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SB-978, As Passed Senate, June 18, 2026
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SENATE BILL NO. 978
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 3406o (MCL 500.3406o), as amended by 2020 PA
322; and to repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3406o. (1) An insurer that delivers, issues for delivery, 1
or renews in this state a health insurance policy that provides 2
coverage for prescription drugs and limits those benefits to drugs 3
included in a formulary shall do all of the following: 4
(a) Provide for participation of participating physicians, 5
May 14, 2026, Introduced by Senators KLINEFELT, HERTEL, POLEHANKI, WOJNO, GEISS,
CAMILLERI, SANTANA, SHINK and CAVANAGH and referred to Committee on Health
Policy.
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dentists, and pharmacists in the development of the formulary. 1
(b) Disclose to health care providers and upon request to 2
insureds the nature of the formulary restrictions. 3
(c) Provide for exceptions from the formulary limitation when 4
a nonformulary alternative is a medically necessary and appropriate 5
alternative. This subdivision does not prevent an insurer from 6
establishing prior authorization requirements or another process 7
for consideration of coverage or higher cost-sharing for 8
nonformulary alternatives. 9
(2) On a request for an expedited review of coverage for a 10
nonformulary alternative based on exigent circumstances, an insurer 11
shall make a determination and notify the enrollee or the 12
enrollee's designee and the prescribing physician, or other 13
prescriber, as appropriate, of the determination within 24 hours 14
after the insurer receives all information necessary to determine 15
whether the exception should be granted. For purposes of this 16
subsection, exigent circumstances exist when an enrollee is 17
suffering from a health condition that may seriously jeopardize the 18
enrollee's life, health, or ability to regain maximum function or 19
when an enrollee is undergoing a current course of treatment using 20
a nonformulary drug. 21
(3) If subsection (2) does not apply, an insurer shall make a 22
determination on coverage for a nonformulary alternative and notify 23
the enrollee or the enrollee's designee and the prescribing 24
physician, or other prescriber, as appropriate, of the 25
determination within 72 hours after the insurer receives all 26
information necessary to determine whether the exception should be 27
granted. 28
(4) This section is subject to section 3406w. 29
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Final Page
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Enacting section 1. Section 3406w of the insurance code of 1
1956, 1956 PA 218, MCL 500.3406w, is repealed. 2