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SB26-167 • 2026

Prescription Drug Out-of-Pocket Expense Credit

Subject to certain exceptions, the bill requires a carrier of an individual or group health benefit plan in Colorado (plan), beginning on January 1, 2028, when calculating a covered person's overall c

Healthcare
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Sen. A. Benavidez, Sen. K. Mullica, Rep. A. Boesenecker, Rep. M. Lindsay
Last action
2026-04-16
Official status
Introduced In Senate - Assigned to Health & Human Services
Effective date
Not listed

Plain English Breakdown

The bill summary provided is incomplete, so some details might be missing or uncertain.

Prescription Drug Out-of-Pocket Expense Credit

This bill requires health insurance carriers in Colorado to credit out-of-pocket expenses for prescription drugs purchased directly from pharmacies, healthcare providers, or direct-to-consumer platforms towards the policyholder's annual maximum limit starting January 1, 2028.

What This Bill Does

  • Requires health insurance carriers to account for and credit direct purchase of prescription drug costs toward a person's yearly out-of-pocket spending limit.
  • Limits the credit if the cost is higher than what would be paid at an in-network pharmacy or if the drug isn't covered by the plan.
  • Prohibits credits if proof of payment is not provided.

Who It Names or Affects

  • People with health insurance in Colorado who buy prescription drugs directly from pharmacies, healthcare providers, or direct-to-consumer platforms.

Terms To Know

Out-of-pocket maximum
The most a person has to pay for covered services each year before the plan pays 100% of the costs.
Formulary
A list of prescription drugs that are covered by an insurance plan.

Limits and Unknowns

  • The bill does not apply to expenses incurred before January 1, 2028.
  • It is unclear how many people will be affected since it depends on individual health plans and direct drug purchases.

Bill History

  1. 2026-04-16 Senate

    Introduced In Senate - Assigned to Health & Human Services

Official Summary Text

Subject to certain exceptions, the bill requires a carrier of an individual or group health benefit plan in Colorado (plan), beginning on January 1, 2028, when calculating a covered person's overall contribution to an out-of-pocket maximum or cost-sharing requirement under the plan (contribution), to account for and credit to the covered person's contribution an out-of-pocket expense that the covered person incurs by purchasing a prescription drug directly from a pharmacy, health-care provider, or direct-to-consumer platform (direct purchase of a prescription drug). The carrier shall apply the credit to the covered person's contribution that is applicable in the plan year in which the expense from the direct purchase of a prescription drug was incurred.
To receive a contribution credit for an out-of-pocket expense that a covered person incurred because of a direct purchase of a prescription drug, the covered person must provide proof of payment to the carrier. If the covered person does not provide proof of payment, the carrier is prohibited from applying the contribution credit.
The bill also prohibits a carrier from applying the contribution credit in certain other instances. Specifically, the carrier shall not apply the contribution credit:
For an amount of the covered person's out-of-pocket expense from the direct purchase of a prescription drug that is greater than the amount the covered person would have incurred if they had obtained the same prescription drug in the same plan year from an in-network pharmacy and pursuant to the terms of their plan;
If the covered person incurred the out-of-pocket expense by purchasing a prescription drug that is not covered under the formulary of the covered person's plan, unless an exception is granted; or
If the covered person does not comply with the carrier's utilization management processes, including prior authorization and step therapy protocols required under the covered person's plan.
(Note: This summary applies to this bill as introduced.)

Current Bill Text

Read the full stored bill text 
Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED

