An Act amending Title 40 (Insurance) of the Pennsylvania Consolidated Statutes, providing for prescription drug cost credits in health insurance; and imposing penalties.

PRIOR PRINTER'S NO. 3661 PRINTER'S NO. 3707
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2652
Session of
2026
INTRODUCED BY KINKEAD, McNEILL, PROBST, GUZMAN, HOWARD, SANCHEZ,
HOHENSTEIN, DEASY, OTTEN, D. WILLIAMS AND CIRESI,
JUNE 18, 2026
AS REPORTED FROM COMMITTEE ON INSURANCE, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 24, 2026
AN ACT
Amending Title 40 (Insurance) of the Pennsylvania Consolidated
Statutes, providing for prescription drug cost credits in
health insurance; and imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 40 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read:
CHAPTER 52
PRESCRIPTION DRUG COST CREDITS IN HEALTH INSURANCE
Sec.
5201. Scope of chapter.
5202. Definitions.
5203. Prescription drug cost credit requirement.
5204. Exceptions.
5205. Protections.
5206. Submission process.
5207. Notice.
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5208. Exemption.
5209. Regulations.
5210. Enforcement.
§ 5201. Scope of chapter.
This chapter relates to the crediting of out-of-pocket costs
paid for prescription drugs toward health plan cost-sharing.
§ 5202. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Commissioner." The Insurance Commissioner of the
Commonwealth.
"Cost-sharing." As follows:
(1) The share of the health care costs covered by a
health benefit plan that a covered person pays out-of-pocket.
(2) The term includes deductibles, coinsurance,
copayments and similar charges.
(3) The term does not include premiums, balance billed
amounts from an out-of-network health care provider or the
cost of noncovered services except as specified in this
chapter.
"Covered person." A policyholder, subscriber or other
individual who is entitled to receive health care services under
a health benefit plan.
"Generically equivalent drug." As defined in section 2 of
the act of November 24, 1976 (P.L.1163, No.259), known as the
Generic Equivalent Drug Law.
"Health benefit plan." As defined in section 103 of the act
of November 21, 2016 (P.L.1318, No.169), known as the Pharmacy
Audit Integrity and Transparency Act.
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"Health care provider." A person who is licensed, certified
or otherwise regulated to provide health care services under the
laws of this Commonwealth.
"Health care services." Covered treatment, admission,
procedure, medical supplies and equipment or other services,
including behavioral health, prescribed or otherwise provided or
proposed to be provided by a health care provider to a covered
person for the diagnosis, prevention, treatment, cure or relief
of a health condition, illness, injury or disease under the
terms of a health benefit plan.
"Health insurer." As defined in section 103 of the Pharmacy
Audit Integrity and Transparency Act.
"Health insurer client." As defined in section 103 of the
Pharmacy Audit Integrity and Transparency Act.
"Interchangeable biological product." As defined in section
2 of the Generic Equivalent Drug Law.
"Out-of-network provider." A health care provider who does
not contract with a health insurer client to provide health care
services to a covered person under a health benefit plan.
"Pharmacy benefits manager." As defined in section 103 of
the Pharmacy Audit Integrity and Transparency Act.
"Prescription drug." The term shall include:
(1) A drug, a generically equivalent drug, a biological
product or an interchangeable biological product, as those
terms are defined in section 2 of the Generic Equivalent Drug
Law, that is prescribed by a health care provider.
(2) Insulin, insulin syringes and insulin needles.
"Prescription drug coverage administrator." A health benefit
plan, health insurer or a pharmacy benefits manager that
administers pharmacy benefits for a health insurer client.
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§ 5203. Prescription drug cost credit requirement.
(a) Credits.--Except as provided in subsection (d), a
prescription drug coverage administrator shall credit toward the
covered person's in-network out-of-pocket maximum and other
cost-sharing requirements an out-of-pocket expense that the
covered person incurs by directly purchasing a prescription drug
from a pharmacy or through a discount drug purchasing entity.
(b) Application of credit.--The credit shall be applied to
the covered person's in-network out-of-pocket maximum for the
plan year in which the out-of-pocket expense is incurred and
without regard to whether:
(1) the pharmacy or discount drug purchasing entity has
a contract or other arrangement with the prescription drug
coverage administrator of the covered person's health benefit
plan; or
(2) the health benefit plan has a separate out-of-
network cost-sharing requirement or no out-of-network
benefit.
