SB 696 Summary: Prescription Drug Coverage

• Requires health insurers and HMOs to provide at least 60 days' notice before changing prescription drug formularies, with notification to current insureds and their treating physicians about specific drugs affected and the option to submit medical necessity certifications.

• Allows treating physicians to submit a one-page medical necessity form to insurers or HMOs, which if certified, requires coverage continuation at existing levels through the end of the policy year with no increases to out-of-pocket costs, tier changes, or new restrictions like prior authorization.

• Mandates health insurers and HMOs maintain formulary change records and submit annual reports to the Office of Insurance Regulation by March 1, detailing removed drugs, tier changes, numbers of affected insureds, and increased costs.

• Requires pharmacy benefit managers to file annual reports by March 1 detailing payments collected from pharmaceutical manufacturers and amounts passed to insurers and insureds, with reports published on the Office of Insurance Regulation's website within 60 days.

• Establishes that third-party payments, financial assistance, discounts, and patient vouchers for prescription drugs must be applied toward an insured's deductible, copay, cost-sharing responsibility, or out-of-pocket maximum; applies to policies, plans, and contracts entered into or renewed on or after January 1, 2021.