SENATE AMENDED

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY LONGIETTI, EACHUS, CALTAGIRONE, CARROLL, COHEN, DeLUCA, DONATUCCI, FRANKEL, GALLOWAY, GEORGE, GIBBONS, HENNESSEY, JOSEPHS, KORTZ, KOTIK, MANDERINO, MUNDY, MURT, M. O'BRIEN, READSHAW, SIPTROTH, K. SMITH, WALKO, WHEATLEY, YOUNGBLOOD WANSACZ, BRIGGS, VULAKOVICH AND DENLINGER, MARCH 10, 2009

SENATOR D.WHITE, BANKING AND INSURANCE, IN SENATE, AS AMENDED, JUNE 8, 2010   

AN ACT

Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An

act relating to insurance; amending, revising, and

consolidating the law providing for the incorporation of

insurance companies, and the regulation, supervision, and

protection of home and foreign insurance companies, Lloyds

associations, reciprocal and inter-insurance exchanges, and

fire insurance rating bureaus, and the regulation and

supervision of insurance carried by such companies,

associations, and exchanges, including insurance carried by

the State Workmen's Insurance Fund; providing penalties; and

repealing existing laws," further providing for conditions

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subject to which policies are to be issued; and providing for

health insurance coverage for certain children of insured

parents providing for access to community pharmacy services.

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The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 617(A)(3) and (9) of the act of May 17,

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1921 (P.L.682, No.284), known as The Insurance Company Law of

1921, repealed and added May 25, 1951 (P.L.417, No.99) and added

January 18, 1968 (1967 P.L.969, No.433), are amended to read:

Section 617.  Conditions Subject to Which Policies Are to Be

Issued.--(A)  No such policy shall be delivered or issued for

delivery to any person in this Commonwealth unless:

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(3)  it purports to insure only one person, except that a

policy may insure, originally or by subsequent amendment, upon

the application of an adult head of a family who shall be deemed

the policyholder, any two or more eligible members of that

family, including husband, wife, dependent children or any

children under a specified age which, except as provided under

section 617.1, shall not exceed nineteen years and any other

person dependent upon the policyholder; and

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(9)  A policy delivered or issued for delivery after January

1, 1968, under which coverage of a dependent of a policyholder

terminates at a specified age shall, with respect to an

unmarried child covered by the policy prior to the attainment of

the age of nineteen or except as provided under section 617.1,

the age of twenty-nine, who is incapable of self-sustaining

employment by reason of mental retardation or physical handicap

and who became so incapable prior to attainment of age nineteen

and who is chiefly dependent upon such policyholder for support

and maintenance, not so terminate while the policy remains in

force and the dependent remains in such condition, if the

policyholder has within thirty-one days of such dependent's

attainment of the limiting age submitted proof of such

dependent's incapacity as described herein. The foregoing

provisions of this paragraph shall not require an insurer to

insure a dependent who is a mentally retarded or physically

handicapped child where the policy is underwritten on evidence

of insurability based on health factors set forth in the

application or where such dependent does not satisfy the

conditions of the policy as to any requirement for evidence of

insurability or other provisions of the policy, satisfaction of

which is required for coverage thereunder to take effect. In any

such case the terms of the policy shall apply with regard to the

coverage or exclusion from coverage of such dependent.

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Section 2.  The act is amended by adding a section to read:

Section 617.1.  Health Insurance Coverage for Certain

Children of Insured Parents.--(A)  An insurer that issues,

delivers, executes or renews health care insurance in this

Commonwealth, under which coverage of a child would otherwise

terminate at a specified age, shall, at the option of the

policyholder's insured employe, provide coverage to a child of

an insured employe beyond that specified age, up through and

including the age of twenty-nine, provided that the child meet

all of the following requirements:

(1)  Is not married.

(2)  Has no dependents.

(3)  Is a resident of this Commonwealth or is enrolled as a

full-time student at an institution of higher education.

(4)  Is not covered by another policy of health insurance

including benefits under Title XVIII of the Social Security Act

(49 Stat. 620, 42 U.S.C. § 1395 et seq.).

(B)  An insured may exercise the option provided under

subsection (A) at any time during the term of the policy by

notice to the insurer.

(C)  This section shall not include the following types of

insurance or any combination thereof:

(1)  Hospital indemnity.

(2)  Accident.

(3)  Specified disease.

(4)  Disability income.

(5)  Dental.

(6)  Vision.

(7)  Civilian Health and Medical Program of the Uniformed

Services (CHAMPUS) supplement.

(8)  Medicare supplement.

(9)  Long-term care.

(10)  Other limited benefit plans.

(11)  Individual health insurance policies.

(D)  For the purpose of this section:

"Health care insurance" means a group health, sickness or

accident policy or subscriber contract or certificate issued by

an entity subject to any one of the following:

(1)  This act.

(2)  The act of December 29, 1972 (P.L.1701, No.364), known

as the "Health Maintenance Organization Act."

