LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7299 NOTE PREPARED: Jan 2, 2025
BILL NUMBER: SB 435 BILL AMENDED:
SUBJECT: Prohibition on Copay Accumulator Adjustments.
FIRST AUTHOR: Sen. Hunley BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: This bill has the following provisions:
1) It provides that under certain circumstances, the administrator of a State Employee Health Plan (SEHP)
shall include any amount paid by a covered individual or another person on behalf of the covered individual
for a prescription drug when calculating a covered individual's overall contribution to an out-of-pocket
maximum or cost sharing requirement under the covered individual's SEHP.
2) It provides that under certain circumstances, a pharmacy benefit manager shall include any amount paid
by a covered individual or another person on behalf of the covered individual for a prescription drug when
calculating a covered individual's overall contribution to an out-of-pocket maximum or cost sharing
requirement under the covered individual's health plan.
3) It provides that under certain circumstances, an insurer that issues a policy of accident and sickness
insurance shall include any amount paid by an insured or another person on behalf of the insured for a
prescription drug when calculating an insured's overall contribution to an out-of-pocket maximum or cost
sharing requirement under the insured's policy of accident and sickness insurance.
4) It provides that under certain circumstances, a health maintenance organization shall include any amount
paid by an enrollee or another person on behalf of the enrollee for a prescription drug when calculating an
enrollee's overall contribution to an out-of-pocket maximum or cost sharing requirement under the enrollee's
individual or group contract.
Effective Date: July 1, 2025.
Explanation of State Expenditures: The bill will impact workload for the Indiana Department of Insurance
(DOI) to ensure compliance with the bill’s requirements but should be able to be implemented using existing
staffing and resources. [The DOI is funded through a dedicated agency fund.]
Additional Information: The bills provisions are not anticipated to impact costs under the current State
SB 435 1 Employee Health Plan (SEHP) prescription drug benefit plan. The State Personnel Department (SPD) is the
SEHP plan administrator. Currently, the SEHP prescription drug benefit plan is managed by CVS Caremark
under contact with the SPD. The SEHP is the primary and first payer for any claims, meaning that the full
amount of a prescription payment is applied towards a members’s deductible (and out-of-pocket maximum)
as applicable, regardless of the final amount that was paid by the member for the prescription after applying
any available discounts from a third-party (such as through a manufacturers prescription assistance plan
and/or through the use of a co-pay card).
Explanation of State Revenues: Violations: An unfair or deceptive act or practice in the business of
insurance carries a civil penalty between $25,000 and $50,000 for each act or violation, which is deposited
in the state General Fund.
Insurance Premiums: The bill’s provisions could impact health insurance prescription benefit plans,
pharmacy benefit manager policy practices, and health maintenance organizations’ ability to prevent co-pay
assistance programs and third-party payments from being factored into a covered individuals deducible. If
insurance premium collections in the state increase as a result of limitations on co-payment accumulators,
revenue to the state General Fund from the corporate Adjusted Gross Income Tax and the Insurance Premium
Tax could increase. The Insurance Premium Tax is a 1.3% tax on gross premiums received by insurance
companies. The Insurance Premium Tax generated roughly $266.4 M in revenue during FY 2024. Insurance
Premium Tax revenue is currently distributed into the state General Fund.
Explanation of Local Expenditures: Local entities providing health insurance through a policy of accident
and sickness, or a health maintenance organization may have increased costs if they previously dis-allowed
co-payment assistance or co-pay accumulators when calculating a covered individual's overall contribution
to an out-of-pocket maximum or cost sharing requirement.
Explanation of Local Revenues:
State Agencies Affected: Department of Insurance.
Local Agencies Affected: Local entities providing health care insurance.
Information Sources: Christy Tittle: State Personnel Department; PeopleSoft Financials data, FY 2024;
CVS Caremark Prescription Benefit Plan Certificate:
https://www.in.gov/spd/benefits/files/2024-CVS-Caremark-Plan-Certificate.pdf.
Fiscal Analyst: Allison Leeuw, 317-234-9465.
SB 435 2