).
Employers sponsoring fully insured group health plans which cover residents of Pennsylvania should review their contracts with their carrier and/or PBM to ensure that they are compliant and amend them as necessary.
This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely
on any information contained herein without seeking the advice of an attorney or tax professional. © My Benefit Advisor. All Rights Reserved. CA Insurance License #0G33244
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