2021 -- S 0381

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LC001399

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

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A N   A C T

RELATING TO INSURANCE -- PRESCRIPTION DRUG BENEFITS

     Introduced By: Senators McCaffrey, DiPalma, Quezada, and Miller

     Date Introduced: February 25, 2021

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 27-20.8-1 and 27-20.8-2 of the General Laws in Chapter 27-20.8

entitled "Prescription Drug Benefits" are hereby amended to read as follows:

     27-20.8-1. Definitions.

     For the purposes of this chapter, the following terms shall mean:

     (1) "Director" shall mean the director of the department of business regulation.

     (2) "Health insurance carrier" means a person, firm, corporation, or other entity subject to

the jurisdiction of the commissioner under this chapter. Such term does not include a group health

plan.

     (2)(3) "Health plan" or "health benefit plan" means health insurance coverage and a group

health plan, including coverage provided through an association plan if it covers Rhode Island

residents shall mean an insurance carrier as defined in chapters 18, 19, 20 and 41 of this title.

     (3)(4) "Insured" shall mean any person who is entitled to have pharmacy services paid by

a health plan insurance carrier pursuant to a policy, certificate, contract or agreement of insurance

or coverage including those administered for the health plan insurance carrier under a contract with

a third-party administrator that manages pharmacy benefits or pharmacy network contracts.

     (5) "Out-of-pocket expenditure" means a co-payment, coinsurance, deductible, or other

cost-sharing mechanism.

     (6) "Pharmacy benefit manager" or "PBM" means an entity doing business in this state that

contracts to administer or manage prescription drug benefits on behalf of any health insurance

carrier that provides prescription drug benefits to residents of this state.

     27-20.8-2. Pharmacy benefit, limits and co-payments.

     Any health plan insurance carrier that offers pharmacy benefits, pursuant to a policy,

certificate, contract or agreement of insurance or coverage including those administered for health

insurance carrier under a contract with a third-party administrator that manages pharmacy benefits

or pharmacy network contracts issued on or after January 1, 2022, shall comply with the following:

     (a) When a health plan's insurance carrier's pharmacy benefit has a dollar limit, the

insured's use of such benefit shall be determined based on the health plan's insurance carrier's

contracted rate to purchase the drug minus the enrollee's applicable co-payment for covered drugs.

The balance will apply towards the enrollee's dollars limit.

     (b) When a health plan insurance carrier charges a co-payment for covered prescription

drugs that is based on a percent of the drug cost, the health plan insurance carrier shall disclose

within the group policy or individual policy benefits description statement whether the co-payment

is based on the plan's health insurance carrier's contracted rate to purchase the drug or some other

cost basis such as retail price.

     (c) A health insurance carrier or other health benefit plan offered by a health insurer or

pharmacy benefit manager shall not include an annual or lifetime dollar limit on prescription drug

benefits for any individual.

     (d) A health insurance carrier or other health benefit plan offered by a health insurer or

pharmacy benefit manager shall limit a beneficiary's out-of-pocket expenditures for prescription

drugs, including specialty drugs, to no more for self-only and family coverage per year than the

minimum dollar amounts in effect under § 223(c)(2)(A)(i) of the Internal Revenue Code of 1986

for self-only and family coverage.

     (e) For prescription drug benefits offered in conjunction with a "high-deductible health

plans" (HDHP) as defined in § 223(c)(2)(A)(i) of the Internal Revenue Code of 1986, a health

insurance carrier may not provide prescription drug benefits until the expenditures applicable to

the deductible under the HDHP have met the amount of the minimum annual deductibles in effect

for self-only and family coverage under § 223(c)(2)(A)(i) of the Internal Revenue Code of 1986

for self-only and family coverage, respectively. Once the foregoing expenditure amount has been

met under the HDHP, coverage for prescription drug benefits shall begin, and the limit on out-of-

pocket expenditures for prescription drug benefits shall be as specified in subsection (d) of this

section.

     (f) The office of the health insurance commissioner may use any of its enforcement powers

to obtain compliance with this section.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- PRESCRIPTION DRUG BENEFITS

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     This act would provide that health insurance policies that provide prescription drug

coverage not include an annual or lifetime dollar limit on drug benefits.

     This act would take effect upon passage.

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