H 3934

South Carolina General Assembly
126th Session, 2025-2026
Bill 3934
Indicates Matter Stricken
Indicates New Matter
(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)
A bill
TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING SECTION
38-71-295 SO AS TO DEFINE TERMS AND TO INCLUDE REFERENCES TO THE FEDERAL
INTERNAL REVENUE CODE FOR PURPOSES OF COST SHARING; AND BY ADDING SECTION 38-71-2270
SO AS TO DEFINE TERMS AND TO INCLUDE REFERENCES TO THE FEDERAL INTERNAL REVENUE
CODE FOR PURPOSES OF COST SHARING.
Be it enacted by the
General Assembly of the State of South Carolina:
SECTION 1.  Article 1, Chapter 71, Title 38 of the S.C. Code is
amended by adding:
    Section
38-71-295. (A) as used in this
section:
       (1)
"Cost sharing" means any copayment, coinsurance, deductible, or other similar
charges required of an enrollee for a healthcare service covered by a health
plan, including a prescription drug, and paid by or on behalf of such enrollee.
       (2)
"Enrollee" means any individual entitled to healthcare services from an
insurer.
       (3)
"Healthcare service" means an item or service furnished to any individual for
the purpose of preventing, alleviating, curing, or healing human illness,
injury, or physical disability.
       (4)
"Health plan" means a policy, contract, certification, or agreement offered or
issued by an insurer to provide, deliver, arrange for, pay for, or reimburse
any of the costs of healthcare services.
       (5)
"Insurer" means an entity subject to the insurance laws and rules of insurance
in this State or subject to the jurisdiction of the director, that contracts or
offers to contract to provide, deliver, arrange for, pay for, or reimburse any
of the costs of healthcare services under a health plan in this State.
       (6)
"Person" means a natural person, corporation, mutual company, unincorporated
association, partnership, joint venture, limited liability company, trust,
estate, foundation, not-for-profit corporation, unincorporated organization,
government or governmental subdivision or agency.
       (7)
"Third-party administrator" means any person that directly or indirectly
solicits or effects coverage of, underwrites, collects charges or premiums
from, arranges alternative access to or funding for prescription drugs, or
adjusts or settles claims on, residents of this State or residents of another
state from offices in this State, in connection with health insurance coverage.
    (B) The
annual limitation on cost sharing provided for under 42 U.S.C. Section
18022(c)(1) applies to all healthcare services covered under any health plan
offered or issued by an insurer in this State.
    (C) When
calculating an enrollee's contribution to any applicable cost-sharing
requirement, an insurer or third-party administrator must include any cost-sharing
amounts paid by the enrollee or on behalf of the enrollee by another person. If
under federal law, application of this requirement would result in Health
Savings Account ineligibility under Section 223 of the federal Internal Revenue
Code, this requirement applies for Health Savings Account-qualified High
Deductible Health Plans with respect to the deductible of such a plan after the
enrollee has satisfied the minimum deductible under Section 223, except for
with respect to items or services that are preventive care pursuant to Section
223(c)(2)(C) of the federal Internal Revenue Code, in which case the
requirements of this paragraph applies regardless of whether the minimum
deductible under Section 223 has been satisfied.
    (D)
Subsection (C) does not apply to a prescription drug for which there is a
medically appropriate generic equivalent, unless the enrollee has obtained
access to the brand name prescription drug through prior authorization, a step
therapy protocol, the insurer's exceptions and appeals process, or as specified
in Section 39-24-30 (A).
    (E)
An insurer or third-party administrator may not directly or indirectly set,
alter, implement, or condition the terms of health plan coverage, including the
benefit design, based in part or entirely on information about the availability
or amount of financial or product assistance available for a prescription
drug. 
    (F)
This section applies with respect to health plans that are entered into,
amended, extended, or renewed on or after January 1, 2026.
    (G)
In implementing the requirements of this section, the State only may regulate
an insurer to the extent permissible under applicable law.
    (H)
The director or his designee may promulgate rules and regulations as it deems
necessary to implement this section.
SECTION 2.  Article 21, Chapter 71, Title 38 of the S.C. Code is
amended by adding:
    Section
38-71-2270.  (A) As used in this
section:
       (1)
"Cost sharing" means any copayment, coinsurance, deductible, or other similar
charges required of an enrollee for a healthcare service covered by a health
plan, including a prescription drug, and paid by or on behalf of such enrollee.
