OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 177 Bill Analysis
135th General Assembly
Click here for H.B. 177’s Fiscal Note
Version: As Reported by House Public Health Policy
Primary Sponsor: Rep. Manchester
Effective Date:
Abby Gerty, Research Analyst
SUMMARY
 Requires health insuring corporations and sickness and accident insurers to apply all
amounts paid by or on behalf of covered individuals toward cost-sharing requirements
for prescription drugs.
 Allows health insuring corporations and sickness and accident insurers to exclude
amounts paid on behalf of an enrollee by another person for a brand name prescription
drug where a generic version exists and the brand name is not medically necessary.
 Requires pharmacy benefit managers to comply with all cost-sharing requirements
applicable to health insuring corporations and sickness and accident insurers, including
the new requirements enacted by the bill.
 Specifies that the bill is not to be construed as requiring a health insuring corporation,
sickness and accident insurer, or pharmacy benefit manager to cover a drug that is not
already covered.
 Specifies that withdrawing coverage of a drug is not a violation of the bill’s requirements
if doing so does not violate any other existing state or federal laws or administrative
rules.
DETAILED ANALYSIS
Cost-sharing requirements
The bill imposes requirements on how certain health plan issuers apply amounts paid by
or on behalf of a covered individual towards a cost sharing requirement. Under current law,
unchanged by the bill, “cost-sharing requirement” refers to any cost to a covered individual for
health services according to any coverage limit, copayment, coinsurance, deductible, or other
November 17, 2023
Office of Research and Drafting LSC Legislative Budget Office
out-of-pocket expense requirement imposed by a health benefit plan.1 The bill applies to health
insuring corporations, sickness and accident insurers, and pharmacy benefit managers.2
Under the bill, health insuring corporations, sickness and accident insurers, and
pharmacy benefit managers must include all amounts paid by a covered individual or by
another person, group, or organization on behalf of the covered individual, when calculating
the covered individual’s contribution toward a cost-sharing requirement. For example, if a
covered individual receives a coupon for a drug which stipulates that the drug manufacturer
will pay the copayment for the drug, then, under the bill, such a payment would have to be
counted toward any cost-sharing requirement the covered individual’s health benefit plan
might impose.3
The bill exempts any payment made on behalf of an enrollee by another person, group,
or organization for a brand name drug when a generic equivalent exists, unless the prescriber
determines the brand name drug to be medically necessary.4 The bill defines “generic
equivalent” as a drug that is designated to be therapeutically equivalent, as indicated by the
U.S. Food and Drug Administration’s publication titled “Approved Drug Products with
Therapeutic Equivalence Evaluations.”5
If the bill’s cost-sharing requirement would result in an enrollee losing eligibility for the
federal income tax deduction for contributions to a health savings account (HSA), then those
requirements apply only after the enrollee has satisfied the minimum deductible required by
federal law. Federal law allows individuals enrolled in a qualified high deductible health plan to
make pre-tax contributions to a HSA to pay for medical expenses. However, the HSA deduction
is available only if the high deductible health plan has an annual deductible of at least $1,000
for self-only coverage, or $2,000 for family coverage.6 The bill’s exception for certain qualified
high deductible health plans ensures that no enrollee loses an HSA deduction as a result of the
bill’s change to cost-sharing requirements.7
However, the federal law does not require high deductible health plans to maintain a
deductible for preventative care. As such, the bill’s cost-sharing requirements apply to
qualifying preventative care items and services regardless of whether the enrollee has satisfied
the plan’s minimum deductible.8
1 R.C. 1751.68 and 3923.602, not in the bill.
2 R.C. 1751.12, 3923.811, and 3959.21.
3 R.C. 1751.12(D)(4)(a), 3923.811(B)(1), and 3959.21(B)(1).
4 R.C. 1751.12(D)(4)(b) and (H)(2), 3923.811(B)(2), and 3959.21(B)(1).
5 R.C. 1751.12(H)(2) and 3923.811(A)(2).
6 26 United States Code (U.S.C.) 223, not in the bill.
7 R.C. 1751.12(D)(4)(e)(ii), 3923.811(B)(3)(b), and 3959.21(B)(2)(b).
8 R.C. 1751.12(D)(4)(e)(ii), 3923.811(B)(3)(b), and 3959.21(B)(2)(b); 26 U.S.C. 223, not in the bill.
P a g e |2 H.B. 177
As Reported by House Public Health Policy
Office of Research and Drafting LSC Legislative Budget Office
Pharmacy benefit managers
The bill also requires a pharmacy benefit manager, in the performance of its contracted
duties, to comply with the terms of applicable cost-sharing requirements regarding the
prescribing, receipt, administration, or coverage of a prescription drug detailed in the bill and
under continuing law. Under the bill, a “pharmacy benefit manager” is any person or entity
that, pursuant to a contract or other relationship with an insurer, managed care organization,
employer, or other third party, either directly or through an intermediary, manages the
prescription drug benefit provided by the insurer, managed care organization, employer, or
third party, including any of the following:
 The processing and payment of claims for covered 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;
 The performance of any other duty directly or indirectly related to the processing or
payment of claims for covered prescription drugs.9
Interpretation and applicability
The bill includes several provisions guiding the interpretation of its requirements. First,
the bill specifies that it is not to be construed as requiring a health insuring corporation,
sickness and accident insurer, or pharmacy benefit manager to provide coverage for a
prescription drug that is not already covered under the plan. Second, a health insuring
corporation, sickness and accident insurer, or pharmacy benefit manager is not to be
considered in violation of the bill’s requirements solely for withdrawing coverage of a drug, if
the removal of coverage does not violate any other existing state or federal laws or
administrative rules.10
The bill applies to health benefit plans delivered, issued for delivery, modified, or
renewed on or after January 1, 2025.11
9 R.C. 3959.21.
10 R.C. 1751.12(D)(4)(c) and (d), 3923.811(C) and (D), and 3959.21(C) and (D).
11 Section 3.
P a g e |3 H.B. 177
As Reported by House Public Health Policy
Office of Research and Drafting LSC Legislative Budget Office
HISTORY
Action Date
Introduced 05-22-23
Referred to H. Insurance 05-23-23
Recalled to H. Rules and Reference 06-07-23
Re-referred to H. Public Health Policy 06-13-23
Reported, H. Public Health Policy 11-16-23
ANHB0177RH-135/ks
P a g e |4 H.B. 177
As Reported by House Public Health Policy