Bill Summary – FastDemocracy

LEGISLATIVE GENERAL COUNSEL                                             H.B. 425
Approved for Filing: C. Williams 6                              1st Sub. (Buff)
          6 02-13-24 1:05 PM 6
                   Representative Norman K Thurston proposes the following substitute bill:
                       HEALTH INSURANCE BENEFIT AMENDMENTS
                                       2024 GENERAL SESSION
                                            STATE OF UTAH
                              Chief Sponsor: Norman K Thurston
                                Senate Sponsor: Curtis S. Bramble
 6
 LONG TITLE
 General Description:
          This bill amends and enacts provisions related to health insurance benefits.
 Highlighted Provisions:
          This bill:
          < defines terms;
          < requires the commissioner of the Insurance Department to assist in creating a form
 if requested;
          < modifies network requirements for a health maintenance organization;
          < requires a health benefit plan to ensure pharmaceutical rebates are used for certain
 purposes;
          < enacts provisions related to pharmacy network requirements for health benefit
 plans;
          < modifies requirements related to pharmacy audits;                                      1st Sub. H.B. 425
          < requires pharmacy benefit manager to offer certain options to self-insured benefit
 plans; and
          < makes technical and conforming changes.
 Money Appropriated in this Bill:
          None
     *HB0425S01*
       1st Sub. (Buff) H.B. 425                                                    02-13-24 1:05 PM
 Other Special Clauses:
        This bill provides a special effective date.
 Utah Code Sections Affected:
 AMENDS:
        31A-2-212, as last amended by Laws of Utah 2020, Chapter 32
        31A-22-618.5, as last amended by Laws of Utah 2017, Chapter 292
        31A-22-643, as enacted by Laws of Utah 2014, Chapter 111
        31A-45-303, as last amended by Laws of Utah 2019, Chapter 193
        31A-46-102, as last amended by Laws of Utah 2020, Chapters 198, 275 and 372
        31A-46-304, as last amended by Laws of Utah 2020, Chapter 198
        58-17b-622, as last amended by Laws of Utah 2023, Chapter 329
 ENACTS:
        31A-46-311, Utah Code Annotated 1953
 REPEALS:
        31A-46-101, as last amended by Laws of Utah 2020, Chapter 198
41
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 31A-2-212 is amended to read:
        31A-2-212. Miscellaneous duties.
        (1) Upon issuance of an order limiting, suspending, or revoking a person's authority to
 do business in Utah, and when the commissioner begins a proceeding against an insurer under
 Chapter 27a, Insurer Receivership Act, the commissioner:
        (a) shall notify by mail the producers of the person or insurer of whom the
 commissioner has record; and
        (b) may publish notice of the order or proceeding in any manner the commissioner
 considers necessary to protect the rights of the public.
        (2) (a) When required for evidence in a legal proceeding, the commissioner shall
 furnish a certificate of authority of a licensee to transact the business of insurance in Utah on
 any particular date.
        (b) The court or other officer shall receive a certificate of authority described in this
 Subsection (2) in lieu of the commissioner's testimony.
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       02-13-24 1:05 PM                                                         1st Sub. (Buff) H.B. 425
           (3) (a) On the request of an insurer authorized to do a surety business, the
 commissioner shall furnish a copy of the insurer's certificate of authority to a designated public
 officer in this state who requires that certificate of authority before accepting a bond.
           (b) The public officer described in Subsection (3)(a) shall file the certificate of
 authority furnished under Subsection (3)(a).
           (c) After a certified copy of a certificate of authority is furnished to a public officer, it
 is not necessary, while the certificate of authority remains effective, to attach a copy of it to any
 instrument of suretyship filed with that public officer.
           (d) Whenever the commissioner revokes the certificate of authority or begins a
 proceeding under Chapter 27a, Insurer Receivership Act, against an insurer authorized to do a
 surety business, the commissioner shall immediately give notice of that action to each public
 officer who is sent a certified copy under this Subsection (3).
           (4) (a) The commissioner shall immediately notify every judge and clerk of the courts
 of record in the state when:
           (i) an authorized insurer doing a surety business:
           (A) files a petition for receivership; or
           (B) is in receivership; or
           (ii) the commissioner has reason to believe that the authorized insurer doing surety
 business:
           (A) is in financial difficulty; or
           (B) has unreasonably failed to carry out any of the authorized insurer's contracts.
           (b) Upon the receipt of the notice required by this Subsection (4), it is the duty of the
 judges and clerks to notify and require a person that files with the court a bond on which the
 authorized insurer doing surety business is surety to immediately file a new bond with a new
 surety.
