By: Nelson, Madla S.B. No. 1237
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the administration of pharmacy benefits under certain
1-2 health benefit plans.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subdivision (1), Section 1, Article 21.07-6,
1-5 Insurance Code, is amended to read as follows:
1-6 (1) "Administrator" means a person who collects
1-7 premiums or contributions from or who adjusts or settles claims in
1-8 connection with life, health, and accident benefits, including
1-9 pharmacy benefits, or annuities for residents of this state but
1-10 does not include:
1-11 (A) an employer on behalf of its employees or
1-12 the employees of one or more subsidiaries or affiliated
1-13 corporations of the employer;
1-14 (B) a union on behalf of its members;
1-15 (C) an insurance company or a group hospital
1-16 service corporation subject to Chapter 20 of this code with respect
1-17 to a policy lawfully issued and delivered by it in and under the
1-18 law of a state in which the insurer was authorized to do an
1-19 insurance business;
1-20 (D) a health maintenance organization that is
1-21 authorized to operate in this state under the Texas Health
1-22 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
1-23 Code), with respect to any activity that is specifically regulated
1-24 under that Act;
2-1 (E) an agent licensed under Article 21.07 or
2-2 Chapter 213, Acts of the 54th Legislature, Regular Session, 1955
2-3 (Article 21.07-1, Vernon's Texas Insurance Code), who is acting
2-4 under appointment on behalf of an insurance company authorized to
2-5 do business in this state and within the customary scope and duties
2-6 of the insurance agent's authority as an agent and who receives
2-7 commissions as an agent;
2-8 (F) a creditor who is acting on behalf of its
2-9 debtors with respect to insurance that covers a debt between the
2-10 creditor and its debtor so long as only the functions of a group
2-11 policyholder or creditor are performed;
2-12 (G) a trust established in conformity with 29
2-13 U.S.C. Section 186 and the trustees and employees who are acting
2-14 under the trust;
2-15 (H) a trust that is exempt from taxation under
2-16 Section 501(a) of the Internal Revenue Code of 1986 and the
2-17 trustees and employees acting under the trust, or a custodian and
2-18 the custodian's agents and employees who are acting pursuant to a
2-19 custodian account that complies with Section 401(f), Internal
2-20 Revenue Code of 1986;
2-21 (I) a bank, credit union, savings and loan
2-22 association, or other financial institution that is subject to
2-23 supervision or examination under federal or state law by federal or
2-24 state regulatory authorities so long as that institution is
2-25 performing only those functions for which it holds a license under
2-26 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
4-1 administrative agency or governing body or any nonprofit entity
4-2 that acts solely on behalf of a fund, pool, agency, or body or any
4-3 other funds, pools, agencies, or bodies that are established
4-4 pursuant to or for the purpose of implementing an interlocal
4-5 governmental agreement;
4-6 (P) a self-insured political subdivision;
4-7 (Q) a plan under which insurance benefits are
4-8 provided exclusively by a carrier licensed to do business in this
4-9 state and the administrator of the plan is either:
4-10 (i) a full-time employee of the plan's
4-11 organizing or sponsoring association, trust, or other entity; or
4-12 (ii) the trustee or trustees of the
4-13 organizing or sponsoring trust; or
4-14 (R) a parent of a wholly owned direct or
4-15 indirect subsidiary insurer licensed to do business in this state
4-16 or a wholly owned direct or indirect subsidiary insurer that is a
4-17 part of the parent's holding company system that, only on behalf of
4-18 itself or its affiliated insurers:
4-19 (i) collects premiums or contributions, if
4-20 the parent or subsidiary insurer prepares only billing statements,
4-21 places those statements in the United States mail, and causes all
4-22 collected premiums to be deposited directly in a depository account
4-23 of the particular affiliated insurer, and the services rendered by
4-24 the parent or subsidiary are performed under an agreement regulated
4-25 and approved under Article 21.49-1 of this code or a similar
4-26 statute of the domiciliary state if the parent or subsidiary is a
5-1 foreign insurer doing business in this state; or
5-2 (ii) furnishes proof-of-loss forms,
5-3 reviews claims, determines the amount of the liability for those
5-4 claims, and negotiates settlements, but pays claims only from the
5-5 funds of the particular subsidiary by checks or drafts of that
5-6 subsidiary and the services rendered by the parent or subsidiary
5-7 are performed under an agreement regulated and approved under
5-8 Article 21.49-1 of this code or a similar statute of the
5-9 domiciliary state if the parent or subsidiary is a foreign insurer
5-10 doing business in this state.
