HHS Withdraws Rebate Rule Over Which HR Policy Voiced Concerns

July 12, 2019

The Department of Health and Human Services has decided not to proceed with a final prescription drug rebate rule that would have negatively impacted employer-sponsored health care benefits.

In a letter to HHS, HR Policy Association said there would not be a long enough implementation period for employers and the health care supply chain to adjust to the rule and that it would likely result in higher premiums or dropped coverage for retirees.

The proposed rule would have required point-of-sale rebates for employer-sponsored plans, including employer group waiver plans (EGWP), which would have required employers to either significantly increase premiums in 2020 or discontinue the EGWP offering due to the increased cost burden.

Congressional action still a possibility:  Although HHS is unlikely to go forward with a similar rulemaking in the near future, both the House and Senate are working on bipartisan legislation on drug prices that may impact drug rebates.  The Association will continue to monitor these bills.