NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2317C
SPONSOR: Peoples-Stokes TITLE OF BILL: An act to amend the insurance law and the public
health law, in relation to prescription drug formulary changes during a
contract year
PURPOSE OR GENERAL IDEA OF BILL:
To clarify that health insurance consumers covered by plans that are
required to offer essential health benefits under the affordable care
act are protected from adverse effects of mid-year formulary changes,
and properly notified of formulary changes.
SUMMARY OF PROVISIONS:
Section 1 adds a new section 4909 to the Insurance Law to state that a
health care plan which provides essential health benefits under the
federal affordable care act may not remove a prescription drug from a
formulary during the enrollment year. If the plan's drug formulary has
two or more tiers of drug benefits with different deductibles, copay-
ments or coinsurance, the plan may not move a drug to a tier with higher
patient cost sharing during the enrollment year. The plan may also not
add new or additional formulary restrictions during the enrollment year.
A health care plan may move a prescription drug to a tier with a larger
copayment, coinsurance and different deductible if an AB-rated generic
equivalent drug or interchangeable biological product is added to the
formulary at the same time. In addition, provide notice to policyholders
of the intent to remove a prescription drugs from a formulary or alter
deductible, copayment or coinsurance requirements in the upcoming plan
year, thirty days prior to the open enrollment period for the consec-
utive plan year.
Section 2 adds a new section 4909 to the public health law to also state
that a health care plan which provides essential health benefits under
the federal affordable care act may not remove a prescription drug from
a formulary during the enrollment year. If the plan's drug formulary has
two or more tiers of drug benefits with different deductibles, copay-
ments or coinsurance, the plan may not move a drug to a tier with higher
patient cost sharing during the enrollment year. The plan may also not
add new or additional formulary restrictions during the enrollment year.
A health care plan may move a prescription drug to a tier with a larger
copayment, coinsurance and different deductible if an AB-rated generic
equivalent drug or interchangeable biological product is added to the
formulary at the same time. In addition, provide notice to policyholders
of the intent to remove a prescription drugs from a formulary or alter
deductible, copayment or coinsurance requirements in the upcoming plan
year, thirty days prior to the open enrollment period for the consec-
utive plan year.
Section 3 provides that this act would take effect on the 60th day after
enactment, provided that effective immediately the superintendent of
insurance may make regulations and take other actions necessary to
implement the act.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
The amended version adds "interchangeable biological product" to the new
provisions of the insurance law and public health law.
JUSTIFICATION:
This bill ensures that enrollees who select a health exchange plan based
on their individual prescription drug needs have assurance that the
health plan will maintain continuity in coverage for those prescription
drugs during the course of the enrollment year, and be provided adequate
notice of the intent to remove a prescription on the upcoming plan year.
Enrollees choose health exchange plans based on the formulary status of
a necessary therapy. A change in prescription drug availability could
result in serious medical problems for the enrollee. Also, these unex-
pected formulary changes can be extremely financially burdensome and
have negative health outcomes.
PRIOR LEGISLATIVE HISTORY:
A.7707A of 2015/2016
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
This act shall take effect on the sixtieth day after it shall have
become a law; provided, however, that effective immediately, the addi-
tion, amendment and/or repeal of any rule or regulation necessary for
the implementation of this act on its effective date are authorized to
be made and completed by the superintendent of financial services on or
before such date.
STATE OF NEW YORK
________________________________________________________________________
2317--C
Cal. No. 171
2017-2018 Regular Sessions
IN ASSEMBLY
January 17, 2017
___________
Introduced by M. of A. PEOPLES-STOKES, SKOUFIS, BARRETT, NIOU, ORTIZ,
SEPULVEDA, GALEF, ABINANTI, LAVINE, COLTON, JEAN-PIERRE, TAYLOR,
BYRNE, WEPRIN -- Multi-Sponsored by -- M. of A. ENGLEBRIGHT, HEVESI,
RA -- read once and referred to the Committee on Insurance -- reported
from committee, advanced to a third reading, amended and ordered
reprinted, retaining its place on the order of third reading --
ordered to a third reading, amended and ordered reprinted, retaining
its place on the order of third reading -- passed by Assembly and
delivered to the Senate, recalled from the Senate, vote reconsidered,
bill amended, ordered reprinted, retaining its place on the order of
third reading
AN ACT to amend the insurance law and the public health law, in relation
to prescription drug formulary changes during a contract year
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The insurance law is amended by adding a new section 4909
2 to read as follows:
3 § 4909. Prescription drug formulary changes. (a) Except as otherwise
4 provided in subsection (c) of this section, a health care plan shall
5 not:
6 (i) remove a prescription drug from a formulary;
7 (ii) move a prescription drug to a tier with a larger deductible,
8 copayment, or coinsurance if the formulary includes two or more tiers of
9 benefits providing for different deductibles, copayments or coinsurance
10 applicable to the prescription drugs in each tier; or
11 (iii) add utilization management restrictions to a prescription drug
12 on a formulary, unless such changes occur at the time of enrollment or
13 issuance of coverage.
