EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
Italics indicate opposite chamber/conference committee amendments.
*sb0773*
SENATE BILL 773
J5 (5lr1848)
ENROLLED BILL
— Finance/Health and Government Operations —
Introduced by Senator Hershey
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at _________________ _______ o’clock, ________M.
______________________________________________
President.
CHAPTER ______
AN ACT concerning 1
Health Benefit Plans – Calculation of Cost Sharing Cost–Sharing Contribution – 2
Requirements 3
FOR the purpose of requiring certain insurers, nonprofit health service plans, and health 4
maintenance organizations to include certain discounts, financial assistance 5
payments, product vouchers, and other out–of–pocket expenses made by or on behalf 6
of an insured or enrollee when calculating certain cost–sharing contributions for 7
certain prescription drugs; requiring certain persons that provide certain discounts, 8
financial assistance payments, product vouchers, or other out–of–pocket expenses to 9
notify an insured or enrollee of certain information and to provide a certain statement 10
to the insured or enrollee; prohibiting certain insurers, nonprofit health service plans, 11
and health maintenance organizations from setting, altering, implementing, or 12
conditioning the terms of certain coverage based on the availability or amount of 13
financial or product assistance available for a prescription drug; providing that a 14
violation of a certain provision of this Act is considered a violation of the Consumer 15 2 SENATE BILL 773
Protection Act; administrators, carriers, and pharmacy benefits managers to include 1
certain cost sharing amounts paid by or on behalf of an enrollee or a beneficiary when 2
calculating the enrollee’s or beneficiary’s contribution to a cost sharing requirement 3
for certain health care services; requiring administrators, carriers, and pharmacy 4
benefits managers to include certain cost sharing amounts for providing that the 5
calculation requirement does not apply to enrollees in certain high–deductible health 6
plans after an enrollee or a beneficiary satisfies a certain requirement; prohibiting 7
administrators, carriers, and pharmacy benefits managers from directly or indirectly 8
setting, altering, implementing, or conditioning the terms of certain coverage based 9
on certain information; requiring third parties that pay certain financial assistance 10
to provide certain notification to an enrollee and prohibiting the third parties from 11
conditioning the assistance on the enrollee taking certain actions; and generally 12
relating to the calculation of cost sharing requirements. 13
BY adding to 14
Article – Insurance 15
Section 15–118.1 and 15–1611.3 16
