Issued by: Centers for Medicare & Medicaid Services (CMS)

Issue Date: March 24, 2016

Program Area: CSR Reconciliation (CSR)

Question: Are non-formulary drugs considered Essential Health Benefits (EHB)?

Answer: As stated in the Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation Final Rule (78 FR 12834; February 25, 2013), plans are permitted to go beyond the number of drugs offered by the benchmark without exceeding EHB. Specifically, as discussed in the HHS Notice of Benefit and Payment Parameters for 2016 Final Rule (80 FR 10750; February 27, 2015) under 45 CFR 156.122(c), a health plan providing essential health benefits must have processes in place that allow an enrollee to request and gain access to clinically appropriate drugs not otherwise covered by the health plan and in the event that an exception request is granted, the plan must treat the excepted drug(s) as an essential health benefit, including by counting any cost-sharing towards the plan's annual limitation on cost-sharing. In such cases, non-formulary drugs are also eligible for cost-sharing reduction reimbursement.

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