Updated October 21, 2026. Tennessee SB 420 / HB 870 did not pass. The 114th General Assembly adjourned in April 2026 with the House bill waiting on a floor vote and the Senate bill in a committee subcommittee. This page stays up as a record of the proposal. A similar bill would have to be filed again in the 115th General Assembly, which convenes in January 2027.
What did SB 420 and HB 870 propose?
SB 420 and HB 870 proposed replacing Tennessee’s copay assistance law so that help from manufacturers and others counts toward a member’s deductible and out-of-pocket maximum in more cases. Tennessee employers watching where their pharmacy dollars go had a reason to follow SB 420 (Sen. Shane Reeves) and HB 870 (Rep. Pat Rudder), filed in early 2025. The bill would have deleted and replaced the state’s existing copay assistance law, Tennessee Code section 56-7-3205, and made four changes:
- Count help from others. Insurers would include cost sharing paid by the member “or on behalf of the enrollee by another person” when applying deductibles and out-of-pocket maximums. That includes manufacturer copay cards and assistance programs.
- Handle HSA plans. For HSA-qualified high deductible plans, outside help would count only after the member met the federal minimum deductible, except for preventive care. That protects the member’s HSA eligibility.
- Apply the federal cap broadly. The federal annual limit on cost sharing would apply to all covered services under insured plans in Tennessee.
- Bar assistance-based design. Insurers, pharmacy benefit managers and third-party administrators could not set or change plan coverage, including benefit design, based on whether drug manufacturer assistance is available.
The bill kept the existing exception for brand drugs with a generic alternative, unless the member reached the brand through prior authorization, step therapy or an exception process. It would have applied to plans issued, amended or renewed on or after January 1, 2026.
How far did the bill get?
The House bill cleared committee in March 2025, and the Senate bill never left committee before the General Assembly adjourned in April 2026.
| Date | Action |
|---|---|
| January 28, 2025 | SB 420 filed |
| February 4, 2025 | HB 870 filed |
| March 19, 2025 | House Insurance Subcommittee recommends passage, 6 to 0 |
| March 25, 2025 | House Insurance Committee recommends passage, 17 to 0, and sends it to Calendar & Rules |
| March 26, 2025 | Senate Commerce & Labor action deferred to 2026 |
| March 2026 | Senate action deferred again, twice |
| April 7, 2026 | SB 420 assigned to the General Subcommittee of Senate Commerce & Labor |
| April 2026 | General Assembly adjourns; neither bill passed |
What does Tennessee law already require?
Tennessee already requires insurers to count copay assistance toward a member’s cost sharing, under a 2021 law. The original version of this post treated counting copay assistance as new. It is not. Tennessee passed HB 619 in 2021 as Public Chapter 405, signed May 18, 2021 and effective July 1, 2021. It already requires insurers to count amounts paid by or on behalf of the member toward copays, coinsurance, deductibles and the out-of-pocket maximum, with the same generic drug exception. SB 420 / HB 870 would have extended that rule to HSA plans, named PBMs and TPAs, and added the ban on assistance-based plan design. A similar 2024 bill, SB 2008 / HB 2170, also stalled before a floor vote.
What does copay assistance mean for members?
Counting copay assistance helps members reach their out-of-pocket maximum sooner. Copay assistance often covers most of a specialty drug’s cost, but some plans count only what the member pays out of pocket. A simple example:
| Monthly specialty drug | Assistance not counted | Assistance counted |
|---|---|---|
| Drug cost to the plan | $1,000 | $1,000 |
| Paid by manufacturer copay card | $950 | $950 |
| Paid by the member | $50 | $50 |
| Credited to deductible and out-of-pocket maximum | $50 | $1,000 |
| When the member reaches the maximum | Later, or not at all | Sooner |
When assistance counts, members reach their out-of-pocket maximum sooner and the plan picks up more of the remaining claims. When it does not, the card can run out midyear and leave the member facing the full cost sharing.
Would the bill have applied to self-funded plans?
Generally no. The bill was written for insurers, which Tennessee regulates. Self-funded ERISA plans are generally outside its reach: ERISA section 514(b)(2)(B), the deemer clause, keeps a state from treating an employee benefit plan as an insurer. The bill also limited itself to regulating insurers, PBMs and TPAs “to the extent permissible under applicable law.”
For a self-funded employer, copay assistance policy is a plan design and PBM contract decision. Accumulator and maximizer programs, which keep assistance from counting or route members through a vendor to capture it, are usually PBM offerings. Employers should know which one their plan uses, what it saves, and what it costs members when a card runs out. Federal PBM reform, now law, will show more of this in PBM reporting. See PBM reform.
Fully insured employers in Tennessee are covered by the 2021 law today. If a version of SB 420 returns in 2027, it would change their plans first. Ethos Benefits tracks state and federal rules like this through its compliance service.