1-1     By:  Nelson                                           S.B. No. 1237
 1-2           (In the Senate - Filed March 11, 1999; March 11, 1999, read
 1-3     first time and referred to Committee on Economic Development;
 1-4     April 6, 1999, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 5, Nays 0; April 6, 1999,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1237                  By:  Sibley
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the administration of pharmacy benefits under certain
1-11     health benefit plans.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Subdivision (1), Section 1, Article 21.07-6,
1-14     Insurance Code, is amended to read as follows:
1-15                 (1)  "Administrator" means a person who collects
1-16     premiums or contributions from or who adjusts or settles claims in
1-17     connection with life, health, and accident benefits, including
1-18     pharmacy benefits, or annuities for residents of this state but
1-19     does not include:
1-20                       (A)  an employer on behalf of its employees or
1-21     the employees of one or more subsidiaries or affiliated
1-22     corporations of the employer;
1-23                       (B)  a union on behalf of its members;
1-24                       (C)  an insurance company or a group hospital
1-25     service corporation subject to Chapter 20 of this code with respect
1-26     to a policy lawfully issued and delivered by it in and under the
1-27     law of a state in which the insurer was authorized to do an
1-28     insurance business;
1-29                       (D)  a health maintenance organization that is
1-30     authorized to operate in this state under the Texas Health
1-31     Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
1-32     Code), with respect to any activity that is specifically regulated
1-33     under that Act;
1-34                       (E)  an agent licensed under Article 21.07 or
1-35     Chapter 213, Acts of the 54th Legislature, Regular Session, 1955
1-36     (Article 21.07-1, Vernon's Texas Insurance Code), who is acting
1-37     under appointment on behalf of an insurance company authorized to
1-38     do business in this state and within the customary scope and duties
1-39     of the insurance agent's authority as an agent and who receives
1-40     commissions as an agent;
1-41                       (F)  a creditor who is acting on behalf of its
1-42     debtors with respect to insurance that covers a debt between the
1-43     creditor and its debtor so long as only the functions of a group
1-44     policyholder or creditor are performed;
1-45                       (G)  a trust established in conformity with 29
1-46     U.S.C. Section 186 and the trustees and employees who are acting
1-47     under the trust;
1-48                       (H)  a trust that is exempt from taxation under
1-49     Section 501(a) of the Internal Revenue Code of 1986 and the
1-50     trustees and employees acting under the trust, or a custodian and
1-51     the custodian's agents and employees who are acting pursuant to a
1-52     custodian account that complies with Section 401(f), Internal
1-53     Revenue Code of 1986;
1-54                       (I)  a bank, credit union, savings and loan
1-55     association, or other financial institution that is subject to
1-56     supervision or examination under federal or state law by federal or
1-57     state regulatory authorities so long as that institution is
1-58     performing only those functions for which it holds a license under
1-59     federal or state law;
1-60                       (J)  a company that advances and collects a
1-61     premium or charge from its credit card holders on their
1-62     authorization, if the company does not adjust or settle claims and
1-63     acts only in the company's debtor-creditor relationship with its
1-64     credit card holders;
 2-1                       (K)  a person who adjusts or settles claims in
 2-2     the normal course of his practice or employment as a licensed
 2-3     attorney and who does not collect any premium or charge in
 2-4     connection with life, health, or accident benefits, including
 2-5     pharmacy benefits, or annuities;
 2-6                       (L)  an adjuster licensed by the commissioner, if
 2-7     the adjuster is engaged in the performance of his powers and duties
 2-8     as an adjuster within the scope of his license;
 2-9                       (M)  a person who provides technical, advisory,
2-10     utilization review, precertification, or consulting services to an
2-11     insurer, plan, or plan sponsor and who does not make any management
2-12     or discretionary decisions on behalf of an insurer, plan, or plan
2-13     sponsor;
2-14                       (N)  an attorney in fact for a Lloyd's operating
2-15     under Chapter 18 of this code or a reciprocal or interinsurance
2-16     exchange operating under Chapter 19 of this code if acting in the
2-17     capacity of attorney in fact under the applicable chapter;
2-18                       (O)  a municipality that is self-insured or a
2-19     joint fund, risk management pool, or a self-insurance pool composed
2-20     of political subdivisions of this state that participate in a fund
2-21     or pool through interlocal agreements and any nonprofit
2-22     administrative agency or governing body or any nonprofit entity
2-23     that acts solely on behalf of a fund, pool, agency, or body or any
2-24     other funds, pools, agencies, or bodies that are established
2-25     pursuant to or for the purpose of implementing an interlocal
