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Self-Insured Plan; Caps on Drugs
Jun 2, 2001

Can an employer who has a self-insured health plan exclude certain kinds of conditions or put a cap on prescription drugs to treat HIV? I seem to recall that I have read that employers are able to do this in self-insured plans. However, isn't this a violation of the ADA (because this type of action is deemed to be discrimination against the employer in the context of his benefits?)

If this is permissible, then why don't self-insurance plans simply drop the most expensive prescription drugs, like HIV drugs?

Response from Ms. Franzoi

Medical plans are not required to offer prescription drug coverage, unless they are insured plans and the coverage is required by state insurance law. Self-insured plans can put a cap on prescription drugs, including drugs related to a specific illness. Most employers who offer self-insured plans do not do this to avoid offering good health care coverage. They do this to avoid having different plan provisions in every state because each state has its own state insurance laws with different coverage requirements. It is a way for a multi-state company to have the same plan in every state. It also eliminates some of the cost for insurance such as retention, state premium taxes, etc. That is why most plans cover prescription drugs and do not put caps on the amount of coverage.



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