76R10507 DLF-F
By Van de Putte, Pitts, Pickett H.B. No. 2529
Substitute the following for H.B. No. 2529:
By Thompson C.S.H.B. No. 2529
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the administration of pharmacy benefits under certain
1-3 health benefit plans.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1(1), Article 21.07-6, Insurance Code, is
1-6 amended to read as follows:
1-7 (1) "Administrator" means a person who collects
1-8 premiums or contributions from or who adjusts or settles claims in
1-9 connection with life, health, and accident benefits, including
1-10 pharmacy benefits, or annuities for residents of this state but
1-11 does not include:
1-12 (A) an employer on behalf of its employees or
1-13 the employees of one or more subsidiaries or affiliated
1-14 corporations of the employer;
1-15 (B) a union on behalf of its members;
1-16 (C) an insurance company or a group hospital
1-17 service corporation subject to Chapter 20 of this code with respect
1-18 to a policy lawfully issued and delivered by it in and under the
1-19 law of a state in which the insurer was authorized to do an
1-20 insurance business;
1-21 (D) a health maintenance organization that is
1-22 authorized to operate in this state under the Texas Health
1-23 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
1-24 Code), with respect to any activity that is specifically regulated
2-1 under that Act;
2-2 (E) an agent licensed under Article 21.07 or
2-3 Chapter 213, Acts of the 54th Legislature, Regular Session, 1955
2-4 (Article 21.07-1, Vernon's Texas Insurance Code), who is acting
2-5 under appointment on behalf of an insurance company authorized to
2-6 do business in this state and within the customary scope and duties
2-7 of the insurance agent's authority as an agent and who receives
2-8 commissions as an agent;
2-9 (F) a creditor who is acting on behalf of its
2-10 debtors with respect to insurance that covers a debt between the
2-11 creditor and its debtor so long as only the functions of a group
2-12 policyholder or creditor are performed;
2-13 (G) a trust established in conformity with 29
2-14 U.S.C. Section 186 and the trustees and employees who are acting
2-15 under the trust;
2-16 (H) a trust that is exempt from taxation under
2-17 Section 501(a) of the Internal Revenue Code of 1986 and the
2-18 trustees and employees acting under the trust, or a custodian and
2-19 the custodian's agents and employees who are acting pursuant to a
2-20 custodian account that complies with Section 401(f), Internal
2-21 Revenue Code of 1986;
2-22 (I) a bank, credit union, savings and loan
2-23 association, or other financial institution that is subject to
2-24 supervision or examination under federal or state law by federal or
2-25 state regulatory authorities so long as that institution is
2-26 performing only those functions for which it holds a license under
2-27 federal or state law;
3-1 (J) a company that advances and collects a
3-2 premium or charge from its credit card holders on their
3-3 authorization, if the company does not adjust or settle claims and
3-4 acts only in the company's debtor-creditor relationship with its
3-5 credit card holders;
3-6 (K) a person who adjusts or settles claims in
3-7 the normal course of his practice or employment as a licensed
3-8 attorney and who does not collect any premium or charge in
3-9 connection with life, health, or accident benefits, including
3-10 pharmacy benefits, or annuities;
3-11 (L) an adjuster licensed by the commissioner, if
3-12 the adjuster is engaged in the performance of his powers and duties
3-13 as an adjuster within the scope of his license;
3-14 (M) a person who provides technical, advisory,
3-15 utilization review, precertification, or consulting services to an
3-16 insurer, plan, or plan sponsor and who does not make any management
3-17 or discretionary decisions on behalf of an insurer, plan, or plan
3-18 sponsor;
3-19 (N) an attorney in fact for a Lloyd's operating
3-20 under Chapter 18 of this code or a reciprocal or interinsurance
3-21 exchange operating under Chapter 19 of this code if acting in the
3-22 capacity of attorney in fact under the applicable chapter;
3-23 (O) a municipality that is self-insured or a
3-24 joint fund, risk management pool, or a self-insurance pool composed
3-25 of political subdivisions of this state that participate in a fund
3-26 or pool through interlocal agreements and any nonprofit
3-27 administrative agency or governing body or any nonprofit entity
4-1 that acts solely on behalf of a fund, pool, agency, or body or any
4-2 other funds, pools, agencies, or bodies that are established
4-3 pursuant to or for the purpose of implementing an interlocal
4-4 governmental agreement;
4-5 (P) a self-insured political subdivision;