Annotated Code of Maryland 17
(2017 Replacement Volume and 2024 Supplement) 18
Preamble 19
WHEREAS, Cost sharing assistance is indispensable in helping many patients with 20
rare, serious, and chronic diseases afford out–of–pocket costs for their essential and often 21
life–saving medications; and 22
WHEREAS, Patients need cost sharing assistance because of the high out–of–pocket 23
costs for their prescription medications; and 24
WHEREAS, When patients face unexpected charges during their health benefit plan 25
year, they are less likely to adhere to their medication regimen; and 26
WHEREAS, Lack of patient adherence to needed medications leads to potential 27
negative health consequences such as unnecessary emergency room visits, doctors’ visits, 28
surgeries, and other interventions; and 29
WHEREAS, Patients are able to use cost sharing assistance only after they have met 30
requirements for coverage for their medication, including the medication’s inclusion on the 31
patient’s formulary and utilization management protocols, such as prior authorization and 32
step therapy; and 33
WHEREAS, Health insurers and pharmacy benefits managers have implemented 34
programs, such as accumulator adjustment programs, to restrict cost sharing assistance 35
from counting toward a patient’s deductible or annual out–of–pocket limit; and 36
WHEREAS, Because of accumulator adjustment programs, patients are required to 37
continue to make payments even after they have reached their annual out–of–pocket limit, 38 SENATE BILL 773 3
forcing them to pay their full deductible and annual out–of–pocket limit twice and denying 1
them the benefit from these programs while increasing the financial burden they bear to 2
access their life–saving medication; and 3
WHEREAS, Patients often are not aware of the inclusion of accumulator adjustment 4
programs in their health plan contracts and tend to learn about these types of programs 5
when they attempt to obtain their medication after their cost sharing assistance has run 6
out, whether at the pharmacy, at the infusion center, or at home through the mail; and 7
WHEREAS, Accumulator adjustment programs allow health insurers and pharmacy 8
benefits managers to “double dip” by accepting funds from both the cost sharing assistance 9
program and the patient, beyond the original deductible amount and the annual 10
out–of–pocket limit; and 11
WHEREAS, It is a matter of public interest to require health insurers and pharmacy 12
benefits managers to count any amount paid by the patient or on behalf of the patient by 13
another person toward the patient’s annual out–of–pocket limit and any cost sharing 14
requirement, such as deductibles; now, therefore, 15
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 16
That the Laws of Maryland read as follows: 17
