Michigan Oral Chemotherapy Coverage Law: What Employers Need to Know
A 250 dollar cap on cost sharing for oral cancer drugs, adjusted each year, for insured plans issued or renewed after 2025.
What The Law Does
Oral cancer drugs cannot carry steeper cost sharing than infused ones.
Public Act 170 Of 2023
The Act added section 3406ff to the Michigan Insurance Code, MCL 500.3406ff. Counsel can confirm how the law applies to a given policy, since insured plans and self-funded plans are treated differently. Employers should read the law’s summary as a starting point, not a complete legal analysis.
Oral Anticancer Medication
It covers prescribed oral antineoplastic medications, the pills that treat cancer. Many patients take these drugs at home, so the pharmacy benefit often handles them. How a plan pays for them has historically differed from infusion treatment given in a clinic, which is the reason the law was written.
Plans With Both Kinds Of Coverage
It applies to health policies that cover both oral and intravenous or injected anticancer drugs. Plans that cover only one form, or none, are outside this particular rule, so employers should confirm what their policy includes. The carrier can explain how the policy covers both oral and infused anticancer drugs.
When It Applies
The Act took effect February 13, 2024 and applies to policies delivered, issued or renewed in Michigan after December 31, 2025. A plan renewing earlier in a year may fall under the rule at a different time than one that renews later, so employers should check their own renewal date. The carrier can confirm when the change applies to the policy.
Why It Exists
Oral and infused drugs are often covered under different parts of the plan with very different cost sharing. A patient might owe a small copay for an infused drug in a clinic but a much higher amount for a pill at the pharmacy. The law aims to narrow that gap so the form of the drug matters less.
Insured Plans
It is a state insurance law, so it applies to insured plans. Self-funded plans are generally governed by federal law instead, so state mandates like this one usually do not apply to them. Employers with self-funded plans should confirm their position with counsel or their administrator.
Two Ways To Comply
The insurer chooses one of two paths.
Path One: Parity
Cost sharing for oral anticancer drugs is no more restrictive than for intravenous or injected anticancer drugs. In practice, a carrier compares what a patient pays for each kind of drug and adjusts the oral side if needed. Employers can ask for the comparison in writing to see how the policy meets this test.
Path Two: A Dollar Cap
Copay or coinsurance does not exceed 250 dollars per 30-day supply. The cap is a limit on what the patient pays, not the price of the drug, and the plan may cover the remainder. Employers should ask how the carrier applies the cap when drugs are dispensed in different amounts.
Annual Adjustment
Beginning January 1, 2026, and every January 1 after, the cap is adjusted using the prescription drug index of the medical care component of the consumer price index. Because the cap moves with an index, the amount a member sees can change each January, so benefit summaries should be updated. Employers should check the current figure before communicating it to employees.
Per 30-Day Supply
The cap is measured per 30-day supply of the drug. If a prescription is for a different supply length, the cap is measured against the 30-day supply, so a longer fill may involve a larger amount. Ask the carrier how it handles fills of different lengths.
Check Your Current Figure
The cap changes each year, so ask your carrier for the figure that applies to your policy. Ask for the figure in writing and keep it with the policy documents, so HR can answer employee questions accurately. A quick check each renewal makes sure the benefit materials match the current amount.
What Insurers Can And Cannot Do
The Act bars workarounds but leaves utilization management in place.
No Circumvention
An insurer cannot comply by raising other cost sharing, reclassifying anticancer benefits or adding stricter treatment limits. The rule is meant to prevent a plan from meeting the letter of the law while undermining it in practice. Employers who notice unusual changes to cancer drug benefits should ask the carrier to explain them.
Prior Authorization Allowed
Prior authorization remains permitted. That means a patient may still need approval before the plan covers a drug, even when the cap or parity rule applies. Employees should ask their doctor’s office to submit approval requests early, which helps avoid delays in starting or continuing treatment.
Step Therapy Allowed
Step therapy remains permitted. Under step therapy, a plan may ask a patient to try a different drug first. Doctors and patients can usually ask for an exception where there is a medical reason, so employees should ask the plan about its process.
Quantity And Supply Limits
Limits on quantity dispensed and days supply per fill remain permitted. The law addresses what a patient pays, not how much of a drug can be dispensed at once. Employers should ask the carrier how its limits work, so employees know what to expect when they fill a prescription.
Appeals Still Matter
Employees who face a denial should use the plan appeal process. An appeal can resolve a denial based on missing paperwork or a misunderstanding. HR can help by explaining where the process is described and by reminding employees to keep copies of letters and prescriptions.
What Employers Can Do
Practical steps for plan sponsors.
Check Your Renewal Date
The law applies to policies issued or renewed after 2025, so confirm when yours took effect. Plans renew on different dates, so the change may not apply to every group at the same time. Looking at the policy’s effective date and asking the carrier in writing gives a clear answer for your group.
Ask How The Carrier Complies
Ask whether the carrier uses parity or the dollar cap. The carrier’s answer shows which test the policy meets and how members will experience it. Ask for an example of what a member would pay, and keep the response with your renewal documents.
Review The Drug List
Look at specialty tiers and authorization rules for oral oncology drugs. Specialty tiers and approval rules can affect what a member pays and how quickly treatment begins, even when the law’s cap is met. Ask the carrier to show where these drugs fall in the formulary.
HSA Plans
If you offer an HSA-qualified high deductible plan, ask your carrier how the law interacts with the plan design. The IRS rules on high deductible plans and preventive care are separate from state law, so the two need to be read together. The carrier and a tax adviser can explain how a given plan design is treated.
Self-Funded Plans
The law does not reach self-funded plans, so decide deliberately what your plan covers. See our pharmacy benefit guide.
What Employers Ask About The Oral Chemotherapy Law
Short answers to common questions.
Does it apply to self-funded plans?
No. It is a state insurance law and applies to insured plans.
What is the cap?
250 dollars per 30-day supply as the starting figure, adjusted each January 1 beginning in 2026.
When does it apply to our plan?
To policies delivered, issued or renewed in Michigan after December 31, 2025.
Can the carrier still require prior authorization?
Yes. Prior authorization, step therapy and quantity limits remain allowed.
Does it apply if we only cover oral drugs?
It applies to policies that cover both oral and intravenous or injected anticancer drugs.
What if our carrier uses parity instead of a cap?
Either path complies. Ask which one your policy uses.
Has it been amended?
The section was enacted by Public Act 170 of 2023. Confirm current text with counsel.
Who should we ask?
Your carrier and benefits advisor.
Is this legal advice?
No. This page is general information, not legal advice. Rules change and facts differ, so confirm your situation with your attorney or tax advisor.
Related Guides
Related reading: Michigan benefits compliance · Prior authorization law · Pharmacy benefit consulting · Group health insurance
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