4-6 (Q) a plan under which insurance benefits are
4-7 provided exclusively by a carrier licensed to do business in this
4-8 state and the administrator of the plan is either:
4-9 (i) a full-time employee of the plan's
4-10 organizing or sponsoring association, trust, or other entity; or
4-11 (ii) the trustee or trustees of the
4-12 organizing or sponsoring trust; or
4-13 (R) a parent of a wholly owned direct or
4-14 indirect subsidiary insurer licensed to do business in this state
4-15 or a wholly owned direct or indirect subsidiary insurer that is a
4-16 part of the parent's holding company system that, only on behalf of
4-17 itself or its affiliated insurers:
4-18 (i) collects premiums or contributions, if
4-19 the parent or subsidiary insurer prepares only billing statements,
4-20 places those statements in the United States mail, and causes all
4-21 collected premiums to be deposited directly in a depository account
4-22 of the particular affiliated insurer, and the services rendered by
4-23 the parent or subsidiary are performed under an agreement regulated
4-24 and approved under Article 21.49-1 of this code or a similar
4-25 statute of the domiciliary state if the parent or subsidiary is a
4-26 foreign insurer doing business in this state; or
4-27 (ii) furnishes proof-of-loss forms,
5-1 reviews claims, determines the amount of the liability for those
5-2 claims, and negotiates settlements, but pays claims only from the
5-3 funds of the particular subsidiary by checks or drafts of that
5-4 subsidiary and the services rendered by the parent or subsidiary
5-5 are performed under an agreement regulated and approved under
5-6 Article 21.49-1 of this code or a similar statute of the
5-7 domiciliary state if the parent or subsidiary is a foreign insurer
5-8 doing business in this state.
5-9 SECTION 2. Article 21.07-6, Insurance Code, is amended by
5-10 adding Section 19A to read as follows:
5-11 Sec. 19A. IDENTIFICATION CARDS FOR CERTAIN PLANS. (a) An
5-12 administrator for a plan that provides pharmacy benefits shall
5-13 issue an identification card to each individual covered by the
5-14 plan who is at least 17 years of age.
5-15 (b) The commissioner by rule shall adopt standard
5-16 information to be included on the identification card. At minimum,
5-17 the standard form identification card must include:
5-18 (1) the name or logo of the entity that is
5-19 administering the pharmacy benefits;
5-20 (2) the International Identification Number that is
5-21 assigned by the American National Standards Institute for the
5-22 entity that is administering the pharmacy benefits;
5-23 (3) the group number applicable for the individual;
5-24 (4) the expiration date of the coverage evidenced by
5-25 the card; and
5-26 (5) a telephone number to be used to contact an
5-27 appropriate person to obtain information relating to the pharmacy
6-1 benefits provided under the coverage.
6-2 (c) An administrator for a plan that provides pharmacy
6-3 benefits shall issue to an individual an identification card not
6-4 later than the 30th day after the date the administrator receives
6-5 notice that the individual is eligible for the benefits.
6-6 SECTION 3. Subchapter E, Chapter 21, Insurance Code, is
6-7 amended by adding Article 21.53L to read as follows:
6-8 Art. 21.53L. PHARMACY BENEFIT CARDS
6-9 Sec. 1. DEFINITION. In this article, "health benefit plan"
6-10 means a health benefit plan described by Section 2 of this article.
6-11 Sec. 2. SCOPE OF ARTICLE. (a) This article applies only to
6-12 a health benefit plan that provides benefits for medical or
6-13 surgical expenses incurred as a result of a health condition,
6-14 accident, or sickness, including an individual, group, blanket, or
6-15 franchise insurance policy or insurance agreement, a group hospital
6-16 service contract, or an individual or group evidence of coverage or
6-17 similar coverage document that is offered by:
6-18 (1) an insurance company;
6-19 (2) a group hospital service corporation operating
6-20 under Chapter 20 of this code;
6-21 (3) a fraternal benefit society operating under
6-22 Chapter 10 of this code;
6-23 (4) a stipulated premium insurance company operating
6-24 under Chapter 22 of this code;
6-25 (5) a reciprocal exchange operating under Chapter 19
6-26 of this code;
6-27 (6) a health maintenance organization operating under
7-1 the Texas Health Maintenance Organization Act (Chapter 20A,
7-2 Vernon's Texas Insurance Code);
7-3 (7) a multiple employer welfare arrangement that holds
7-4 a certificate of authority under Article 3.95-2 of this code; or
7-5 (8) an approved nonprofit health corporation that
7-6 holds a certificate of authority issued by the commissioner under
7-7 Article 21.52F of this code.