Article – Insurance 18
15–118.1. 19
(A) (1) THIS SECTION APPLIES TO: 20
(I) INSURERS AND NONPROF IT HEALTH SERVICE PL ANS THAT 21
PROVIDE HOSPITAL , MEDICAL, OR SURGICAL BENEFITS TO INDIVIDUALS OR GR OUPS 22
ON AN EXPENSE –INCURRED BASIS UNDER HEALTH INSURANCE POL ICIES OR 23
CONTRACTS THAT ARE I SSUED OR DELIVERED I N THE STATE; AND 24
(II) HEALTH MAINTENANCE O RGANIZATIONS THAT PR OVIDE 25
HOSPITAL, MEDICAL, OR SURGICAL BENEFITS TO INDIVIDUALS OR GR OUPS UNDER 26
CONTRACTS THAT ARE I SSUED OR DELIVERED I N THE STATE. 27
(2) AN INSURER, A NONPROFIT HEALTH S ERVICE PLAN, OR A HEALTH 28
MAINTENANCE ORGANIZA TION THAT PROVIDES C OVERAGE FOR PRESCRIP TION 29
DRUGS THROUGH A PHAR MACY BENEFITS MANAGE R IS SUBJECT TO THE 30
REQUIREMENTS OF THIS SECTION. 31
(B) (1) SUBJECT TO PARAGRAPH (2) OF THIS S UBSECTION, WHEN 32
CALCULATING AN INSUR ED’S OR ENROLLEE’S CONTRIBUTION TO TH E INSURED’S OR 33
ENROLLEE’S COINSURANCE , COPAYMENT , DEDUCTIBLE, OR OUT–OF–POCKET 34 4 SENATE BILL 773
MAXIMUM UNDER THE IN SURED’S OR ENROLLEE ’S HEALTH BENEFIT PLA N, AN 1
ENTITY SUBJECT TO TH IS SECTION SHALL I NCLUDE ANY DISCOUNT , FINANCIAL 2
ASSISTANCE PAYMENT , PRODUCT VOUCHER , OR OTHER OUT –OF–POCKET EXPENSE 3
MADE BY OR ON BEHALF OF THE INSURED OR EN ROLLEE FOR A PRESCRI PTION DRUG: 4
(I) THAT IS COVERED UNDE R THE INSURED ’S OR ENROLLEE ’S 5
HEALTH BENEFIT PLAN ; AND 6
(II) 1. THAT DOES NOT HAVE A N AB–RATED GENERIC 7
EQUIVALENT DRUG OR A N INTERCHANGEABLE BI OLOGICAL PRODUCT PRE FERRED 8
UNDER THE HEALTH BEN EFIT PLAN’S FORMULARY ; OR 9
2. A. THAT HAS AN AB–RATED GENERIC EQUIVA LENT 10
DRUG OR AN INTERCHAN GEABLE BIOLOGICAL PR ODUCT PREFERRED UNDER THE 11
HEALTH BENEFIT PLAN ’S FORMULARY ; AND 12
B. FOR WHICH THE INSURE D OR ENROLLEE ORIGIN ALLY 13
OBTAINED COVERAGE TH ROUGH PRIOR AUTHORIZ ATION, A STEP THERAPY 14
PROTOCOL, OR THE EXCEPTION OR APPEAL PROCESS OF TH E ENTITY SUBJECT TO 15
THIS SECTION. 16
(2) IF AN INSURED OR ENRO LLEE IS COVERED UNDE R A 17
HIGH–DEDUCTIBLE HEALTH PL AN, AS DEFINED IN 26 U.S.C. § 223, THIS 18
SUBSECTION DOES NOT APPLY TO THE DEDUCTI BLE REQUIREMENT OF T HE 19
HIGH–DEDUCTIBLE HEALTH PL AN. 20
(C) (1) EXCEPT AS PROVIDED IN PARAGRAPH (3) OF THIS SUBSECTION , A 21
PERSON THAT PROVIDES A DISCOUNT, FINANCIAL ASSISTANCE PAYMENT, PRODUCT 22
VOUCHER, OR OTHER OUT –OF–POCKET EXPENSE MADE BY OR ON BEHALF OF THE 23
INSURED OR ENROLLEE THAT IS USED IN THE CALCULATION OF THE I NSURED’S OR 24
ENROLLEE’S CONTRIBUTION TO THE IN SURED’S OR ENROLLEE ’S COINSURANCE , 25
COPAYMENT , DEDUCTIBLE, OR OUT–OF–POCKET MAXIMUM SHALL , WITHIN 7 DAYS 26
AFTER THE ACCEPTANCE OF THE DISCOUNT , FINANCIAL ASSISTANCE PAYMENT, 27
PRODUCT VOUCHER , OR OTHER OUT–OF–POCKET EXPENSE , NOTIFY THE INSU RED 28
OR ENROLLEE OF : 29
