A new Montana law limits how insurers can delay coverage of certain cancer medications—and it may affect your group health plan.
Most Montana child care owners don't realize that a bill focused on cancer insurance just created a new requirement for any business that sponsors a group health plan for employees.
SB422, which generally revises laws relating to insurance coverage for cancer, contains a provision (Section 1, Page 1) that prohibits insurers from requiring step therapy—also called fail-first protocols—before covering FDA-approved advanced cancer drugs that align with National Comprehensive Cancer Network (NCCN) guidelines.
Step therapy is a cost-control tool insurers use. It requires patients to try and fail on cheaper or less intensive treatments before the insurer will cover a more expensive medication. For advanced or metastatic cancer, this delay can be medically significant.
Under SB422, insurers can no longer impose this requirement for advanced cancer drugs that are FDA-approved and consistent with NCCN treatment guidelines. If an oncologist prescribes such a drug, the insurer must cover it without forcing the patient through a step-therapy process first.
If your child care business sponsors a group health insurance plan for employees—whether you have two staff members or twenty—this law applies to your plan. You don't choose whether to comply; your insurer must comply, and your plan documents may need updating to reflect this change.
Self-insured plans (where the employer bears the financial risk rather than purchasing traditional insurance) are also subject to this requirement under Montana law.
First, understand that this is not optional. When SB422 takes effect, your group health plan cannot include step-therapy requirements for qualifying advanced cancer drugs, regardless of what your current plan documents say.
Second, expect potential cost implications. Removing step-therapy barriers may increase utilization of higher-cost medications, which could affect your plan's premiums or out-of-pocket costs. Some businesses may see modest increases; others may see none, depending on claims experience and plan design.
Third, contact your insurance broker or plan administrator to confirm your plan complies. They should be able to tell you whether amendments are needed and what, if any, cost impact to expect.
The law was enrolled during the 2025 Montana legislative session. No explicit effective date is stated in the bill text, so clarify the implementation timeline with your insurer or broker—this affects when you need to have your plan in compliance.
SB422 reflects a policy choice that advanced cancer patients should not face delays in accessing FDA-approved drugs their doctors recommend. For child care business owners, it means one more compliance detail to track, but it's straightforward: step therapy cannot be a barrier for these medications.
For a free, business-specific summary of how this law applies to your group health plan, contact your insurance broker or the Montana Association of Health Underwriters.