7-8 (b) This article does not apply to:
7-9 (1) a plan that provides coverage:
7-10 (A) only for a specified disease or other
7-11 limited benefit;
7-12 (B) only for accidental death or dismemberment;
7-13 (C) for wages or payments in lieu of wages for a
7-14 period during which an employee is absent from work because of
7-15 sickness or injury;
7-16 (D) as a supplement to liability insurance;
7-17 (E) for credit insurance;
7-18 (F) only for dental or vision care;
7-19 (G) only for hospital expenses; or
7-20 (H) only for indemnity for hospital confinement;
7-21 (2) a small employer health benefit plan written under
7-22 Chapter 26 of this code;
7-23 (3) a Medicare supplemental policy as defined by
7-24 Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
7-25 (4) workers' compensation insurance coverage;
7-26 (5) medical payment insurance coverage issued as part
7-27 of a motor vehicle insurance policy; or
8-1 (6) a long-term care policy, including a nursing home
8-2 fixed indemnity policy, unless the commissioner determines that the
8-3 policy provides benefit coverage so comprehensive that the policy
8-4 is a health benefit plan as described by Subsection (a) of this
8-5 section.
8-6 Sec. 3. IDENTIFICATION CARD; PHARMACY BENEFITS. (a) A
8-7 health benefit plan that provides pharmacy benefits for enrollees
8-8 in the plan shall include on the identification card of each
8-9 enrollee:
8-10 (1) the name or logo of the entity that is
8-11 administering the pharmacy benefits, if different from the health
8-12 benefit plan;
8-13 (2) the International Identification Number that is
8-14 assigned by the American National Standards Institute for the
8-15 entity that is administering the pharmacy benefits;
8-16 (3) the group number applicable to the individual;
8-17 (4) the expiration date of the coverage evidenced by
8-18 the card; and
8-19 (5) a telephone number to be used to contact an
8-20 appropriate person to obtain information relating to the pharmacy
8-21 benefits provided under the coverage.
8-22 (b) This section does not require a health benefit plan that
8-23 administers its own pharmacy benefits to issue an identification
8-24 card separate from any identification card issued to an enrollee to
8-25 evidence coverage under the health benefit plan, if the
8-26 identification card contains the elements required by Subsection
8-27 (a) of this section.
9-1 SECTION 4. This Act takes effect September 1, 1999.
9-2 SECTION 5. (a) This Act applies only to a person acting as
9-3 an administrator, as that term is defined by Section 1(1), Article
9-4 21.07-6, Insurance Code, as amended by this Act, with respect to
9-5 pharmacy benefits on or after January 1, 2000. A person acting as
9-6 an administrator with respect to pharmacy benefits before January
9-7 1, 2000, is governed by the law as it existed immediately before
9-8 the effective date of this Act and that law is continued in effect
9-9 for that purpose.
9-10 (b) An administrator, as that term is defined by Section 1,
9-11 Article 21.07-6, Insurance Code, as amended by this Act, is not
9-12 required to issue a new identification card to an individual, as
9-13 required by Section 19A, Article 21.07-6, Insurance Code, as added
9-14 by this Act, if the identification card held by the individual on
9-15 the effective date of this Act contains the elements described by
9-16 Sections 19A(b)(2)-(5), Article 21.07-6, Insurance Code, as added
9-17 by this Act. A new card complying with Section 19A, Article
9-18 21.07-6, Insurance Code, as added by this Act, must be issued at
9-19 the time the individual's coverage is modified.
9-20 (c) A health benefit plan, as that term is defined by
9-21 Section 1, Article 21.53L, Insurance Code, as added by this Act, is
9-22 not required to issue a new identification card to an enrollee, as
9-23 required by Section 3, Article 21.53L, Insurance Code, as added by
9-24 this Act, if the identification card held by the enrollee on the
9-25 effective date of this Act contains the elements described by
9-26 Sections 3(a)(2)-(5), Article 21.53L, Insurance Code, as added by
9-27 this Act. A new card complying with Article 21.53L, Insurance Code,
10-1 as added by this Act, must be issued at the time the enrollee's
10-2 coverage is modified.
10-3 SECTION 6. The importance of this legislation and the
10-4 crowded condition of the calendars in both houses create an
10-5 emergency and an imperative public necessity that the
10-6 constitutional rule requiring bills to be read on three several
10-7 days in each house be suspended, and this rule is hereby suspended.