(c) Proof of purchase requirement.--To receive credit for an
out-of-pocket expense as described in subsection (a), the
covered person shall submit proof of purchase to the
prescription drug coverage administrator in accordance with
section 5206 (relating to submission process).
(d) Limitation.--A prescription drug coverage administrator
may limit the amount of the credit of a covered person's out-of-
pocket expense in accordance with subsection (a) to the lesser
of:
(1) The amount the covered person incurred.
(2) The amount the covered person would have incurred if
the covered person had obtained the same prescription drug in
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the same plan year from an in-network pharmacy and under the
terms of the covered person's health benefit plan.
§ 5204. Exceptions.
A prescription drug coverage administrator may decline to
credit a covered person's out-of-pocket expense as required in
section 5203 (relating to prescription drug cost credit
requirement) if:
(1) The covered person, or the covered person's provider
on the covered person's behalf, does not do both of the
following:
(i) Provide proof of purchase as required in
sections 5203(b) and 5206 (relating to submission
process).
(ii) Comply with the prescription drug coverage
administrator's utilization management processes,
including prior authorization and step therapy protocols
required under the covered person's health benefit plan.
(2) The prescription drug is not covered under the
formulary of the covered person's health benefit plan, and no
drug exception has been granted.
(3) The prescription drug is experimental,
investigational or unsafe for the covered person.
(4) The prescription drug coverage administrator is
engaged in a reasonable investigation for, or has made a
finding of, fraud, waste or abuse with respect to the
prescribing health care professional or the covered person.
§ 5205. Protections.
Nothing in this chapter shall require a health benefit plan
to credit the cost share of a prescription drug in derogation of
a policyholder's constitutional protections of religious freedom
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under:
(1) The act of December 9, 2002 (P.L.1701, No.214),
known as the Religious Freedom Protection Act.
(2) 42 U.S.C. Ch. 21B (relating to religious freedom
restoration).
§ 5206. Submission process.
(a) Process required.--A prescription drug coverage
administrator shall establish a streamlined process for a
covered person to submit a request for credit of the covered
person's payment for a prescription drug to the covered person's
contribution to a cost-sharing requirement under a health
benefit plan.
(b) Process requirements.--The submission process:
(1) Shall be described in a manner that complies with
the language requirements of 42 U.S.C. §§ 18031(e)(3)(B)
(relating to affordable choices of health benefits plans) and
18116 (relating to nondiscrimination) and their regulations,
including 45 CFR Subt. A Subch. A Pt. 92 (relating to
nondiscrimination in health programs or activities) and
Subch. B Pts. 149 (relating to surprise billing and
transparency requirements), 155 (relating to exchange
establishment standards and other related standards under the
Affordable Care Act) and 156 (relating to health insurance
issuer standards under the Affordable Care Act, including
standards related to exchanges).
(2) Shall be available at a minimum both in the covered
person's health benefit plan and on the health insurer's
publicly accessible Internet website.
(3) Shall permit submission both through electronic
means and by mail.
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(4) May require submission of satisfactory proof of
purchase, including evidence of the purchase date and amount
and the identification of the prescription drug purchased.
Examples of satisfactory proof of purchase include a dated
and itemized receipt or a pharmacy record.
(5) May require that the covered person submit proof of
purchase no later than 90 days after the purchase.
(6) Must be operational by no later than 180 days after
the effective date of this paragraph.
§ 5207. Notice.
(a) Maximum out-of-pocket.--Within 10 business days of
becoming aware that a covered person reached the person's in-
network maximum out-of-pocket limit, a prescription drug
coverage administrator shall notify the covered person that the
covered person's health benefit plan will pay 100% of covered
costs for the remainder of the year at an in-network pharmacy
and that reimbursement for out-of-pocket purchases of covered
drugs will not be paid to the covered person.
(b) Limitation.--Nothing in this chapter shall require a
prescription drug coverage administrator to make payment to a
covered person to reimburse an out-of-pocket purchase of a
prescription drug once the covered person's maximum out-of-
pocket limit is reached.
§ 5208. Exemption.