(I) THE MAXIMUM DOLLAR A MOUNT OF THE DISCOUN T, 30
FINANCIAL ASSISTANCE PAYMENT, PRODUCT VOUCHER , OR OTHER OUT –OF–POCKET 31
EXPENSE; AND 32
(II) THE EXPIRATION DATE FOR THE DISCOUNT , FINANCIAL 33
ASSISTANCE PAYMENT , PRODUCT VOUCHER , OR OTHER OUT–OF–POCKET EXPENSE . 34
SENATE BILL 773 5
(2) A VIOLATION OF PARAGRA PH (1) OF THIS SUBSECTION I S A 1
VIOLATION OF THE CONSUMER PROTECTION ACT. 2
(3) THIS SUBSECTION DOES NOT APPLY TO A CHARI TABLE 3
ORGANIZATION THAT PR OVIDES A DISCOUNT , FINANCIAL ASSISTANCE PAYMENT, 4
PRODUCT VOUCHER, OR OTHER OUT –OF–POCKET EXPENSE TO AN INSURED OR 5
ENROLLEE. 6
(D) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , AN ENTITY 7
SUBJECT TO THIS SECT ION MAY NOT DIRECTLY OR INDIRECTLY SET , ALTER, 8
IMPLEMENT, OR CONDITION THE TER MS OF HEALTH BENEFIT PLAN COVERAGE, 9
INCLUDING THE BENEFI T DESIGN, BASED IN WHOLE OR IN PART ON INFORMATION 10
ABOUT THE AVAILABILI TY OR AMOUNT OF FINA NCIAL OR PRODUCT ASS ISTANCE 11
AVAILABLE FOR A PRES CRIPTION DRUG . 12
(2) PARAGRAPH (1) OF THIS SUBSECTION M AY NOT BE CONSTRUED TO 13
PROHIBIT AN ENTITY S UBJECT TO THIS SECTI ON FROM USING REBATE S IN THE 14
DESIGN OF PRESCRIPTI ON DRUG COVERAGE OR BENEFITS. 15
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 16
INDICATED. 17
(2) “ADMINISTRATOR ” HAS THE MEANING STAT ED IN § 8–301 OF THIS 18
ARTICLE. 19
(3) (I) “CARRIER” MEANS AN ENTITY SUBJ ECT TO THE 20
JURISDICTION OF THE COMMISSIONER THAT CON TRACTS OR OFFERS TO CONTRACT 21
TO PROVIDE, DELIVER, ARRANGE FOR , PAY FOR, OR REIMBURSE ANY OF THE COSTS 22
OF HEALTH CARE SERVI CES UNDER A HEALTH B ENEFIT PLAN IN THE STATE: 23
(I) AN INSURER; 24
(II) A NONPROFIT HEALTH S ERVICE PLAN; 25
(III) A HEALTH MAINTENANCE ORGANIZATION ; AND 26
(IV) ANY OTHER PERSON THA T PROVIDES HEALTH BE NEFIT 27
PLANS SUBJECT TO REG ULATION BY THE STATE. 28
(II) “CARRIER” INCLUDES: 29
1. A HEALTH INSURANCE C OMPANY; 30
6 SENATE BILL 773
2. A NONPROFIT HOSPITAL AND MEDICAL SERVICE 1
CORPORATION ; AND 2
3. A MANAGED CARE ORGAN IZATION. 3
(4) “COST SHARING ” MEANS ANY COPAYMENT , COINSURANCE , 4
DEDUCTIBLE, OR OTHER SIMILAR CHA RGE REQUIRED OF AN E NROLLEE FOR A 5
HEALTH CARE SERVICE COVERED BY A HEALTH BENEFIT PLAN , INCLUDING A 6
PRESCRIPTION DRUG , AND PAID BY OR ON BE HALF OF THE ENROLLEE . 7
(5) “ENROLLEE” MEANS AN INDIVIDUAL ENTITLED TO PAYMENT FOR 8
HEALTH CARE SERVICES FROM AN ADMINISTRATO R OR A CARRIER. 9
(6) (I) “HEALTH BENEFIT PLAN ” MEANS A POLICY , A CONTRACT, A 10
CERTIFICATION , OR AN AGREEMENT OFFE RED OR ISSUED BY AN ADMINISTRATOR 11
OR A CARRIER TO PROV IDE, DELIVER, ARRANGE FOR , PAY FOR, OR REIMBURSE ANY 12
OF THE COSTS OF HEAL TH CARE SERVICES . 13
(II) “HEALTH BENEFIT PLAN ” DOES NOT INCLUDE A 14
SELF–INSURED EMPLOYEE PLA N SUBJECT TO THE FED ERAL EMPLOYEE 15
RETIREMENT INCOME ACT OF 1974 (ERISA). 16
