Insulin Cost-Sharing Limit Q&A Guidance

The Insurance Law requires health insurance policies and contracts to cover equipment and supplies for the treatment of diabetes, including prescription insulin.

Until January 1, 2025, insureds’ out-of-pocket costs for prescription insulin under a health insurance policy or contract are limited to a maximum of $100 for a 30-day supply pursuant to Part DDD of Chapter 56 of the Laws of 2020 (“Chapter 56”), which became effective April 3, 2020.

Beginning January 1, 2025, upon the issuance, renewal, modification, alteration, or amendment of a health insurance policy or contract, cost-sharing for prescription insulin is prohibited pursuant to Part EE of Chapter 58 of the Laws of 2024 (“Chapter 58”).

Applicability

Q-1. When does the law prohibiting cost-sharing for prescription insulin go into effect? 

  • The law prohibiting cost-sharing for insulin goes into effect January 1, 2025, and it applies when a health insurance policy or contract is issued, renewed, modified, altered, or amended on or after that date.
  • The $100 maximum for insulin will continue to apply until a health insurance policy or contract is issued, renewed, modified, altered, or amended on or after January 1, 2025. 

Q-2. Which health insurance policies and contracts are subject to this law? 

  • New York Insurance Law §§ 3216(i)(15-a), 3221(k)(7), and 4303(u) require insurance policies and contracts delivered or issued for delivery in New York, which provide medical coverage that includes coverage for physician services or provide major medical or similar comprehensive-type coverage, to include coverage for equipment and supplies for treatment of diabetes. 

Q-3. Does the law prohibiting cost-sharing for prescription insulin apply to grandfathered health plans?

  • Yes. The law applies to grandfathered health plans.

Q-4. Does the law prohibiting cost-sharing for prescription insulin apply to self-funded ERISA plans?

  • No.  The law does not apply to self-funded ERISA plans.

Q-5. Does the law prohibiting cost-sharing for prescription insulin apply to individual, small group, and large group health insurance policies and contracts?

  • Yes.  The law applies to individual, small group, and large group health insurance policies and contracts.

Q-6. Does the law prohibiting cost-sharing for prescription insulin apply to Child Health Plus, Medicaid Managed Care plans, or the Essential Plan?

  • Cost-sharing for prescription insulin, if any, under Child Health Plus, Medicaid Managed Care plans, or the Essential Plan is subject to other rules.  For more guidance on these programs, contact the New York State Department of Health. 

Cost-Sharing Prohibition for Prescription Insulin

Q-7. What is the cost-sharing limit for prescription insulin under Chapter 56? 

  • Chapter 56 limits the total amount that an insured must pay out-of-pocket for covered prescription insulin.  The amount may not exceed $100 per 30-day supply, regardless of the amount or type of insulin needed to fill an insured’s prescription and regardless of the insured’s deductible, copayment, coinsurance or any other cost-sharing requirement.

Q-8. What is the cost-sharing prohibition for prescription insulin under Chapter 58?

  • Chapter 58 requires that prescription insulin be covered in full without the imposition of any deductible, copayment, coinsurance, or any other cost-sharing requirement.  This applies to high deductible health plans, except for individual catastrophic plans. 

Q-9. Do the cost-sharing restrictions apply across multiple prescriptions for insulin (i.e., different drugs)?  

  • Under Chapter 56, the cost-sharing limit applies to each prescription of insulin so that an insured pays no more than $100 out-of-pocket for each 30-day supply per prescription.
  • Under Chapter 58, each prescription of insulin must be covered in full without the imposition of any deductible, copayment, coinsurance, or any other cost-sharing requirement. 

Q-10. Do the cost-sharing restrictions apply to prescription insulin administered in a provider’s office or other outpatient setting?

  • Under Chapter 56, if cost-sharing is applied to prescription insulin administered during an outpatient visit, it cannot be more than $100.  This does not include cost-sharing applied to the office visit or other services provided during the visit.
  • Under Chapter 58, prescription insulin administered in a provider’s office or other outpatient setting is covered in full without the imposition of any deductible, copayment, coinsurance, or any other cost-sharing requirement.  This cost-sharing prohibition does not apply to the office visit or other services provided during the visit.