5-11 SECTION 2. Article 21.07-6, Insurance Code, is amended by
5-12 adding Section 19A to read as follows:
5-13 Sec. 19A. IDENTIFICATION CARDS FOR CERTAIN PLANS. (a) An
5-14 administrator for a plan that provides pharmacy benefits shall
5-15 issue an identification card to each individual covered by the plan
5-16 who is at least 17 years of age.
5-17 (b) The commissioner by rule shall adopt standard
5-18 information to be included on the identification card. At minimum,
5-19 the standard form identification card must include:
5-20 (1) the name or logo of the entity that is
5-21 administering the pharmacy benefits;
5-22 (2) the International Identification Number that is
5-23 assigned by the American National Standards Institute for the
5-24 entity that is administering the pharmacy benefits;
5-25 (3) the group number applicable for the individual;
5-26 (4) the effective date of the coverage evidenced by
6-1 the card; and
6-2 (5) a telephone number to be used to contact an
6-3 appropriate person to obtain information relating to the pharmacy
6-4 benefits provided under the coverage.
6-5 (c) An administrator for a plan that provides pharmacy
6-6 benefits shall issue to an individual an identification card not
6-7 later than the 30th day after the date the administrator receives
6-8 notice that the individual is eligible for the benefits.
6-9 SECTION 3. Subchapter E, Chapter 21, Insurance Code, is
6-10 amended by adding Article 21.53L to read as follows:
6-11 Art. 21.53L. PHARMACY BENEFIT CARDS
6-12 Sec. 1. DEFINITION. In this article, "health benefit plan"
6-13 means a health benefit plan described by Section 2 of this article.
6-14 Sec. 2. SCOPE OF ARTICLE. (a) This article applies only to
6-15 a health benefit plan that provides benefits for medical or
6-16 surgical expenses incurred as a result of a health condition,
6-17 accident, or sickness, including an individual, group, blanket, or
6-18 franchise insurance policy or insurance agreement, a group hospital
6-19 service contract, or an individual or group evidence of coverage or
6-20 similar coverage document that is offered by:
6-21 (1) an insurance company;
6-22 (2) a group hospital service corporation operating
6-23 under Chapter 20 of this code;
6-24 (3) a fraternal benefit society operating under
6-25 Chapter 10 of this code;
6-26 (4) a stipulated premium insurance company operating
7-1 under Chapter 22 of this code;
7-2 (5) a reciprocal exchange operating under Chapter 19
7-3 of this code;
7-4 (6) a health maintenance organization operating under
7-5 the Texas Health Maintenance Organization Act (Chapter 20A,
7-6 Vernon's Texas Insurance Code);
7-7 (7) a multiple employer welfare arrangement that holds
7-8 a certificate of authority under Article 3.95-2 of this code; or
7-9 (8) an approved nonprofit health corporation that
7-10 holds a certificate of authority issued by the commissioner under
7-11 Article 21.52F of this code.
