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.