14 (b) Prohibitions provided in subsection (a) of this section shall
15 apply beginning on the date on which open enrollment begins for a plan
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05529-11-8
A. 2317--C 2
1 year and through the end of the plan year to which such open enrollment
2 period applies.
3 (c) (i) A health care plan with a formulary that includes two or more
4 tiers of benefits providing for different deductibles, copayments or
5 coinsurance applicable to prescription drugs in each tier may move a
6 prescription drug to a tier with a larger deductible, copayment or coin-
7 surance if an AB-rated generic equivalent or interchangeable biological
8 product for such prescription drug is added to the formulary at the same
9 time.
10 (ii) A health care plan may remove a prescription drug from a formu-
11 lary if the federal Food and Drug Administration determines that such
12 prescription drug should be removed from the market, including new
13 utilization management restrictions issued pursuant to federal Food and
14 Drug Administration safety concerns.
15 (d) A health care plan shall provide notice to policyholders of the
16 intent to remove a prescription drug from a formulary or alter deduct-
17 ible, copayment or coinsurance requirements in the upcoming plan year,
18 thirty days prior to the open enrollment period for the consecutive plan
19 year. Such notice of impending formulary and deductible, copayment or
20 coinsurance changes shall also be posted on the plan's online formulary
21 and in any prescription drug finder system that the plan provides to the
22 public.
23 § 2. The public health law is amended by adding a new section 4909 to
24 read as follows:
25 § 4909. Prescription drug formulary changes. 1. Except as otherwise
26 provided in subdivision three of this section, a health care plan shall
27 not:
28 (a) remove a prescription drug from a formulary;
29 (b) move a prescription drug to a tier with a larger deductible,
30 copayment, or coinsurance if the formulary includes two or more tiers of
31 benefits providing for different deductibles, copayments or coinsurance
32 applicable to the prescription drugs in each tier; or
33 (c) add utilization management restrictions to a prescription drug on
34 a formulary, unless such changes occur at the time of enrollment or
35 issuance of coverage.
36 2. Prohibitions provided in subdivision one of this section shall
37 apply beginning on the date on which open enrollment begins for a plan
38 year and through the end of the plan year to which such open enrollment
39 period applies.
40 3. (a) A health care plan with a formulary that includes two or more
41 tiers of benefits providing for different deductibles, copayments or
42 coinsurance applicable to prescription drugs in each tier may move a
43 prescription drug to a tier with a larger deductible, copayment or coin-
44 surance if an AB-rated generic equivalent or interchangeable biological
45 product for such prescription drug is added to the formulary at the same
46 time.
47 (b) A health care plan may remove a prescription drug from a formulary
48 if the federal Food and Drug Administration determines that such
49 prescription drug should be removed from the market, including new
50 utilization management restrictions issued pursuant to federal Food and
51 Drug Administration safety concerns.
52 4. A health care plan shall provide notice to policyholders of the
53 intent to remove a prescription drug from a formulary or alter deduct-
54 ible, copayment or coinsurance requirements in the upcoming plan year,
55 thirty days prior to the open enrollment period for the consecutive plan
56 year. Such notice of impending formulary and deductible, copayment or
A. 2317--C 3
1 coinsurance changes shall also be posted on the plan's online formulary
2 and in any prescription drug finder system that the plan provides to the
3 public.
4 § 3. This act shall take effect on the sixtieth day after it shall
5 have become a law; provided, however, that effective immediately, the
6 addition, amendment and/or repeal of any rule or regulation necessary
7 for the implementation of this act on its effective date are authorized
8 to be made and completed by the superintendent of financial services on
9 or before such date.
