SENATE BILL 420
By Reeves
HOUSE BILL 870
By Rudder
HB0870
001736
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AN ACT to amend Tennessee Code Annotated, Title 4;
Title 8; Title 10; Title 53; Title 56; Title 63; Title 68
and Title 71, relative to pharmacy benefits.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 56-7-3201, is amended by adding
the following new subdivisions:
( ) ''Health plan'' means a policy, contract, certification, or agreement offered or
issued by an insurer to provide, deliver, arrange for, pay for, or reimburse any of the
costs of healthcare services;
( ) ''Healthcare service'' means an item or service furnished to an individual for
the purpose of preventing, diagnosing, alleviating, curing, or healing human illness,
injury, or physical disability;
( ) ''Insurer'' means an entity subject to the insurance laws and rules of
insurance in this state or subject to the jurisdiction of the commissioner, that contracts or
offers to contract to provide, deliver, arrange for, pay for, or reimburse the costs of
healthcare services under a health plan in this state;
( ) ''Third-party administrator'' means a third-party administrator as defined in §
56-7-2902.
SECTION 2. Tennessee Code Annotated, Section 56-7-3205, is amended by deleting
the section and substituting:
(a) When calculating an enrollee's contribution to an applicable cost sharing
requirement, an insurer shall include cost sharing amounts paid by the enrollee or on
behalf of the enrollee by another person. If, under federal law, application of this
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requirement would result in health savings account ineligibility under § 223 of the federal
internal revenue code (26 U.S.C. § 223), then this requirement applies for health savings
account-qualified high deductible health plans with respect to the deductible of such a
plan after the enrollee has satisfied the minimum deductible under § 223 of the federal
internal revenue code (26 U.S.C. § 223), except for items or services that are preventive
care pursuant to § 223(c)(2)(C) of the federal internal revenue code (26 U.S.C. §
223(c)(2)(C)), in which case the requirements of this subsection (a) apply regardless of
whether such minimum deductible has been satisfied.
(b) Subsection (a) does not apply to a prescription drug for which there is a
generic alternative, unless the enrollee has obtained access to the brand name
prescription drug through prior authorization, a step therapy protocol, the insurer's
exceptions and appeals process, or as specified in § 53-10-204(a).
(c) The annual limitation on cost sharing provided for under 42 U.S.C. §
18022(c)(1) applies to all healthcare services covered under a health plan offered or
issued by an insurer in this state.
(d) An insurer, pharmacy benefits manager, or third-party administrator shall not
directly or indirectly set, alter, implement, or condition the terms of health plan coverage,
including the benefit design, based in part or entirely on information about the availability
or amount of financial or product assistance available for a prescription drug.
(e) In implementing the requirements of this section, the state shall only regulate
an insurer, pharmacy benefits manager, or third-party administrator to the extent
permissible under applicable law.
SECTION 3. This act takes effect upon becoming a law, the public welfare requiring it,
and applies only to health plans entered into, amended, extended, or renewed on or after
January 1, 2026.