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.