(3)  The act of May 18, 1976 (P.L.123, No.54), known as the

"Individual Accident and Sickness Insurance Minimum Standards

Act."

(4)  40 Pa.C.S. Ch. 61 (relating to hospital plan

corporations) or 63 (relating to professional health services

plan corporations).

(E)  Employers shall not be required to contribute to any

increased premium charged by the insurer for the exercise of the

option provided under subsection (A), but the contributions may

be agreed to by the employer.

Section 3.  The amendment or addition of sections 617(A)(3)

and (9) and 617.1 of the act shall apply to policies offered,

issued or renewed on or after the effective date of this

section.

Section 4.  This act shall take effect in 60 days.

Section 1.  The act of May 17, 1921 (P.L.682, No.284), known

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as The Insurance Company Law of 1921, is amended by adding a

section to read:

Section 635.5.  Access to Community Pharmacy Services.--(a)

With respect to prescription medications dispensed by a pharmacy

that agrees to participate in a provider network pursuant to

subsection (c), no health insurance policy, government program

or pharmacy benefit manager providing coverage or reimbursement

for the dispensing of prescription medications may as a

condition for the provision of benefits or for the payment of

reimbursement for medications or pharmacy services:

(1)  require a covered individual to obtain any prescription

medication from a mail order pharmacy;

(2)  impose upon a covered individual utilizing a retail

community pharmacy any copayment, deductible or other cost-

sharing requirement or prior authorization requirement not

imposed upon a covered individual utilizing a mail order

pharmacy;

(3)  subject any medication dispensed by a retail community

pharmacy to a covered individual to a minimum or maximum

quantity limit, length of script, restriction on refills or

requirement to obtain refills not imposed upon a mail order

pharmacy;

(4)  require a covered individual in whole or in part to pay

for any medication dispensed by a retail community pharmacy and

seek reimbursement when the individual is not required to pay

for and seek reimbursement in the same manner for a prescription

dispensed by a mail order pharmacy;

(5)  subject a covered individual to any administrative

requirement in order to use a retail community pharmacy that is

not imposed upon the use of a mail order pharmacy, including a

requirement to elect not to have a prescription dispensed by a

mail order pharmacy as a condition of utilizing a retail

community pharmacy; or

(6)  impose any other term, condition or requirement

pertaining to the use of the services of a retail community

pharmacy that materially and unreasonably interferes with or

impairs the right of a covered individual to obtain prescription

medications from a retail community pharmacy of the individual's

choice.

(b)  (1)  No health insurance company, agent or contractor of

an insurance company, government program or pharmacy benefit

manager shall, in the administration of a health insurance

policy or a pharmacy provider network, take any action or allow

any action to occur that results in actions prohibited under

subsection (a).

(2)  With respect to prescription medications dispensed by a

pharmacy eligible to participate in a provider network under

subsection (c), information regarding the dispensing of

prescription medications by a pharmacy shall not be used by a

health insurance company, an agent, affiliate or contractor of

an insurance company, a government program or by a prescription

benefit manager to promote, advertise or encourage the use of a

participating pharmacy, including a mail order pharmacy.

(c)  (1)  A pharmacy licensed and in good standing with the

State Board of Pharmacy, and not disqualified from participation

in the Medicaid or Medicare program for cause, shall have a

right to participate in a pharmacy provider network, provided

the pharmacy offers to enter into an agreement accepting the

standard terms, conditions or requirements relating to

dispensing fees, payments for product costs and other pharmacy

services and the quality of dispensing and other pharmacy

services established by a health insurance company, government

program or pharmacy benefit manager for all pharmacies in the

provider network.

(2)  The standard terms and conditions relating to dispensing

fees and payment for product costs and other pharmacy services

established under paragraph (1) shall provide convenient access

to retail community pharmacies consistent with the standards

established under section 2121 and taking into consideration the

standards established by the Center for Medicare and Medicaid

Services of the United States Department of Health and Human

Services pursuant to section 1395w-104(b)(1)(C) of the Social

Security Act (49 Stat. 620, 42 U.S.C. § 1395w-104(b)(1)(C)).

(3)  The standard terms and conditions relating to dispensing

fees, ingredient costs and payments for pharmacy services

provided to retail community pharmacies shall not be less than

the amounts paid by or for the benefit of a health insurance

company, government program or pharmacy benefit manager for

dispensing of the same medications and the provision of

comparable services to any mail order pharmacy, including

amounts paid or distributed to a mail order pharmacy by an

affiliate of the mail order pharmacy or by the pharmacy benefit

manager.

(4)  In determining whether the terms and conditions relating

to dispensing fees, ingredient costs and payments for pharmacy

services are not less than amounts paid to a mail order pharmacy

under paragraph (3), consideration shall be given to the extent

practicable to any incentive payments received for the

dispensing of prescription medications by a mail order pharmacy

or an affiliate of a mail order pharmacy, including a pharmacy

benefit manager, from a pharmaceutical manufacturer or

distributor other than amounts paid for services provided to a

pharmaceutical manufacturer or distributor, or amounts used to

reduce the cost of prescription medication benefits paid by the

purchaser of a health insurance policy or the services of a

prescription drug manager, or by a government program.