       (2)
"Enrollee" means any individual entitled to healthcare services from an
insurer.
       (3)
"Healthcare service" means an item or service furnished to any individual for
the purpose of preventing, alleviating, curing, or healing human illness,
injury, or physical disability.
       (4)
"Health plan" means a policy, contract, certification, or agreement offered or
issued by an insurer to provide, deliver, arrange for, pay for, or reimburse
any of the costs of healthcare services.
       (5)
"Insurer" means an entity subject to the insurance laws and rules of insurance
in this State or subject to the jurisdiction of the director, that contracts or
offers to contract to provide, deliver, arrange for, pay for, or reimburse any
of the costs of healthcare services under a health plan in this State.
       (6)
"Pharmacy benefit management service" means:
  (a)
negotiating the price of prescription drugs, including negotiating and
contracting for direct or indirect rebates, discounts, or other price
concessions;
  (b)
managing any aspect of a prescription drug benefit including, but not limited
to, the processing and payment of claims for prescription drugs, arranging
alternative access to or funding for prescription drugs, the performance of
drug utilization review, the processing of drug prior authorization requests,
the adjudication of appeals or grievances related to the prescription drug
benefit, contracting with network pharmacies, controlling the cost of covered
prescription drugs, managing or providing data relating to the prescription
drug benefit, or the provision of services related thereto;
  (c)
performance of any administrative, managerial, clinical, pricing, financial,
reimbursement, data administration, or reporting, or billing service; and
  (d)
such other services as the director may define in regulation.
       (7)
"Pharmacy benefit manager" means any person that, pursuant to a written
agreement with an insurer or health plan, either directly or indirectly,
provides one or more pharmacy benefit management services on behalf of the
insurer or health plan, and any agent, contractor, intermediary, affiliate,
subsidiary, or related entity of such person who facilitates, provides,
directs, or oversees the provision of the pharmacy benefit management services.
       (8)
"Person" means a natural person, corporation, mutual company, unincorporated
association, partnership, joint venture, limited liability company, trust,
estate, foundation, not-for-profit corporation, unincorporated organization,
government or governmental subdivision or agency.
    (B) The
annual limitation on cost sharing provided for under 42 U.S.C. Section
18022(c)(1) applies to all healthcare services covered under any health plan
offered or issued by an insurer in this State, including a health plan
administered by a pharmacy benefit manager.
    (C) When
calculating an enrollee's contribution to any applicable cost-sharing
requirement, a pharmacy benefit manager includes any cost-sharing amounts paid
by the enrollee or on behalf of the enrollee by another person. If under
federal law, application of this requirement would result in Health Savings
Account ineligibility under Section 223 of the federal Internal Revenue Code,
this requirement applies for Health Savings Account-qualified High Deductible
Health Plans with respect to the deductible of such a plan after the enrollee
has satisfied the minimum deductible under Section 223, except for with respect
to items or services that are preventive care pursuant to Section 223(c)(2)(C)
of the federal Internal Revenue Code, in which case the requirements of this
paragraph applies regardless of whether the minimum deductible under Section
223 has been satisfied.
    (D)  Subsection
(C) does not apply to a prescription drug for which there is a medically
appropriate generic equivalent, unless the enrollee has obtained access to the
brand name prescription drug through prior authorization, a step therapy
protocol, the insurer's exceptions and appeals process, or as specified in Section
39-24-30 (A).
    (E) A
pharmacy benefit manager may not directly or indirectly set, alter, implement,
or condition the terms of health plan coverage, including the benefit design,
based in part or entirely on information about the availability or amount of
financial or product assistance available for a prescription drug.
    (F) This
section applies with respect to health plans that are entered into, amended,
extended, or renewed on or after January 1, 2026.
    (G) In
implementing the requirements of this section, the State only may regulate an
insurer, health plan, or pharmacy benefit manager to the extent permissible
under applicable law.
    (H) The
director or his designee may promulgate rules and regulations as it deems
necessary to implement this section.
SECTION 3.  This act takes effect upon approval
by the Governor.
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This web page was last updated on February 06, 2025 at 11:20 AM