(7) “HEALTH CARE SERVICE ” MEANS AN ITEM OR A S ERVICE 17
PROVIDED TO AN INDIV IDUAL FOR THE PURPOS E OF PREVENTING , ALLEVIATING, 18
CURING, OR HEALING HUMAN ILL NESS, INJURY, OR PHYSICAL DISABILI TY. 19
(B) THE ANNUAL LIMITATION ON COST SHARING PROV IDED FOR UNDER 42 20
U.S.C. § 18022(C)(1) SHALL APPLY TO ALL H EALTH CARE SERVICES COVERED 21
UNDER A HEALTH BENEF IT PLAN OFFERED OR I SSUED BY AN ADMINISTRATOR OR A 22
CARRIER IN THE STATE. 23
(C) (1) SUBJECT TO PARAGRAPHS (2) AND (3) PARAGRAPH (2) OF THIS 24
SUBSECTION, WHEN CALCULATING AN ENROLLEE’S CONTRIBUTION TO AN 25
APPLICABLE COST SHAR ING REQUIREMENT , AN ADMINISTRATOR OR A CARRIER 26
SHALL INCLUDE COST SHARING AMOUNTS PAID BY THE ENROLLEE OR O N BEHALF 27
OF THE ENROLLEE BY A NOTHER PERSON . 28
(2) IF THE APPLICATION OF THE THE REQUIREMENT UNDER 29
PARAGRAPH (1) OF THIS SUBSECTION W OULD RESULT IN HEALT H SAVINGS 30
ACCOUNT INELIGIBILITY UNDER § 223 OF THE INTERNAL REVENUE CODE, THE 31
REQUIREMENT SHALL APPLY TO HEALT H SAVINGS ACCOUNT –QUALIFIED 32
HIGH–DEDUCTIBLE HEALTH PLANS WITH RE SPECT TO THE DEDUCTI BLE OF THE 33
PLAN AFTER THE ENROLLEE SATISFIES T HE MINIMUM DEDUCTIBL E UNDER § 223 OF 34
THE INTERNAL REVENUE CODE DOES NOT APPLY WITH RESPECT TO THE 35 SENATE BILL 773 7
DEDUCTIBLE REQUIREME NT OF A HIGH –DEDUCTIBLE HEALTH PL AN IF AN 1
ENROLLEE IS COVERED UNDER A HIGH –DEDUCTIBLE HEALTH PL AN UNDER 26 2
U.S.C. § 223. 3
(3) FOR ITEMS OR SERVICES THAT ARE PREVENTIVE CARE IN 4
ACCORDANCE WITH § 223(C)(2)(C) OF THE INTERNAL REVENUE CODE, THE 5
REQUIREMENTS OF THIS SUBSECTION SHALL APP LY REGARDLESS OF WHE THER THE 6
ENROLLEE SATISFIES T HE MINIMUM DEDUCTIBL E UNDER § 223 OF THE INTERNAL 7
REVENUE CODE. 8
(D) AN ADMINISTRATOR OR A CARRIER MAY NOT DIRE CTLY OR INDIRECTLY 9
SET, ALTER, IMPLEMENT, OR CONDITION THE TER MS OF HEALTH BENEFIT PLAN 10
COVERAGE, INCLUDING THE BENEFI T DESIGN, BASED IN WHOLE OR IN PART ON 11
INFORMATION ABOUT TH E AVAILABILITY OR AM OUNT OF FINANCIAL OR PRODUCT 12
ASSISTANCE AVAILABLE FOR A PRESCRIPTION D RUG OR BIOLOGICAL PR ODUCT. 13
(E) A THIRD PARTY THAT PAY S FINANCIAL ASSISTAN CE IN ANY AMOUNT , OR 14
PORTION OF THE AMOUN T, OF ANY APPLICABLE CO ST–SHARING OR OTHER 15
OUT–OF–POCKET EXPENSE ON BE HALF OF AN ENROLLEE FOR A COVERED 16
PRESCRIPTION DRUG : 17
(1) SHALL NOTIFY THE ENROLLEE WITHIN 7 DAYS OF THE 18
ACCEPTANCE OF THE FI NANCIAL ASSISTANCE O F THE TOTAL AMOUNT O F 19
ASSISTANCE AVAILABLE AND THE DURATION FOR WHICH IT IS AVAILABL E; AND 20
(2) MAY NOT CONDITION TH E ASSISTANCE ON ENRO LLMENT IN A 21
SPECIFIC HEALTH PLAN OR TYPE OF HEALTH PLAN , EXCEPT AS AUTHORIZED UNDER 22
FEDERAL LAW . 23
(E) (F) THE COMMISSIONER MAY ADOP T REGULATIONS TO CAR RY OUT 24
THIS SECTION. 25
15–1611.3. 26
(A) THIS SECTION APPLIES ONLY TO A PHARMACY B ENEFITS MANAGER 27