Q-11. Do the cost-sharing restrictions apply when Diagnosis Related Group (DRG) billing codes are used and the prescription insulin does not appear as a line item on the billing statement for inpatient services? 

  • No.  Neither the cost-sharing limit for prescription insulin under Chapter 56 nor the cost-sharing prohibition under Chapter 58 applies since cost-sharing is being charged for the inpatient services, typically based on a DRG, not for prescription insulin directly.

Q-12. Do the cost-sharing restrictions apply to prescription insulin administered or dispensed by an out-of-network provider? 

  • No.  Both the cost-sharing limit under Chapter 56 and the cost-sharing prohibition under Chapter 58 apply only to prescription insulin administered or dispensed by an in-network provider. 

Q-13. How should an insurer apply the Chapter 56 cost-sharing limit when two or more partial month supplies of prescription insulin are dispensed within the same 30-day period? 

  • The cost-sharing limit applies to a prescription of insulin for an entire 30-day supply.  The insurer may prorate the cost-sharing for the dispensing of a less than 30-day supply. Alternatively, the insurer may charge the full cost-sharing amount up front (subject to the $100 limit) for the first partial supply and then charge the amount remaining of the $100 limit, if applicable, for the remainder of the 30-day supply.  For example, if $100 is charged up front, then additional cost-sharing may not be applied for the remainder of the 30-day supply.  Charging $100 for each partial dispensing of a 30-day supply of prescription insulin would cause the insured to be charged more than $100 for a 30-day supply and is not permissible.   

Q-14. How should an insurer apply the Chapter 56 cost-sharing limit when two or more partial month supplies of prescription insulin are dispensed over more than a 30-day period?  

  • The cost-sharing limit applies to a prescription of insulin for an entire 30-day supply.  If an insured receives a dispensing of prescription insulin in a 30-day period for less than a 30-day supply, and receives a second dispensing of the same prescription of insulin in a subsequent 30-day period for the remainder of the 30-day supply, the cost-sharing limit for the two combined supplies may not exceed $100.  The insurer may prorate the cost-sharing for the dispensing of less than a 30-day supply. Alternatively, the insurer may charge the full cost-sharing amount up front (subject to the $100 limit) for the first partial supply and then charge up to the amount remaining of the $100 limit, if applicable, for the subsequent partial month supplies that, in total, provide the insured with a 30-day supply.  For example, if $100 is charged up front, then additional cost-sharing may not be applied for the remainder of the 30-day supply, even if provided in a subsequent 30-day period.   

Q-15. How does the Chapter 56 cost-sharing limit apply to prescriptions that are written to provide supplies of insulin that are greater than 30 days (e.g. five packs of insulin pens, 90-day supplies of insulin)?

  • The cost-sharing for prescriptions that are written to provide supplies of insulin for time periods longer than 30 days should be based on the expected usage for the prescription at the time the prescription is dispensed.  For example, if a prescription for a pack of insulin pens provides five pens that each provide a 30-day supply of insulin, the insured’s cost-sharing limit for this prescription would be no more than $500. 

Q-16. Does prescription insulin prescribed for the treatment of diabetes qualify as a preventive care benefit for purposes of Internal Revenue Code section 223(c)(2)?

  • Yes.  The Internal Revenue Service Notice 2019-45 classifies insulin prescribed for the treatment of diabetes as a preventive care benefit for purposes of Internal Revenue Code section 223(c)(2).  Preventive care benefits are permitted to be provided by a high deductible health plan (HDHP) under Internal Revenue Code section 223(c)(2) without a deductible, or with a deductible below the applicable minimum deductible (self-only or family) for an HDHP.

Q-17. Do the Chapter 56 and Chapter 58 cost-sharing restrictions apply to insulin prescribed for the treatment of pre-diabetes?

  • Yes.  Insulin prescribed for the treatment of an individual diagnosed with pre-diabetes is considered a treatment for diabetes, and the cost-sharing restrictions apply.