2-26     governmental agreement;
2-27                       (P)  a self-insured political subdivision;
2-28                       (Q)  a plan under which insurance benefits are
2-29     provided exclusively by a carrier licensed to do business in this
2-30     state and the administrator of the plan is either:
2-31                             (i)  a full-time employee of the plan's
2-32     organizing or sponsoring association, trust, or other entity; or
2-33                             (ii)  the trustee or trustees of the
2-34     organizing or sponsoring trust; or
2-35                       (R)  a parent of a wholly owned direct or
2-36     indirect subsidiary insurer licensed to do business in this state
2-37     or a wholly owned direct or indirect subsidiary insurer that is a
2-38     part of the parent's holding company system that, only on behalf of
2-39     itself or its affiliated insurers:
2-40                             (i)  collects premiums or contributions, if
2-41     the parent or subsidiary insurer prepares only billing statements,
2-42     places those statements in the United States mail, and causes all
2-43     collected premiums to be deposited directly in a depository account
2-44     of the particular affiliated insurer, and the services rendered by
2-45     the parent or subsidiary are performed under an agreement regulated
2-46     and approved under Article 21.49-1 of this code or a similar
2-47     statute of the domiciliary state if the parent or subsidiary is a
2-48     foreign insurer doing business in this state; or
2-49                             (ii)  furnishes proof-of-loss forms,
2-50     reviews claims, determines the amount of the liability for those
2-51     claims, and negotiates settlements, but pays claims only from the
2-52     funds of the particular subsidiary by checks or drafts of that
2-53     subsidiary and the services rendered by the parent or subsidiary
2-54     are performed under an agreement regulated and approved under
2-55     Article 21.49-1 of this code or a similar statute of the
2-56     domiciliary state if the parent or subsidiary is a foreign insurer
2-57     doing business in this state.
2-58           SECTION 2.  Article 21.07-6, Insurance Code, is amended by
2-59     adding Section 19A to read as follows:
2-60           Sec. 19A.  IDENTIFICATION CARDS FOR CERTAIN PLANS.  (a)  An
2-61     administrator for a plan that provides pharmacy benefits shall
2-62     issue an identification card to each individual covered by the plan
2-63     who is at least 17 years of age.
2-64           (b)  The commissioner by rule shall adopt standard
2-65     information to be included on the identification card.  At minimum,
2-66     the standard form identification card must include:
2-67                 (1)  the name or logo of the entity that is
2-68     administering the pharmacy benefits;
2-69                 (2)  the International Identification Number that is
 3-1     assigned by the American National Standards Institute for the
 3-2     entity that is administering the pharmacy benefits;
 3-3                 (3)  the group number applicable for the individual;
 3-4                 (4)  the effective date of the coverage evidenced by
 3-5     the card; and
 3-6                 (5)  a telephone number to be used to contact an
 3-7     appropriate person to obtain information relating to the pharmacy
 3-8     benefits provided under the coverage.
 3-9           (c)  An administrator for a plan that provides pharmacy
3-10     benefits shall issue to an individual an identification card not
3-11     later than the 30th day after the date the administrator receives
3-12     notice that the individual is eligible for the benefits.
3-13           SECTION 3.  Subchapter E, Chapter 21, Insurance Code, is
3-14     amended by adding Article 21.53L to read as follows:
3-15           Art. 21.53L.  PHARMACY BENEFIT CARDS
3-16           Sec. 1.  DEFINITION.  In this article, "health benefit plan"
3-17     means a health benefit plan described by Section 2 of this article.
3-18           Sec. 2.  SCOPE OF ARTICLE.  (a)  This article applies only to
3-19     a health benefit plan that provides benefits for medical or
3-20     surgical expenses incurred as a result of a health condition,
3-21     accident, or sickness, including an individual, group, blanket, or
3-22     franchise insurance policy or insurance agreement, a group hospital
3-23     service contract, or an individual or group evidence of coverage or
3-24     similar coverage document that is offered by:
3-25                 (1)  an insurance company;
3-26                 (2)  a group hospital service corporation operating
3-27     under Chapter 20 of this code;
3-28                 (3)  a fraternal benefit society operating under
3-29     Chapter 10 of this code;
3-30                 (4)  a stipulated premium insurance company operating
3-31     under Chapter 22 of this code;
3-32                 (5)  a reciprocal exchange operating under Chapter 19
3-33     of this code;
3-34                 (6)  a health maintenance organization operating under
3-35     the Texas Health Maintenance Organization Act (Chapter 20A,
3-36     Vernon's Texas Insurance Code);
3-37                 (7)  a multiple employer welfare arrangement that holds
3-38     a certificate of authority under Article 3.95-2 of this code; or
3-39                 (8)  an approved nonprofit health corporation that
3-40     holds a certificate of authority issued by the commissioner under
3-41     Article 21.52F of this code.