THAT PROVIDES PHARMA CY BENEFITS MANAGEME NT SERVICES ON BEHALF O F A 28
CARRIER. 29
(B) (1) SUBJECT TO PARAGRAPHS (2) AND (3) PARAGRAPH (2) OF THIS 30
SUBSECTION, WHEN CALCULATING A B ENEFICIARY’S CONTRIBUTION TO AN 31
APPLICABLE COST SHAR ING REQUIREMENT , A PHARMACY BENEFITS MANAGER 32
SHALL INCLUDE COST S HARING AMOUNTS PAID BY THE B ENEFICIARY OR ON BEH ALF 33
OF THE BENEFICIARY B Y ANOTHER PERSON . 34
8 SENATE BILL 773
(2) IF THE APPLICATION OF THE THE REQUIREMENT UNDER 1
PARAGRAPH (1) OF THIS SUBSECTION W OULD RESULT IN HEALT H SAVINGS 2
ACCOUNT INELIGIBILITY UNDER § 223 OF THE INTERNAL REVENUE CODE, THE 3
REQUIREMENT SHALL APPLY TO HEALT H SAVINGS ACCOUNT –QUALIFIED 4
HIGH–DEDUCTIBLE HEALTH PLANS WITH RE SPECT TO THE DEDUCTI BLE OF THE 5
PLAN AFTER THE BENEFICIARY SATISFIE S THE MINIMUM DEDUCT IBLE UNDER § 223 6
OF THE INTERNAL REVENUE CODE DOES NOT APPLY WITH RESPECT T O THE 7
DEDUCTIBLE REQUIREME NT OF A HIGH –DEDUCTIBLE HEALTH PL AN IF AN 8
ENROLLEE IS COVERED UNDER A HIGH –DEDUCTIBLE HEALTH PL AN UNDER 26 9
U.S.C. § 223. 10
(3) FOR ITEMS OR SERVICES THAT ARE PREVENTIVE CARE IN 11
ACCORDANCE WITH § 223(C)(2)(C) OF THE INTERNAL REVENUE CODE, THE 12
REQUIREMENTS OF THIS SUBSECTION SHALL APP LY REGARDLESS OF WHE THER THE 13
BENEFICIARY SATISFIE S THE MINIMUM DEDUCT IBLE UNDER § 223 OF THE 14
INTERNAL REVENUE CODE. 15
(C) A PHARMACY BENEFITS MA NAGER MAY NOT DIRECT LY OR INDIRECTLY 16
SET, ALTER, IMPLEMENT, OR CONDITION THE TER MS OF HEALTH BENEFIT PLAN 17
COVERAGE, INCLUDING THE BENEFI T DESIGN, BASED IN WHOLE OR IN PART ON 18
INFORMATION ABOUT TH E AVAILABILITY OR AM OUNT OF FINANCIAL OR PRODUCT 19
ASSISTANCE AVAILABLE FOR A PRESCRIPTION D RUG OR BIOLOGICAL PRODUCT . 20
(D) A THIRD PARTY THAT PAY S FINANCIAL ASSISTAN CE IN ANY AMOUNT , OR 21
PORTION OF THE AMOUN T, OF ANY APPLICABLE CO ST–SHARING OR OTHER 22
OUT–OF–POCKET EXPENSE ON BE HALF OF AN ENROLLEE FOR A COVERED 23
PRESCRIPTION DRUG : 24
(1) SHALL NOTIFY THE ENROLLEE WITHIN 7 DAYS OF THE 25
ACCEPTANCE OF THE FI NANCIAL ASSISTANCE O F THE TOTAL AMOUNT O F 26
ASSISTANCE AVAILABLE AND THE DURATION FOR WHICH IT IS AVAILABL E; AND 27
(2) MAY NOT CONDITION TH E ASSISTANCE ON ENRO LLMENT IN A 28
SPECIFIC HEALTH PLAN OR TYPE OF HEAL TH PLAN, EXCEPT AS AUTHORIZED UNDER 29
FEDERAL LAW . 30
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to all 31
policies, contracts, and health benefit plans issued, delivered, or renewed in the State on or 32
after January 1, 2026. 33
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 34
January 1, 2026. It shall remain effective for a period of 3 years and 6 months and, at the 35
end of July 1, 2029, this Act, with no further action required by the General Assembly, shall 36
be abrogated and of no further force and effect. 37