(a) Exemption.--The requirements of this chapter shall not
apply to a prescription drug coverage administrator that
contracts or has an arrangement with a pharmacy or discount drug
purchasing entity that makes available a transparent pricing
model to covered persons, if the prescription drug coverage
administrator makes available all drugs covered under the terms
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of the covered person's health benefit plan that are offered
from that pharmacy or discount drug purchasing entity as part of
the contract or arrangement with the health benefit plan.
(B) LOSS OF EXEMPTION.--A PRESCRIPTION DRUG COVERAGE
ADMINISTRATOR THAT NO LONGER QUALIFIES FOR THE EXEMPTION UNDER
THIS SECTION SHALL COMPLY WITH ALL APPLICABLE REQUIREMENTS OF
THIS CHAPTER WITHIN 60 DAYS AFTER THE DATE ON WHICH THE
PRESCRIPTION DRUG COVERAGE ADMINISTRATOR FAILS TO MEET THE
REQUIREMENTS FOR THE EXEMPTION, WHICH MAY BE EXTENDED AT THE
DISCRETION OF THE COMMISSIONER.
(b) (C) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Transparent pricing model." A pricing arrangement made
available to a covered person, directly or through a pharmacy
benefits manager, pharmacy network or other contracted entity,
that meets all of the following requirements:
(1) The price for a prescription drug is both:
(i) Disclosed to the covered person in advance of
purchase.
(ii) Based on a clearly defined formula or
methodology, including a cost-plus, fixed markup or
similar methodology, that is not contingent on post-sale
rebates, retrospective adjustments or other undisclosed
financial considerations.
(2) The covered person is able to purchase the
prescription drug at the disclosed price.
(3) Any applicable fees, markups or dispensing charges
are identifiable to the covered person in advance of
purchase.
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§ 5209. Regulations.
The department may promulgate regulations as necessary and
appropriate to carry out the provisions of this chapter.
§ 5210. Enforcement.
(a) Penalties.--After satisfactory evidence of the violation
of this chapter by a prescription drug coverage administrator,
one or more of the following penalties may be imposed at the
commissioner's discretion:
(1) Suspension or revocation of the offending entity's
license or registration.
(2) Refusal, for a period not to exceed one year, to
issue a new license or registration to the offending entity.
(3) A fine of not more than $5,000 for each violation of
this chapter.
(4) A fine of not more than $10,000 for each willful
violation of this chapter.
(b) Limitation.--Fines imposed against an entity under this
section may not exceed $500,000 in the aggregate during a single
calendar year.
(c) Additional remedies.--The enforcement remedies imposed
under this section are in addition to any other remedies or
penalties that may be imposed under any other applicable law of
this Commonwealth, including:
(1) The act of July 22, 1974 (P.L.589, No.205), known as
the Unfair Insurance Practices Act. A violation of this
chapter shall be deemed to be an unfair method of competition
and an unfair or deceptive act or practice under the Unfair
Insurance Practices Act.
(2) The act of December 18, 1996 (P.L.1066, No.159),
known as the Accident and Health Filing Reform Act.
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(3) The act of June 25, 1997 (P.L.295, No.29), known as
the Pennsylvania Health Care Insurance Portability Act.
(4) The act of November 21, 2016 (P.L.1318, No.169),
known as the Pharmacy Audit Integrity and Transparency Act.
(d) Administrative procedure.--The administrative provisions
of this chapter shall be subject to 2 Pa.C.S. Ch. 5 Subch. A
(relating to practice and procedure of Commonwealth agencies). A
party against whom penalties are assessed in an administrative
action may appeal to Commonwealth Court as provided in 2 Pa.C.S.
Ch. 7 Subch. A (relating to judicial review of Commonwealth
agency action).
Section 2. This act shall apply as follows:
(1) For health benefit plans for which either rates or
forms are required to be filed with the department, the
addition of 40 Pa.C.S. Ch. 52 shall apply to any policy for
which a form or rate is first filed on or after the effective
date of this paragraph.
(2) For health benefit plans for which neither rates nor
forms are required to be filed with the department, the
addition of 40 Pa.C.S. Ch. 52 shall apply to any policy
issued or renewed on or after 180 days after the effective
date of this paragraph.
Section 3. This act shall take effect in 60 days.
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