Committee Substitute
House Bill 2626 History
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COMMITTEE SUBSTITUTE
FOR
H. B. 2626
(By Delegates Perdue Walters, Eldridge and
Hatfield)
(Originating in the Committee on the Judiciary.)
(March 26, 2009)
A BILL to amend and reenact §33-46-2 of the Code of West Virginia,
1931, as amended, relating to the licensing and regulation of
pharmacy benefit managers; clarifying the definition of third
party administrator to specifically include pharmacy benefit
manager; and definitions.
Be it enacted by the Legislature of West Virginia:
That §33-46-2 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 46: THIRD-PARTY ADMINISTRATORS ACT.
§33-46-2. Definitions.
(a) "Administrator" or "third-party administrator" means a
person, including a pharmacy benefit manager, who directly or
indirectly underwrites or collects charges or premiums from, or
adjusts or settles claims on residents of this state, in connection
with life, annuity or accident and sickness coverage offered or
provided by an insurer, except any of the following:
(1) An employer, or a wholly owned direct or indirect subsidiary of an employer, on behalf of its employees or the
employees of one or more subsidiaries or affiliated corporations of
the employer;
(2) A union on behalf of its members;
(3) An insurer that is licensed to transact insurance in this
state with respect to a policy lawfully issued and delivered in and
pursuant to the laws of this state or another state including:
(A) A health service corporation licensed under article
twenty-four of this chapter;
(B) A health care corporation licensed under article
twenty-five of this chapter;
(C) A health maintenance organization licensed under article
twenty-five-a of this chapter; and
(D) A prepaid limited health service organization licensed
under article twenty-five-d of this chapter;
(4) An insurance producer licensed to sell life, annuities or
health coverage in this state whose activities are limited
exclusively to the sale of insurance;
(5) A creditor on behalf of its debtors with respect to
insurance covering a debt between the creditor and its debtors;
(6) A trust and its trustees, agents and employees acting
pursuant to the trust established in conformity with 29 U.S.C.
Section 186;
(7) A trust exempt from taxation under Section 501(a) of the
Internal Revenue Code, its trustees and employees acting pursuant
to the trust, or a custodian and the custodian's agents or employees acting pursuant to a custodian account which meets the
requirements of Section 401(f) of the Internal Revenue Code;
(8) A credit union or a financial institution that is subject
to supervision or examination by federal or state banking
authorities, or a mortgage lender, to the extent they collect and
remit premiums to licensed insurance producers or to limited lines
producers or authorized insurers in connection with loan payments;
(9) A credit card issuing company that advances for and
collects insurance premiums or charges from its credit card holders
who have authorized collection;
(10) A person who adjusts or settles claims in the normal
course of that person's practice or employment as an attorney at
law and who does not collect charges or premiums in connection with
life, annuity or accident and sickness coverage;
(11) An adjuster licensed by this state whose activities are
limited to adjustment of claims;
(12) A person licensed as a managing general agent in this
state whose activities are limited exclusively to the scope of
activities conveyed under that license; or
(13) An administrator who is affiliated with an insurer and
who only performs the contractual duties, between the administrator
and the insurer, of an administrator for the direct and assumed
business of the affiliated insurer. The insurer is responsible for
the acts of the administrator and is responsible for providing all
of the administrator's books and records to the insurance
commissioner, upon a request from the insurance commissioner. For purposes of this subdivision, "insurer" means a licensed insurance
company, prepaid hospital or medical care plan, health maintenance
organization or a health care corporation.
(b) "Affiliate or affiliated" means an entity or person who
directly or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, a specified
entity or person.
(c) "Commissioner" means the insurance commissioner of this
state.
(d) "Control", "controlling", "controlled by" and "under
common control with" mean the possession, direct or indirect, of
the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract other than a commercial contract for goods
or nonmanagement services, or otherwise, unless the power is the
result of an official position with or corporate office held by the
person. Control shall be presumed to exist if any person, directly
or indirectly, owns, controls, holds with the power to vote or
holds proxies representing ten percent or more of the voting
securities of any other person. This presumption may be rebutted
by a showing made in the manner provided by the West Virginia
insurance holding company systems act that control does not exist
in fact. The commissioner may determine, after furnishing all
persons in interest notice and opportunity to be heard and making
specific findings of fact to support the determination that control
exists in fact, notwithstanding the absence of a presumption to that effect.
(e) "GAAP" means United States generally accepted accounting
principles consistently applied.
(f) "Home state" means the District of Columbia and any state
or territory of the United States in which an administrator is
incorporated or maintains its principal place of business. If
neither the state in which the administrator is incorporated, nor
the state in which it maintains its principal place of business has
adopted the national association of insurance commissioners' model
third party administrator act or a substantially similar law
governing administrators, the administrator may declare another
state, in which it conducts business, to be its "home state".
(g) "Insurance producer" means a person who sells, solicits or
negotiates a contract of insurance as those terms are defined in
this article.
(h) "Insurer" means a person undertaking to provide life,
annuity or accident and sickness coverage or self-funded coverage
under a governmental plan or church plan in this state. For the
purposes of this article, insurer includes an employer, a licensed
insurance company, a prepaid hospital or medical care plan, health
maintenance organization or a health care corporation.
(i) "Negotiate" means the act of conferring directly with or
offering advice directly to a purchaser or prospective purchaser of
a particular contract of insurance concerning any of the
substantive benefits, terms or conditions of the contract, provided
that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.
(j) "Nonresident administrator" means a person who is applying
for licensure or is licensed in any state other than the
administrator's home state.
(k) "Person" means an individual or a business entity.
(l) "Pharmacy benefit manager" means an entity that performs
pharmacy benefit management and includes a person or entity acting
for another pharmacy benefit manager in a contractual or employment
relationship in the performance of pharmacy benefit management
services, including mail order pharmacy.
(m) "Pharmacy benefit management" means the procurement of
prescription drugs at a negotiated rate for dispensation within
this state to covered individuals, the administration or management
of prescription drug benefits provided by a covered entity for the
benefit of covered individuals or any of the following services
provided with regard to the administration of pharmacy benefits:
(1) mail service pharmacy;
(2) claims processing retail network management and payment of
claims to pharmacies for prescription drugs dispensed to covered
individuals;
(3) clinical formulary development and management services;
(4) rebate contracting and administration;
(5) patient compliance, therapeutic intervention and generic
substitution programs; and
(6) disease management programs.
(l)(n) "Sell" means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance
company.
(m)(o) "Solicit" means attempting to sell insurance or asking
or urging a person to apply for a particular kind of insurance from
a particular company.
(n)(p) "Underwrites" or "underwriting" means, but is not
limited to, the acceptance of employer or individual applications
for coverage of individuals in accordance with the written rules of
the insurer or self-funded plan; and the overall planning and
coordinating of a benefits program.
(o)(q) "Uniform application" means the current version of the
national association of insurance commissioners uniform application
for third-party administrators.