RS C.S.H.B. 3175 75(R) BILL ANALYSIS INSURANCE C.S.H.B. 3175 By: Van de Putte 4-15-97 Committee Report (Substituted) BACKGROUND During the last legislative session SB 628 passed and expanded, from preferred providers organizations to health maintenance organizations, the requirement that those entities contract with pharmacies that are qualified, and meet the terms and conditions of the contract to provide pharmaceutical services for those organizations. In a court challenge to the statute questions were raised relating to whether the measure pre-empted the federal Employee Retirement Income Security Act. While there was language in the measure that specifically stated the intention of the measure did not pre-empt ERISA, further clarification is necessary for the courts to further the implementation of the statute. PURPOSE H.B. 3175 removes from statute language that has been interpreted to pre-empt ERISA. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Article 21.52B of the Insurance Code. Sec. 1. DEFINITIONS. Amends the definition of "health insurance policy" and changes it to "Health benefit plan." Also defines "Phamaceutical service," "Pharmacist," "Pharmacy," "Drugs," and "Prescription drugs." Deletes definition of "Managed care plan." Sec. 2. Removes references to managed care plans from (a), (b), and (c). Sec. 3. Removes references to managed care plans. Sec. 4. Removes references to managed care plans. Sec. 5. Clarifies that this section does not apply to plans regulated by Employee Retirement Income Security Act of 1974. Sec. 6. Adds severability clause so that if any section of this act is declared invalid, the other provisions will remain intact. SECTION 2. Repeals Section 3, Chapter 182, Acts of the 72nd Legislature, Regular Session. SECTION 3. EFFECTIVE DATE - This act takes effect on September 1, 1997 and applies to policies issued or enacted on or after January 1, 1998. SECTION 4. EMERGENCY CLAUSE COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3175 redefines "insurance policy" as a "health benefit plan" which is regulated under Chapter 20A of the Texas Insurance Code and deletes the former definition of "managed care plan" in an effort to clarify that the measure only affects those plans that are regulated by the Department of Insurance. The Committee Substitute also includes a clarified clause of severability on page 4, Section 6 that clarifies the 5th Circuit Courts interpretation of the statute.