           (5) (a) The commissioner shall require an insurer that issues, sells, renews, or offers
 health insurance coverage in this state to comply with PPACA and administrative rules adopted
 by the commissioner related to regulation of health benefit plans, including:
           (i) lifetime and annual limits;
           (ii) prohibition of rescissions;
           (iii) coverage of preventive health services;
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        1st Sub. (Buff) H.B. 425                                                    02-13-24 1:05 PM
        (iv) coverage for a child or dependent;
        (v) pre-existing condition limitations;
        (vi) insurer transparency of consumer information including plan disclosures, uniform
 coverage documents, and standard definitions;
        (vii) premium rate reviews;
        (viii) essential health benefits;
        (ix) provider choice;
        (x) waiting periods;
        (xi) appeals processes;
        (xii) rating restrictions;
        (xiii) uniform applications and notice provisions;
        (xiv) certification and regulation of qualified health plans; and
        (xv) network adequacy standards.
        (b) The commissioner shall preserve state control over:
        (i) the health insurance market in the state;
        (ii) qualified health plans offered in the state; and
        (iii) the conduct of navigators, producers, and in-person assisters operating in the state.
        (6) If requested by an association that represents pharmacies or pharmacists, the
 commissioner shall assist the association in developing a form that outlines a pharmacy's rights
 under state and federal law related to pharmacy benefits, pharmacy benefit managers, and
 health benefit plans.
        Section 2. Section 31A-22-618.5 is amended to read:
        31A-22-618.5. Coverage of insurance mandates imposed after January 1, 2009.
        (1) The purpose of this section is to increase the range of health benefit plans available
 in the small group, small employer group, large group, and individual insurance markets.
        (2) A health maintenance organization that is subject to Chapter 8, Health Maintenance
 Organizations and Limited Health Plans:
        (a) shall offer to potential purchasers at least one health benefit plan that is subject to
 the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;
 and
        (b) may offer to a potential purchaser one or more health benefit plans that:
                                                       -4-
        02-13-24 1:05 PM                                                     1st Sub. (Buff) H.B. 425
          (i) are not subject to one or more of the following:
          (A) the limitations on insured indemnity benefits in Subsection 31A-8-105(4);
          (B) except as provided in Subsection (2)(b)(ii), basic health care services as defined in
 Section 31A-8-101; or
          (C) coverage mandates enacted after January 1, 2009, that are not required by federal
 law, provided that the insurer offers one plan under Subsection (2)(a) that covers the mandate
 enacted after January 1, 2009; and
          (ii) when offering a health plan under this section, provide coverage for an emergency
 medical condition as required by Section 31A-22-627.
          (3) An insurer that offers a health benefit plan that is not subject to Chapter 8, Health
 Maintenance Organizations and Limited Health Plans:
          (a) may offer a health benefit plan that is not subject to Section 31A-22-618 and
 Subsection [31A-45-303(3)(b)(iii)] 31A-45-303(3)(b);
          (b) when offering a health plan under this Subsection (3), shall provide coverage of
 emergency care services as required by Section 31A-22-627; and
          (c) is not subject to coverage mandates enacted after January 1, 2009, that are not
 required by federal law, provided that an insurer offers one plan that covers a mandate enacted
 after January 1, 2009.
          (4) Section 31A-8-106 does not prohibit the offer of a health benefit plan under
 Subsection (2)(b).
          (5) (a) Any difference in price between a health benefit plan offered under Subsections
 (2)(a) and (b) shall be based on actuarially sound data.
          (b) Any difference in price between a health benefit plan offered under Subsection
 (3)(a) shall be based on actuarially sound data.
          (6) Nothing in this section limits the number of health benefit plans that an insurer may
 offer.
          Section 3. Section 31A-22-643 is amended to read:
          31A-22-643. Prescription synchronization -- Copay and dispensing fee
 restrictions -- Rebate pass down -- Pharmacy networks.
          (1) For purposes of this section:
          (a) "Copay" means the copay normally charged for a prescription drug.
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        1st Sub. (Buff) H.B. 425                                                   02-13-24 1:05 PM
        (b) "Health insurer" means an insurer, as defined in Subsection 31A-22-634(1).
        (c) "Network pharmacy" means a pharmacy included in a health insurance plan's
 network of pharmacy providers.
        (d) "Prescription drug" means a prescription drug, as defined in Section 58-17b-102,
 that is prescribed for a chronic condition.
        (e) "Rebate" means the same as that term is defined in Section 31A-46-102.
        (2) A health insurance plan may not charge an amount in excess of the copay for the
 dispensing of a prescription drug in a quantity less than the prescribed amount if:
        (a) the pharmacy dispenses the prescription drug in accordance with the health insurer's
 synchronization policy; and
        (b) the prescription drug is dispensed by a network pharmacy.
