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SB 914

Insurance: health benefits; application of amount paid by the insured or other certain parties when calculating the insured’s co-pay for a prescription drug; require under certain conditions. Amends 1956 PA 218 (MCL 500.100 - 500.8302) by adding sec. 3406nn.

2025-2026 Regular Session Introduced by Rosemary Bayer and 4 co-sponsors

SB 914 requires insurers to count amounts paid by enrollees or others toward out-of-pocket maximums and cost-sharing for prescription drugs, with HDHPs preserving HSA eligibility.

REFERRED TO COMMITTEE ON FINANCE, INSURANCE, AND CONSUMER PROTECTION
#health:pharmaceuticals #insurance:healthbenefits
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Bill Summary · SB 914

Summary of SB 914 (Michigan, 2025-2026)

Purpose and intent

SB 914 proposes to amend the Michigan Insurance Code to modify how health insurance policies calculate an insured person’s out-of-pocket costs for prescription drugs. The core aim is to ensure that, when determining an insured’s overall cost-sharing obligations and out-of-pocket maximums, the insurer accounts for amounts paid by the enrollee or by another person on the enrollee’s behalf. The bill distinguishes between non-high-deductible plans and high-deductible health plans (HDHPs) and includes special handling for certain tax-related constraints and preventive care.

Key timing note: The bill applies to health insurance policies delivered, issued for delivery, or renewed in Michigan after December 31, 2025.

What the bill would change (key provisions)

  1. Non-HDHP prescription drug coverage (Sec. 3406nn(1))

    • For health insurance policies that are not high-deductible (and that cover prescription drugs), insurers must include any amount paid by the enrollee or by another person on the enrollee’s behalf when calculating:
      • The insured’s out-of-pocket maximum, and
      • Any cost-sharing requirements (e.g., copays, coinsurance, deductibles).

  2. HDHP prescription drug coverage (Sec. 3406nn(2))

    • For HDHPs (plans with higher deductibles) that cover prescription drugs, the same inclusion applies (amounts paid by the enrollee or others on the enrollee’s behalf) when calculating out-of-pocket maximums and cost-sharing.
    • The bill adds a specific constraint: if applying such payments would cause the enrollee’s health savings account (HSA) to be ineligible under IRS rules, the insurer must instead apply the payment after the deductible has been satisfied (i.e., post-deductible treatment of the payment). This ensures the HSA eligibility is preserved in line with federal tax law.
    • The payment may still be applied for coverage of preventive care described under the relevant IRS code section (i.e., regardless of whether the minimum deductible has been met for that preventive care).

  3. Effective date (Sec. 3406nn(3))

    • The section applies to policies delivered, issued for delivery, or renewed after December 31, 2025.

  4. Federal preemption (Sec. 3406nn(4))

    • If any provision of this section conflicts with federal law, federal law prevails.

  5. Definitions (Sec. 3406nn(5))

    • Cost-sharing requirement: includes copayments, coinsurance, deductibles, and annual out-of-pocket maximums (and other related limits) required to receive covered health care services or prescription drugs.
    • Health Savings Account (HSA): Defined per 26 USC 223.
    • High Deductible Health Plan (HDHP): Defined per 26 USC 223.
    • Prescription drug: Defined per 333.17708 (Public Health Code), with a notable exception: a drug without an AB-rated generic equivalent is excluded from the definition unless access is gained through prior authorization, step therapy, or the insurer’s exception process.

Who and what is affected

  • Insurers and health plans in Michigan: The rule applies to policies issued or renewed after 12/31/2025, both HDHPs and non-HDHPs, that cover prescription drugs.
  • Enrollees and their families: Those paying out-of-pocket costs for prescription drugs may see adjustments in how their cost-sharing and out-of-pocket maximums are calculated, potentially changing the timing and amount of their financial responsibility.
  • ** HSAs**: The interaction with HSAs is explicit; if applying payments would jeopardize HSA eligibility, the insurer must apply the payment after the deductible is met, aligning with federal tax rules.

Procedural and timeline notes

  • Introduction and referral: Introduced April 22, 2026, and referred to the Committee on Finance, Insurance, and Consumer Protection.
  • Implementation window: Requires policy actions (delivery/issuance/renewal) after 12/31/2025 to be subject to the new calculation approach.
  • Interactions with federal law: The bill contains a federal preemption clause; any conflict would default to federal law.

Practical implications

  • Potentially broader counting of out-of-pocket expenditures toward deductibles and out-of-pocket maximums, leading to faster reaching of caps for some enrollees.
  • For HDHPs, patients potentially face different timing of payments if their plan would otherwise affect HSA eligibility.
  • Consumers may experience changes in how preventive drug costs are applied, especially when HSAs are involved.

Note: The bill is subject to change through the legislative process and any final enactment could incorporate amendments.

Compiled from official sources — confirm details with the bill’s official record.

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