Copay accumulator programs: Are the risks worth the savings?
As copay accumulator programs proliferate through employer plans, employer plan liability is growing apace.
A patient advocacy nonprofit is warning employer-sponsored plan administrators that a benefit being marketed to them as a cost-control measure may violate certain state and federal health insurance laws.
The benefit: copay accumulator programs. These programs essentially wipe out certain employee expenses that would otherwise count toward the employee’s deductible and out-of-pocket totals.
Related: Pharmacy benefit managers crack down on copay assistance programs
Employees who receive discount coupons from drug manufacturers for high cost specialty drugs are particularly vulnerable to the negative offset of copay accumulators, says the nonprofit Alliance for the Adoption of Innovations in Medicine, known colloquially as Aimed Alliance.
The group released a study of the adoption and effects of copay accumulator programs, and concluded that as such programs proliferate through employer plans, employer plan liability is growing apace.
“Due to the misleading nature of copay accumulator language, lack of appropriate notice, and in some instances, the singling out of individuals with specific health conditions, these programs can be unfair, deceptive, and discriminatory,” said Stacey Worthy, counsel to Aimed Alliance. “Health insurance plans that include copay accumulators might provide the illusion of cost savings, but, in actuality, they can increase the risk for liability and result in legal implications for the employer without any guaranteed cost-savings.”
The study noted that, with employer plan costs continuing to increase, some insurance brokers have successfully added these programs to their clients’ plans. The study cited a National Business Group on Health survey that found that 17 percent of the large employer respondents have already adopted a copay accumulator program. More than half said they are considering putting such a program in place for 2019 or 2020.
Aimed Alliance said such programs are rarely transparent in enrollment language about their true mission: to reduce employer costs while making it more difficult for employees to access their full range of benefits. By offsetting the benefit of such copay assistance tools as prescription drug copay cards, copay accumulator programs put employee health at risk and raise many questions about the legality of the programs.
Employees who depend upon assistance to afford drugs that maintain their health tend to either stop using them or cut back on their use. Often, there is no low-cost alternative.
“Some argue that copay accumulator programs are intended to ‘encourage’ patients to select or switch to lower-cost alternative treatments,” the study said. “However, such programs may be viewed more accurately as a punitive measure that forces patients to switch or stop taking their treatment because they cannot afford their high copays or coinsurance once assistance is exhausted. Moreover, in many instances, alternative treatments are not available for many individuals who depend on copay assistance.”
The cost of treatment for medical conditions such as rheumatoid arthritis, hemophilia, cancer, HIV, hepatitis C, and multiple sclerosis, which require specific drugs for treatment, would suddenly shift rapidly to the patient/employee.
The study cited a wide spectrum of potential violations of the Patient Protection and Affordable Care Act; the Federal Trade Commission; ERISA; and a list of state laws that could trigger legal action against the plan. The implication of the report was that, if employers are not motivated by the pursuit of better health for plan members, they should be motivated to have their legal departments research such programs before signing on for them.
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