H.B. No. 1405
 
 
 
 
AN ACT
  relating to provision by a health benefit plan of prescription drug
  coverage specified by formulary and to modifications of that
  coverage.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1369.051(2), Insurance Code, is amended
  to read as follows:
               (2)  "Enrollee" means an individual who is covered
  under a [group] health benefit plan, including a covered dependent.
         SECTION 2.  Section 1369.052, Insurance Code, is amended to
  read as follows:
         Sec. 1369.052.  APPLICABILITY OF SUBCHAPTER. This
  subchapter applies only to a [group] health benefit plan that
  provides benefits for medical or surgical expenses incurred as a
  result of a health condition, accident, or sickness, including an
  individual, [a] group, blanket, or franchise insurance policy or
  insurance agreement, a group hospital service contract, or a small
  or large employer group contract or similar coverage document that
  is offered by:
               (1)  an insurance company;
               (2)  a group hospital service corporation operating
  under Chapter 842;
               (3)  a fraternal benefit society operating under
  Chapter 885;
               (4)  a stipulated premium company operating under
  Chapter 884;
               (5)  a reciprocal exchange operating under Chapter 942;
               (6)  a health maintenance organization operating under
  Chapter 843;
               (7)  a multiple employer welfare arrangement that holds
  a certificate of authority under Chapter 846; or
               (8)  an approved nonprofit health corporation that
  holds a certificate of authority under Chapter 844.
         SECTION 3.  Section 1369.053, Insurance Code, is amended to
  read as follows:
         Sec. 1369.053.  EXCEPTION. This subchapter does not apply
  to:
               (1)  a health benefit plan that provides coverage:
                     (A)  only for a specified disease or for another
  single benefit;
                     (B)  only for accidental death or dismemberment;
                     (C)  for wages or payments in lieu of wages for a
  period during which an employee is absent from work because of
  sickness or injury;
                     (D)  as a supplement to a liability insurance
  policy;
                     (E)  for credit insurance;
                     (F)  only for dental or vision care;
                     (G)  only for hospital expenses; or
                     (H)  only for indemnity for hospital confinement;
               (2)  [a small employer health benefit plan written
  under Chapter 1501;
               [(3)]  a Medicare supplemental policy as defined by
  Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss),
  as amended;
               (3) [(4)]  a workers' compensation insurance policy;
               (4) [(5)]  medical payment insurance coverage provided
  under a motor vehicle insurance policy; [or]
               (5) [(6)]  a long-term care insurance policy, including
  a nursing home fixed indemnity policy, unless the commissioner
  determines that the policy provides benefit coverage so
  comprehensive that the policy is a health benefit plan as described
  by Section 1369.052;
               (6)  the child health plan program under Chapter 62,
  Health and Safety Code, or the health benefits plan for children
  under Chapter 63, Health and Safety Code; or
               (7)  a Medicaid managed care program operated under
  Chapter 533, Government Code, or a Medicaid program operated under
  Chapter 32, Human Resources Code.
         SECTION 4.  Section 1369.054, Insurance Code, is amended to
  read as follows:
         Sec. 1369.054.  NOTICE AND DISCLOSURE OF CERTAIN INFORMATION
  REQUIRED. An issuer of a [group] health benefit plan that covers
  prescription drugs and uses one or more drug formularies to specify
  the prescription drugs covered under the plan shall:
               (1)  provide in plain language in the coverage
  documentation provided to each enrollee:
                     (A)  notice that the plan uses one or more drug
  formularies;
                     (B)  an explanation of what a drug formulary is;
                     (C)  a statement regarding the method the issuer
  uses to determine the prescription drugs to be included in or
  excluded from a drug formulary;
                     (D)  a statement of how often the issuer reviews
  the contents of each drug formulary; and
                     (E)  notice that an enrollee may contact the
  issuer to determine whether a specific drug is included in a
  particular drug formulary;
               (2)  disclose to an individual on request, not later
  than the third business day after the date of the request, whether a
  specific drug is included in a particular drug formulary; and
               (3)  notify an enrollee and any other individual who
  requests information under this section that the inclusion of a
  drug in a drug formulary does not guarantee that an enrollee's
  health care provider will prescribe that drug for a particular
  medical condition or mental illness.