LLS NO. 26-0939.01 Eden Rolland x2373 SENATE BILL 26-167
Senate Committees House Committees
Health & Human Services
A BILL FOR AN ACT
CONCERNING A COVERED PERSON'S CONTRIBUTION UNDER A HEALTH101
BENEFIT PLAN BASED ON OUT -OF-POCKET EXPENSES102
ATTRIBUTABLE TO THE PURCHASE OF PRESCRIPTION DRUGS.103
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov.)
Subject to certain exceptions, the bill requires a carrier of an
individual or group health benefit plan in Colorado (plan), beginning on
January 1, 2028, when calculating a covered person's overall contribution
to an out-of-pocket maximum or cost-sharing requirement under the plan
(contribution), to account for and credit to the covered person's
SENATE SPONSORSHIP
Benavidez and Mullica,
HOUSE SPONSORSHIP
Boesenecker and Lindsay,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law.
contribution an out-of-pocket expense that the covered person incurs by
purchasing a prescription drug directly from a pharmacy, health-care
provider, or direct-to-consumer platform (direct purchase of a
prescription drug). The carrier shall apply the credit to the covered
person's contribution that is applicable in the plan year in which the
expense from the direct purchase of a prescription drug was incurred.
To receive a contribution credit for an out-of-pocket expense that
a covered person incurred because of a direct purchase of a prescription
drug, the covered person must provide proof of payment to the carrier. If
the covered person does not provide proof of payment, the carrier is
prohibited from applying the contribution credit.
The bill also prohibits a carrier from applying the contribution
credit in certain other instances. Specifically, the carrier shall not apply
the contribution credit:
! For an amount of the covered person's out-of-pocket
expense from the direct purchase of a prescription drug that
is greater than the amount the covered person would have
incurred if they had obtained the same prescription drug in
the same plan year from an in-network pharmacy and
pursuant to the terms of their plan;
! If the covered person incurred the out-of-pocket expense by
purchasing a prescription drug that is not covered under the
formulary of the covered person's plan, unless an exception
is granted; or
! If the covered person does not comply with the carrier's
utilization management pr ocesses, including prior
authorization and step therapy protocols required under the
covered person's plan.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 10-16-161, add (2.5)2
as follows:3
10-16-161. Calculation of contribution to out-of-pocket and4
cost-sharing requirements - exception - definition - rules.5
(2.5) (a) BEGINNING JANUARY 1, 2028, AND EXCEPT AS PROVIDED6
IN SUBSECTION (2.5)(d) OF THIS SECTION, WHEN CALCULATING A COVERED7
PERSON'S OVERALL CONTRIBUTION TO AN OUT-OF-POCKET MAXIMUM OR8
COST-SHARING REQUIREMENT UNDER THE COVERED PERSON 'S HEALTH9
SB26-167-2-
BENEFIT PLAN, A CARRIER THAT DELIVERS, ISSUES, RENEWS, AMENDS, OR1
CONTINUES COVERAGE FOR AN INDIVIDUAL OR GROUP HEALTH BENEFIT2
PLAN IN THIS STATE SHALL ACCOUNT FOR AND CREDIT TO THE COVERED3
PERSON'S OVERALL CONTRIBUTION TO THE OUT-OF-POCKET MAXIMUM OR4
COST-SHARING REQUIREMENT AN OUT -OF-POCKET EXPENSE THAT THE5
COVERED PERSON INCURS BY:6
(I) PURCHASING A PRESCRIPTION DRUG; AND7
(II) DIRECTLY PAYING A PHARMACY, HEALTH-CARE PROVIDER, OR8
DIRECT-TO-CONSUMER PLATFORM FOR THE PRESCRIPTION DRUG.9
(b) I N ORDER TO RECEIVE CREDIT FOR AN OUT -OF-POCKET10
EXPENSE AS DESCRIBED IN SUBSECTION (2.5)(a) OF THIS SECTION , A11
COVERED PERSON WHO PURCHASES A PRESCRIPTION DRUG IN ACCORDANCE12
WITH SUBSECTION (2.5)(a) OF THIS SECTION SHALL PROVIDE TO THE13
CARRIER PROOF OF PAYMENT FOR THE COVERED PERSON 'S PURCHASE OF14
THE PRESCRIPTION DRUG.15
(c) A CARRIER THAT ACCOUNTS FOR AND CREDITS A COVERED16
PERSON'S OUT-OF-POCKET EXPENSE IN ACCORDANCE WITH SUBSECTION17
(2.5)(a) OF THIS SECTION SHALL APPLY THE CREDIT TO THE COVERED18
PERSON'S OVERALL CONTRIBUTION TO AN OUT-OF-POCKET MAXIMUM OR19
COST-SHARING REQUIREMENT UNDER THE COVERED PERSON 'S HEALTH20
BENEFIT PLAN THAT IS APPLICABLE IN THE PLAN YEAR IN WHICH THE21
OUT-OF-POCKET EXPENSE WAS INCURRED.22
(d) A CARRIER SHALL NOT CREDIT A COVERED PERSON 'S23
OUT-OF-POCKET EXPENSE IN ACCORDANCE WITH SUBSECTION (2.5)(a) OF24
THIS SECTION:25
(I) FOR AN AMOUNT OF THE OUT-OF-POCKET EXPENSE INCURRED26
THAT IS GREATER THAN THE AMOUNT OF AN OUT -OF-POCKET EXPENSE27
SB26-167-3-
THAT THE COVERED PERSON WOULD HAVE INCURRED , ACCORDING TO1
DRUG COST DATA AVAILABLE PURSUANT TO SECTION 10-16-122.9 (1)(c),2
IF THE COVERED PERSON HAD OBTAINED THE SAME PRESCRIPTION DRUG IN3
THE SAME PLAN YEAR FROM AN IN-NETWORK PHARMACY AND PURSUANT4
TO THE TERMS OF THE COVERED PERSON'S HEALTH BENEFIT PLAN. IN SUCH5
CIRCUMSTANCES, THE CARRIER SHALL APPLY CREDIT FOR ONLY THE6
AMOUNT THAT IS EQUAL TO OR LESS THAN THE AMOUNT OF THE7
OUT-OF-POCKET EXPENSE THAT THE COVERED PERSON WOULD HAVE8
INCURRED, ACCORDING TO DRUG COST DATA AVAILABLE PURSUANT TO9
SECTION 10-16-122.9 (1)(c), IF THE COVERED PERSON HAD OBTAINED THE10
SAME PRESCRIPTION DRUG IN THE SAME PLAN YEAR FROM AN IN-NETWORK11
PHARMACY AND PURSUANT TO THE TERMS OF THE COVERED PERSON 'S12
HEALTH BENEFIT PLAN.13
(II) IF THE COVERED PERSON:14
(A) D OES NOT PROVIDE PROOF OF PAYMENT PURSUANT TO15
SUBSECTION (2.5)(b) OF THIS SECTION; OR16
(B) INCURRED THE OUT -OF-POCKET EXPENSE BY PURCHASING A17
PRESCRIPTION DRUG THAT IS NOT COVERED UNDER THE FORMULARY OF18
THE COVERED PERSON'S HEALTH BENEFIT PLAN, UNLESS AN EXCEPTION IS19
GRANTED PURSUANT TO SECTION 10-16-113.5 (2)(a)(IV).20
SECTION 2. Act subject to petition - effective date. This act21
takes effect at 12:01 a.m. on the day following the expiration of the22
ninety-day period after final adjournment of the general assembly (August23
12, 2026, if adjournment sine die is on May 13, 2026); except that, if a24
referendum petition is filed pursuant to section 1 (3) of article V of the25
state constitution against this act or an item, section, or part of this act26
within such period, then the act, item, section, or part will not take effect27
SB26-167-4-
unless approved by the people at the general election to be held in1
November 2026 and, in such case, will take effect on the date of the2
official declaration of the vote thereon by the governor.3
SB26-167-5-