7-12 (b) This article does not apply to:
7-13 (1) a plan that provides coverage:
7-14 (A) only for a specified disease or other
7-15 limited benefit;
7-16 (B) only for accidental death or dismemberment;
7-17 (C) for wages or payments in lieu of wages for a
7-18 period during which an employee is absent from work because of
7-19 sickness or injury;
7-20 (D) as a supplement to liability insurance;
7-21 (E) for credit insurance;
7-22 (F) only for dental or vision care;
7-23 (G) only for hospital expenses; or
7-24 (H) only for indemnity for hospital confinement;
7-25 (2) a small employer health benefit plan written under
7-26 Chapter 26 of this code;
8-1 (3) a Medicare supplemental policy as defined by
8-2 Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
8-3 (4) workers' compensation insurance coverage;
8-4 (5) medical payment insurance coverage issued as part
8-5 of a motor vehicle insurance policy; or
8-6 (6) a long-term care policy, including a nursing home
8-7 fixed indemnity policy, unless the commissioner determines that the
8-8 policy provides benefit coverage so comprehensive that the policy
8-9 is a health benefit plan as described by Subsection (a) of this
8-10 section.
8-11 Sec. 3. IDENTIFICATION CARD; PHARMACY BENEFITS. (a) A
8-12 health benefit plan that provides pharmacy benefits for enrollees
8-13 in the plan shall include on the identification card of each
8-14 enrollee:
8-15 (1) the name or logo of the entity that is
8-16 administering the pharmacy benefits, if different from the health
8-17 benefit plan;
8-18 (2) the group number applicable to the individual;
8-19 (3) the effective date of the coverage evidenced by
8-20 the card; and
8-21 (4) a telephone number to be used to contact an
8-22 appropriate person to obtain information relating to the pharmacy
8-23 benefits provided under the coverage.
8-24 (b) This section does not require a health benefit plan that
8-25 administers its own pharmacy benefits to issue an identification
8-26 card separate from any identification card issued to an enrollee to
9-1 evidence coverage under the health benefit plan, if the
9-2 identification card contains the elements required by Subsection
9-3 (a) of this section.
9-4 SECTION 4. This Act takes effect September 1, 1999.
9-5 SECTION 5. (a) This Act applies only to a person acting as
9-6 an administrator, as that term is defined by Subdivision (1),
9-7 Section 1, Article 21.07-6, Insurance Code, as amended by this Act,
9-8 with respect to pharmacy benefits on or after January 1, 2000. A
9-9 person acting as an administrator with respect to pharmacy
9-10 benefits before January 1, 2000, is governed by the law as it
9-11 existed immediately before the effective date of this Act and that
9-12 law is continued in effect for that purpose.
9-13 (b) An administrator, as that term is defined by Subdivision
9-14 (1), Section 1, Article 21.07-6, Insurance Code, as amended by this
9-15 Act, is not required to issue a new identification card to an
9-16 individual, as required by Section 19A, Article 21.07-6, Insurance
9-17 Code, as added by this Act, if the identification card held by the
9-18 individual on the effective date of this Act contains the elements
9-19 described by Subdivisions (2) through (5), Subsection (b), Section
9-20 19A, Article 21.07-6, Insurance Code, as added by this Act. A new
9-21 card complying with Section 19A, Article 21.07-6, Insurance Code,
9-22 as added by this Act, must be issued at the time the individual's
9-23 coverage is modified.
9-24 (c) A health benefit plan, as that term is defined by
9-25 Section 1, Article 21.53L, Insurance Code, as added by this Act, is
9-26 not required to issue a new identification card to an enrollee, as
10-1 required by Section 3, Article 21.53L, Insurance Code, as added by
10-2 this Act, if the identification card held by the enrollee on the
10-3 effective date of this Act contains the elements described by
10-4 Subdivisions (2), (3), and (4), Subsection (a), Section 3, Article
10-5 21.53L, Insurance Code, as added by this Act. A new card complying
10-6 with Article 21.53L, Insurance Code, as added by this Act, must be
10-7 issued at the time the enrollee's coverage is modified.
10-8 SECTION 6. The importance of this legislation and the
10-9 crowded condition of the calendars in both houses create an
10-10 emergency and an imperative public necessity that the
10-11 constitutional rule requiring bills to be read on three several
10-12 days in each house be suspended, and this rule is hereby suspended.