3-42           (b)  This article does not apply to:
3-43                 (1)  a plan that provides coverage:
3-44                       (A)  only for a specified disease or other
3-45     limited benefit;
3-46                       (B)  only for accidental death or dismemberment;
3-47                       (C)  for wages or payments in lieu of wages for a
3-48     period during which an employee is absent from work because of
3-49     sickness or injury;
3-50                       (D)  as a supplement to liability insurance;
3-51                       (E)  for credit insurance;
3-52                       (F)  only for dental or vision care;
3-53                       (G)  only for hospital expenses; or
3-54                       (H)  only for indemnity for hospital confinement;
3-55                 (2)  a small employer health benefit plan written under
3-56     Chapter 26 of this code;
3-57                 (3)  a Medicare supplemental policy as defined by
3-58     Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
3-59                 (4)  workers' compensation insurance coverage;
3-60                 (5)  medical payment insurance coverage issued as part
3-61     of a motor vehicle insurance policy; or
3-62                 (6)  a long-term care policy, including a nursing home
3-63     fixed indemnity policy, unless the commissioner determines that the
3-64     policy provides benefit coverage so comprehensive that the policy
3-65     is a health benefit plan as described by Subsection (a) of this
3-66     section.
3-67           Sec. 3.  IDENTIFICATION CARD; PHARMACY BENEFITS.  (a)  A
3-68     health benefit plan that provides pharmacy benefits for enrollees
3-69     in the plan shall include on the identification card of each
 4-1     enrollee:
 4-2                 (1)  the name or logo of the entity that is
 4-3     administering the pharmacy benefits, if different from the health
 4-4     benefit plan;
 4-5                 (2)  the group number applicable to the individual;
 4-6                 (3)  the effective date of the coverage evidenced by
 4-7     the card; and
 4-8                 (4)  a telephone number to be used to contact an
 4-9     appropriate person to obtain information relating to the pharmacy
4-10     benefits provided under the coverage.
4-11           (b)  This section does not require a health benefit plan that
4-12     administers its own pharmacy benefits to issue an identification
4-13     card separate from any identification card issued to an enrollee to
4-14     evidence coverage under the health benefit plan, if the
4-15     identification card contains the elements required by Subsection
4-16     (a) of this section.
4-17           SECTION 4.  This Act takes effect September 1, 1999.
4-18           SECTION 5.  (a)  This Act applies only to a person acting as
4-19     an administrator, as that term is defined by Subdivision (1),
4-20     Section 1, Article 21.07-6, Insurance Code, as amended by this Act,
4-21     with respect to pharmacy benefits on or after January 1, 2000.  A
4-22     person acting as an administrator with respect to pharmacy
4-23     benefits before January 1, 2000, is governed by the law as it
4-24     existed immediately before the effective date of this Act and that
4-25     law is continued in effect for that purpose.
4-26           (b)  An administrator, as that term is defined by Subdivision
4-27     (1), Section 1, Article 21.07-6, Insurance Code, as amended by this
4-28     Act, is not required to issue a new identification card to an
4-29     individual, as required by Section 19A, Article 21.07-6, Insurance
4-30     Code, as added by this Act, if the identification card held by the
4-31     individual on the effective date of this Act contains the elements
4-32     described by Subdivisions (2) through (5), Subsection (b), Section
4-33     19A, Article 21.07-6, Insurance Code, as added by this Act.  A new
4-34     card complying with Section 19A, Article 21.07-6, Insurance Code,
4-35     as added by this Act, must be issued at the time the individual's
4-36     coverage is modified.
4-37           (c)  A health benefit plan, as that term is defined by
4-38     Section 1, Article 21.53L, Insurance Code, as added by this Act, is
4-39     not required to issue a new identification card to an enrollee, as
4-40     required by Section 3, Article 21.53L, Insurance Code, as added by
4-41     this Act, if the identification card held by the enrollee on the
4-42     effective date of this Act contains the elements described by
4-43     Subdivisions (2), (3), and (4), Subsection (a), Section 3, Article
4-44     21.53L, Insurance Code, as added by this Act.  A new card complying
4-45     with Article 21.53L, Insurance Code, as added by this Act, must be
4-46     issued at the time the enrollee's coverage is modified.
4-47           SECTION 6.  The importance of this legislation and the
4-48     crowded condition of the calendars in both houses create an
4-49     emergency and an imperative public necessity that the
4-50     constitutional rule requiring bills to be read on three several
4-51     days in each house be suspended, and this rule is hereby suspended.
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