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.
