By Van de Putte H.B. No. 2529
76R7198 DLF-F
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.
5-15 (b) The commissioner by rule shall adopt a standard form for
5-16 the identification card. At minimum, the standard form
5-17 identification card must include:
5-18 (1) the name or logo of the insurer or plan;
5-19 (2) the bank identification number of the insurer or
5-20 plan;
5-21 (3) the group number applicable for the individual;
5-22 (4) the expiration date of the coverage evidenced by
5-23 the card; and
5-24 (5) a telephone number to be used to contact an
5-25 appropriate person to obtain information relating to the pharmacy
5-26 benefits provided under the coverage.
5-27 SECTION 3. Section 24, Article 21.07-6, Insurance Code, is
6-1 amended to read as follows:
6-2 Sec. 24. APPLICATION TO CERTAIN INSURERS AND HEALTH
6-3 MAINTENANCE ORGANIZATIONS; APPLICATION TO PHARMACY BENEFIT
6-4 MANAGEMENT. (a) An insurer or health maintenance organization
6-5 that is not exempt under Section 1(1)(C) or (D) of this article is
6-6 subject to all provisions of this article, except Sections 3, 4, 5,
6-7 10, and 20(a)(1).
6-8 (b) An insurer or health maintenance organization, and any
6-9 subsidiary, division, affiliate, or agent of the insurer or health
6-10 maintenance organization, that acts as an administrator with
6-11 respect to pharmacy benefits shall comply with this article. The
6-12 exemptions granted to an insurer or health maintenance organization
6-13 under Section 1(1)(C) or (D) of this article do not apply to the
6-14 extent the insurer or health maintenance organization, or any
6-15 subsidiary, division, affiliate, or agent of the insurer or health
6-16 maintenance organization, acts as an administrator with respect to
6-17 pharmacy benefits.
6-18 SECTION 4. This Act takes effect September 1, 1999.
6-19 SECTION 5. (a) This Act applies only to a person acting as
6-20 an administrator, as that term is defined by Section 1(1), Article
6-21 21.07-6, Insurance Code, as amended by this Act, with respect to
6-22 pharmacy benefits on or after January 1, 2000. A person acting as
6-23 an administrator with respect to pharmacy benefits before January
6-24 1, 2000, is governed by the law as it existed immediately before
6-25 the effective date of this Act and that law is continued in effect
6-26 for that purpose.
6-27 (b) An administrator is not required to provide an
7-1 identification card to an individual, as required by Section 19A,
7-2 Article 21.07-6, Insurance Code, as added by this Act, before
7-3 January 1, 2000.
7-4 SECTION 6. The importance of this legislation and the
7-5 crowded condition of the calendars in both houses create an
7-6 emergency and an imperative public necessity that the
7-7 constitutional rule requiring bills to be read on three several
7-8 days in each house be suspended, and this rule is hereby suspended.