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HB 937

Prohibit certain health insurance cost-sharing practices

136th Legislature (2025-2026) Introduced by Rachel Baker and 1 co-sponsor

HB 937 tightens cost-sharing rules and rate filings for health insurers and PBMs in Ohio, requiring actuarial certification, annual reporting, and limits to out-of-pocket costs.

Referred to committee
#commerce #insurance
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Bill Summary · HB 937

Summary of HB 937 (136th General Assembly, Ohio)

Purpose and intent

  • The bill aims to prohibit certain health insurance cost-sharing practices by health insuring corporations, sickness and accident insurers, and pharmacy benefit managers (PBMs). It establishes standards to ensure copayments, coinsurance, deductibles, and other cost-sharing mechanisms are reasonable and not barriers to necessary care. It also tightens oversight of prepayment/premium rate filings and requires annual reporting and actuarial certification.

Key provisions and changes

  1. Regulation of cost-sharing and rate filings (amends § 1751.12, adds § 3923.811, § 3959.21; repeals § 1751.12 and § 1751.32)

    • For nongroup, conversion, and group health policies:
      • Any contractual periodic prepayment (prepaid rates) and premium rates or amendments must be filed with the Ohio Superintendent of Insurance and include an actuarial certification.
      • Filings take effect after a 60-day review window unless the superintendent approves earlier; the superintendent can disapprove if not sound actuarially or not reasonably related to coverage/enrollees.
      • The superintendent can withdraw approval at any time with 30 days’ notice based on actuarial soundness or relation to coverage/enrollees.
      • Disapprovals, rejections, or withdrawals must be in writing with specific bases stated.
    • For specific federally funded or state-administered programs (e.g., Medicare, FEHBP, Medicaid, and certain state contracts):
      • The policy may use an approved prepayment/ premium rate if it has prior approval from the federal or applicable state agency and is filed with the Ohio superintendent with documentation of that approval.
    • Administrative expense disclosure: Administrative costs in filings must reflect actual costs; the superintendent may require itemization.

  2. Copy-sharing limits and actuarial certification (D sections)

    • Copayments, cost sharing, and deductibles must be reasonable and not block necessary utilization.
    • Two main measurement standards for annual cost-sharing limits:
      • (a) The annual limit on cost sharing under 42 U.S.C. 18022.
      • (b) A 40% cap of the total annual cost to the insurer of providing all covered services for a standard population, with definitions of “total annual cost” including discounted provider costs.
    • An actuary certified by the American Academy of Actuaries must demonstrate compliance with the 40% standard (per U.S. actuarial standards).
    • Specific restrictions on coverage design based on prescription drug assistance, with exceptions for federal tax-advantaged Health Savings Accounts (HSAs) and certain preventive services.
    • Provisions to exclude certain plans (e.g., catastrophic plans, HDHPs tied to HSAs) from some cost-sharing limits under specified circumstances.
    • Provisions regarding brand-name drugs with generic substitutes: higher brand copays may be allowed only when the brand is medically necessary; otherwise, many cost-shares must reflect generic equivalents.

  3. No lifetime maximums on basic services; limits on inpatient hospital benefits (E)

    • No lifetime maximums on basic health care services.
    • May set limits for inpatient hospital services under supplemental health care contracts.

  4. Plan customization and rules (G)

    • Employers or plan sponsors may request higher copayments/cost sharing/deductibles, and insurers may accommodate those adjustments without requiring bespoke plans for every group/individual.

  5. Annual reporting requirements (§ 1751.32)

    • Health insuring corporations must file an annual report by March 1 detailing:
      • Financial statements, including premiums, expenditures, and capital improvements.
      • Enrollee population and composition.
      • Enrollee complaints and dispositions.
      • Policy terminations and number of enrollees affected.
      • Information from related state statutes and officer details, including compensation and any financial interests.
      • An actuarial opinion on compliance with cost-sharing provisions.
      • Certification of compliance with the D section on cost-sharing.

  6. PBMs (§ 3959.21)

    • Defines PBMs and related entities.
    • PBMs must comply with applicable copayment, cost-sharing, deductible, and related requirements in §§ 1751.12 and 3923.811.
    • PBMs must not condition plan terms on information about drug pricing assistance.
    • Annual certification to the superintendent by March 1 confirming compliance.

  7. Effective date and sunset of certain provisions

    • Provisions applying to health benefit plans delivered, issued for delivery, modified, or renewed on or after January 1, 2027.
    • The act harmonizes the composite version of § 1751.12 with prior amendments to ensure operability of the combined text.

Who is affected

  • Health insuring corporations (HICs) and their products for nongroup, conversion, and group policies.
  • Sickness and accident insurers (including those offering prescription drug coverage).
  • Pharmacy benefit managers (PBMs) operating in Ohio and their contracted plans.
  • Federal or state programs that have pre-approved rates (Medicare, FEHBP, Medicaid, and certain state contracts) when those rates are filed and approved as described.

Procedural and timeline aspects

  • New rate filings require a 60-day review window by the Ohio Superintendent of Insurance; approval can be granted sooner or disapproval issued.
  • Refiled or revised filings must follow the same actuarial certification and filing requirements.
  • Annual reporting for HICs and PBMs is due by March 1 each year, covering the preceding calendar year.
  • Applicability is limited to health benefit plans delivered or renewed on or after January 1, 2027.
  • The bill repeals existing sections (1751.12 and 1751.32) and replaces them with the amended and newly enacted provisions.

Overall impact

  • Introduces tighter control over cost-sharing design to prevent excessive patient out-of-pocket costs.
  • Increases insurer and PBM transparency through actuarial certifications and annual reporting.
  • Establishes a uniform framework for prepayment and premium filings, with state oversight to ensure actuarial soundness and alignment with beneficiary needs.
  • Aligns state rules with federal considerations (e.g., HSAs, preventive care) and allows for certain federal program rate approvals to be used in Ohio.

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

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