        (3) A health insurance plan that includes a prescription drug benefit:
        (a) shall implement a synchronization policy for the dispensing of prescription drugs to
 the plan's enrollees; and
        (b) may not base the dispensing fee for an individual prescription on the quantity of the
 prescription drug dispensed to fill or refill the prescription unless otherwise agreed to by the
 plan and the contracted pharmacy at the time the individual requests synchronization.
        (4) [This section applies to health benefit plans renewed or entered into on or after
 January 1, 2015.]
        (a) A health benefit plan shall ensure that each pharmaceutical manufacturer rebate is:
        (i) passed down to the point of sale to offset an enrollee's deductible or coinsurance; or
        (ii) if the enrollee does not have any cost sharing described in Subsection (4)(a)(i), used
 to reduce premiums or enhance health benefits.
        (b) When passing down a rebate as described in Subsection (4)(a), a health benefit plan
 or the health benefit plan's pharmacy benefit manager may:
        (i) for a rebate pass down during the coinsurance phase of a contract, divide the rebate
 between the health benefit plan and the enrollee in a manner that is proportional to the
 coinsurance responsibility of the health benefit plan;
        (ii) limit the amount passed down to the amount of the enrollee's payment
 responsibility; or
        (iii) estimate the amount of a rebate for a given quarter and adjust the amount of a
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        02-13-24 1:05 PM                                                    1st Sub. (Buff) H.B. 425
 rebate passed down to account for any overpayment or underpayment in the subsequent quarter
 for the same product.
        (5) Subsection (4) does not apply:
        (a) if the health benefit plan and the health benefit plan's pharmacy benefit manager
 ensure an enrollee only pays an amount equal to the true net price of a drug less any health
 benefit plan cost sharing requirement at the time of the prescription drug claim;
        (b) if the enrollee is using any form of copay assistance, including direct payment to
 the enrollee or pharmacy from a pharmaceutical manufacturer; or
        (c) to a large employer group health benefit plan if the large employer group health
 benefit plan uses each rebate received to reduce premiums or enhance health benefits.
        (6) A health benefit plan may not prohibit or condition participation in one pharmacy
 network on participation in another pharmacy network.
        (7) The Public Employees' Benefit and Insurance Program shall alter plan design to
 ensure cost neutrality to the state and for compliance with Subsections (4), (5), and (6).
        (8) Subsections (4), (5), and (6) apply to a health benefit plan renewed or entered into
 on or after July 1, 2025.
        Section 4. Section 31A-45-303 is amended to read:
        31A-45-303. Network provider contract provisions.
        (1) Managed care organizations may provide for enrollees to receive services or
 reimbursement in accordance with this section.
        (2) (a) Subject to restrictions under this section, a managed care organization may enter
 into contracts with health care providers under which the health care providers agree to be a
 network provider and supply services, at prices specified in the contracts, to enrollees.
        (b) A network provider contract shall require the network provider to accept the
 specified payment in this Subsection (2) as payment in full, relinquishing the right to collect
 amounts other than copayments, coinsurance, and deductibles from the enrollee.
        (c) The insurance contract may reward the enrollee for selection of network providers
 by:
        (i) reducing premium rates;
        (ii) reducing deductibles;
        (iii) coinsurance;
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        1st Sub. (Buff) H.B. 425                                                        02-13-24 1:05 PM
           (iv) other copayments; or
           (v) any other reasonable manner.
           (3) (a) When reimbursing for services of health care providers that are not network
 providers, the managed care organization may:
           (i) make direct payment to the enrollee; and
           (ii) impose a deductible on coverage of health care providers not under contract.
           (b) [(i) Subsections (3)(b)(iii) and (c) apply to a managed care organization licensed
 under:]
           [(A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;]
           [(B) Chapter 7, Nonprofit Health Service Insurance Corporations; or]
           [(C) Chapter 14, Foreign Insurers; and]
           [(ii) Subsections (3)(b)(iii) and (c) and Subsection (6)(b) do not apply to a managed
 care organization licensed under Chapter 8, Health Maintenance Organizations and Limited
 Health Plans.]
           [(iii)] When selecting health care providers with whom to contract under Subsection
 (2), a managed care organization [described in Subsection (3)(b)(i)] may not unfairly
 discriminate between classes of health care providers, but may discriminate within a class of
 health care providers, subject to Subsection (6).
           (c) For purposes of this section, unfair discrimination between classes of health care
 providers includes:
           (i) refusal to contract with class members in reasonable proportion to the number of
 insureds covered by the insurer and the expected demand for services from class members; and
           (ii) refusal to cover procedures for one class of providers that are:
           (A) commonly used by members of the class of health care providers for the treatment
 of illnesses, injuries, or conditions;
           (B) otherwise covered by the managed care organization; and
           (C) within the scope of practice of the class of health care providers.
           (4) Before the enrollee consents to the insurance contract, the managed care
 organization shall fully