(5)  A pharmacy shall not be deemed to be eligible to

participate in a provider network under this subsection during

any period of time for which its right to participate in a

network has been suspended or revoked for serious violations of

a network pharmacy provider agreement established under this

subsection that reasonably warrant suspension or revocation.

(d)  (1)  With respect to a health insurance company or

pharmacy benefit manager:

(i)  the department may utilize the enforcement mechanisms,

remedies and penalties available under section 628 and may

demand the production of any information necessary to enforce

this section; and

(ii)  regardless of whether any enforcement action is taken

by the department, a covered individual, pharmacy or pharmacist

aggrieved by a violation of this section may seek relief to

remedy alleged violations of this section involving at least one

level of internal review and investigation in the manner

provided under section 2161(b) and an opportunity to appeal to

the department in the manner provided under section 2142 unless,

with respect to a pharmacy or pharmacist, an agreement with the

insurance company or pharmacy benefit manager establishes an

alternative dispute resolution process in the manner provided

under section 2162(f).

(2)  A covered individual, pharmacy or pharmacist aggrieved

by a violation of this section may petition the department to

review complaints regarding violations of this section.

(e)  It is the intent of the General Assembly that this

section and the other provisions of Articles VI, VI-A, VI-B, X-A

and XII relating to health insurance shall, as applied to

persons subject to this act to the fullest extent possible, be

preserved from preemption by Federal law. In the event any

portion of this section or Article VI, VI-A, VI-B, X-A or XII

shall be preempted by Federal law or otherwise declared invalid

or unenforceable, the remaining provisions of such laws shall

remain in force and effect.

(f)  As used in this section:

(1)  "Covered individual" means an individual receiving

prescription medication coverage or reimbursement provided by a

health insurance policy, government program or pharmacy benefit

manager.

(2)  "Government program" means any of the following:

(i)  The Commonwealth's medical assistance program

established under the act of June 13, 1967 (P.L.31, No.21),

known as the "Public Welfare Code."

(ii)  The adult basic coverage insurance program established

under Chapter 13 of the act of June 26, 2001 (P.L.755, No.77),

known as the "Tobacco Settlement Act."

(iii)  The Children's Health Care Program established under

Article XXIII.

(iv)  The program of pharmaceutical assistance for the

elderly established by the act of August 26, 1971 (P.L.351,

No.91), known as the "State Lottery Law."

(v)  An employe benefit plan described in section 1003(b)(1)

of the Employee Retirement Income Security Act of 1974 (Public

Law 93-46, 29 U.S.C. § 1003(b)(1)), applicable to government

employes who are residents of this Commonwealth.

(vi)  Any other program established or operated by the

Commonwealth that provides or pays for the cost of prescription

medications and pharmacy services provided to residents of this

Commonwealth.

(3)  "Health insurance company" means a fraternal benefit

society, health maintenance organization, hospital plan

corporation, insurer, preferred provider organization or

professional health services plan corporation as defined by

section 603-B, or other entity subject to this act.

(4)  "Health insurance policy" means a group or individual

health or sickness or accident insurance policy, subscriber

contract or certificate issued by a health insurance company

providing coverage or benefits for prescription medications to

residents of this Commonwealth.

(5)  "Mail order pharmacy" means a pharmacy that

predominantly receives prescriptions by mail, telefax or through

electronic submissions and predominantly dispenses the

medications to patients through the use of the United States

mail or other common or contract carrier delivery service and

generally provides consultations with patients electronically

rather than face-to-face.

(6)  "Pharmacy benefit manager" means a person, partnership,

association or corporation not holding a certificate of

authority under section 630 that establishes, operates,

maintains or administers agreements with pharmacies and health

insurance companies, government programs or employe benefit

plans described in section 1003(a) of the Employee Retirement

Income Security Act of 1974 relating to the dispensing of

prescription medications and the provision of pharmacy services

to covered individuals, including agreements relating to the

amounts to be charged by the pharmacy for services rendered,

incentives provided to covered individuals to use the services

of designated pharmacies, or limitations on reimbursement only

when services are provided by designated pharmacies.

(7)  "Retail community pharmacy" means a pharmacy that is

open to the public, serves walk-in customers and makes available

face-to-face consultations between licensed pharmacists and

persons to whom medications are dispensed.

Section 2.  The Insurance Department may adopt regulations to

administer and enforce section 635.5 of the act.

Section 3.  Section 635.5 of the act shall apply to health

insurance policies, government programs and agreements with

pharmacy benefit managers that are offered, issued, executed or

renewed or that have provisions related to prescription

medication benefits that are amended on or after the effective

date of section 635.5 of the act.

Section 4.  This act shall take effect as follows:

(1)  The addition of section 635.5 of the act shall take

effect in 120 days.

(2)  The remainder of this act shall take effect

immediately.