         SECTION 5.  Subchapter B, Chapter 1369, Insurance Code, is
  amended by adding Section 1369.0541 to read as follows:
         Sec. 1369.0541.  MODIFICATION OF DRUG COVERAGE UNDER PLAN.
  (a)  A health benefit plan issuer may modify drug coverage provided
  under a health benefit plan if:
               (1)  the modification occurs at the time of coverage
  renewal;
               (2)  the modification is effective uniformly among all
  group health benefit plan sponsors covered by identical or
  substantially identical health benefit plans or all individuals
  covered by identical or substantially identical individual health
  benefit plans, as applicable; and
               (3)  not later than the 60th day before the date the
  modification is effective, the issuer provides written notice of
  the modification to the commissioner, each affected group health
  benefit plan sponsor, each affected enrollee in an affected group
  health benefit plan, and each affected individual health benefit
  plan holder.
         (b)  Modifications affecting drug coverage that require
  notice under Subsection (a) include:
               (1)  removing a drug from a formulary;
               (2)  adding a requirement that an enrollee receive
  prior authorization for a drug;
               (3)  imposing or altering a quantity limit for a drug;
               (4)  imposing a step-therapy restriction for a drug;
  and
               (5)  moving a drug to a higher cost-sharing tier unless
  a generic drug alternative to the drug is available.
         (c)  A health benefit plan issuer may elect to offer an
  enrollee in the plan the option of receiving notifications required
  by this section by e-mail.
         SECTION 6.  Section 1369.055, Insurance Code, is amended to
  read as follows:
         Sec. 1369.055.  CONTINUATION OF COVERAGE REQUIRED; OTHER
  DRUGS NOT PRECLUDED. (a) An issuer of a [group] health benefit plan
  that covers prescription drugs shall offer to each enrollee at the
  contracted benefit level and until the enrollee's plan renewal date
  any prescription drug that was approved or covered under the plan
  for a medical condition or mental illness, regardless of whether
  the drug has been removed from the health benefit plan's drug
  formulary before the plan renewal date.
         (b)  This section does not prohibit a physician or other
  health professional who is authorized to prescribe a drug from
  prescribing a drug that is an alternative to a drug for which
  continuation of coverage is required under Subsection (a) if the
  alternative drug is:
               (1)  covered under the [group] health benefit plan; and
               (2)  medically appropriate for the enrollee.
         SECTION 7.  Section 1369.056(a), Insurance Code, is amended
  to read as follows:
         (a)  The refusal of a [group] health benefit plan issuer to
  provide benefits to an enrollee for a prescription drug is an
  adverse determination for purposes of Section 4201.002 if:
               (1)  the drug is not included in a drug formulary used
  by the [group] health benefit plan; and
               (2)  the enrollee's physician has determined that the
  drug is medically necessary.
         SECTION 8.  Section 1501.108(d), Insurance Code, is amended
  to read as follows:
         (d)  Notwithstanding Subsection (a), a small or large
  employer health benefit plan issuer may modify a small or large
  employer health benefit plan in accordance with Section 1369.0541
  or if:
               (1)  the modification occurs at the time of coverage
  renewal;
               (2)  the modification is effective uniformly among all
  small or large employers covered by that health benefit plan; and
               (3)  the issuer notifies the commissioner and each
  affected covered small or large employer of the modification not
  later than the 60th day before the date the modification is
  effective.
         SECTION 9.  The change in law made by this Act applies only
  to a health benefit plan delivered, issued for delivery, or renewed
  on or after January 1, 2012. A health benefit plan delivered,
  issued for delivery, or renewed before January 1, 2012, is governed
  by the law in effect immediately before the effective date of this
  Act, and that law is continued in effect for that purpose.
         SECTION 10.  This Act takes effect September 1, 2011.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 1405 was passed by the House on April
  6, 2011, by the following vote:  Yeas 143, Nays 0, 1 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 1405 on May 16, 2011, by the following vote:  Yeas 142, Nays 0,
  1 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 1405 was passed by the Senate, with
  amendments, on May 10, 2011, by the following vote:  Yeas 31, Nays
  0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor