SB 959

relating to modification of certain prescription drug benefits and
coverage offered by certain health benefit plans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 1369.053, Insurance Code, as effective
April 1, 2025, is amended to read as follows:
Sec. 1369.053.  EXCEPTION.  This subchapter does not apply
(1)  a health benefit plan that provides coverage:
(A)  only for a specified disease or for another
(B)  only for accidental death or dismemberment;
(C)  for wages or payments in lieu of wages for a
period during which an employee is absent from work because of
(D)  as a supplement to a liability insurance
(F)  only for dental or vision care;
(G)  only for hospital expenses; or
(H)  only for indemnity for hospital confinement;
(2)  a Medicare supplemental policy as defined by
Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss),
(3)  a workers' compensation insurance policy;
(4)  medical payment insurance coverage provided under
a motor vehicle insurance policy;
(5)  a long-term care insurance policy, including a
nursing home fixed indemnity policy, unless the commissioner
determines that the policy provides benefit coverage so
comprehensive that the policy is a health benefit plan as described
(6)  the child health plan program under Chapter 62,
Health and Safety Code, or the health benefits plan for children
under Chapter 63, Health and Safety Code; [or]
(7)  a Medicaid managed care program operated under
Chapter 540 or 540A, Government Code, as applicable, or a Medicaid
program operated under Chapter 32, Human Resources Code; or
(8)  a self-funded health benefit plan as defined by
the Employee Retirement Income Security Act of 1974 (29 U.S.C.
SECTION 2.  Section 1369.0541, Insurance Code, is amended by
amending Subsections (a) and (b) and adding Subsections (a-1) and
(a)  Except as provided by Section 1369.055(a-1) and
Subsection (b-1) of this section, a [A] health benefit plan issuer
may modify drug coverage provided under a health benefit plan if:
(1)  the modification occurs at the time of coverage
(2)  the modification is effective uniformly among all
group health benefit plan sponsors covered by identical or
substantially identical health benefit plans or all individuals
covered by identical or substantially identical individual health
benefit plans, as applicable; and
(3)  not later than the 60th day before the date the
modification is effective, the issuer provides written notice of
the modification to the commissioner, each affected group health
benefit plan sponsor, each affected enrollee in an affected group
health benefit plan, and each affected individual health benefit
(a-1)  The notice described by Subsection (a)(3) must
(1)  indicating that the health benefit plan issuer is
modifying drug coverage provided under the health benefit plan;
(2)  explaining the type of modification; and
(3)  indicating that, on renewal of the health benefit
plan, the health benefit plan issuer may not modify an enrollee's
contracted benefit level for any prescription drug that was
approved or covered under the plan in the immediately preceding
plan year as provided by Section 1369.055(a-1).
(b)  Modifications affecting drug coverage that require
notice under Subsection (a) include:
(1)  removing a drug from a formulary;
(2)  adding a requirement that an enrollee receive
prior authorization for a drug;
(3)  imposing or altering a quantity limit for a drug;
(4)  imposing a step-therapy restriction for a drug;
(5)  moving a drug to a higher cost-sharing tier;
(6)  increasing a coinsurance, copayment, deductible,
or other out-of-pocket expense that an enrollee must pay for a drug;
(7)  reducing the maximum drug coverage amount [unless
a generic drug alternative to the drug is available].
(b-1)  Modifications affecting drug coverage that are more
favorable to enrollees may be made at any time and do not require
notice under Subsection (a), including:
(1)  the addition of a drug to a formulary;
(2)  the reduction of a coinsurance, copayment,
deductible, or other out-of-pocket expense that an enrollee must
(3)  the removal of a utilization review requirement.
SECTION 3.  Section 1369.055, Insurance Code, is amended by
adding Subsections (a-1), (a-2), and (c) to read as follows:
(a-1)  On renewal of a health benefit plan, the plan issuer
may not modify an enrollee's contracted benefit level for any
prescription drug that was approved or covered under the plan in the
immediately preceding plan year and prescribed during that year for
a medical condition or mental illness of the enrollee if:
(1)  the enrollee was covered by the health benefit
plan on the date immediately preceding the renewal date;
(2)  a physician or other prescribing provider
prescribes the drug for the medical condition or mental illness;
(3)  the physician or other prescribing provider in
consultation with the enrollee determines that the drug is the most
appropriate course of treatment.
(a-2)  Modifications prohibited under Subsection (a-1)
(1)  removing a drug from a formulary;
(2)  adding a requirement that an enrollee receive
prior authorization for a drug;
(3)  imposing or altering a quantity limit for a drug;
(4)  imposing a step-therapy restriction for a drug;
(5)  moving a drug to a higher cost-sharing tier;
(6)  increasing a coinsurance, copayment, deductible,
or other out-of-pocket expense that an enrollee must pay for a drug;
(7)  reducing the maximum drug coverage amount.
(c)  Subsections (a-1) and (a-2) do not:
(1)  prohibit a health benefit plan issuer from
requiring, by contract, written policy or procedure, or other
agreement or course of conduct, a pharmacist to provide a
substitution for a prescription drug in accordance with Subchapter
A, Chapter 562, Occupations Code, under which the pharmacist may
substitute an interchangeable biologic product or therapeutically
equivalent generic product as determined by the United States Food
(2)  prohibit a physician or other prescribing provider
from prescribing another medication;
(3)  prohibit the health benefit plan issuer from
adding a new drug to a formulary;
(4)  require a health benefit plan to provide coverage
to an enrollee under circumstances not described by Subsection
(5)  prohibit a health benefit plan issuer from
removing a drug from its formulary or denying an enrollee coverage
(A)  the United States Food and Drug
Administration has issued a statement about the drug that calls
into question the clinical safety of the drug;
(B)  the drug manufacturer has notified the United
States Food and Drug Administration of a manufacturing
discontinuance or potential discontinuance of the drug as required
by Section 506C, Federal Food, Drug, and Cosmetic Act (21 U.S.C.
(C)  the drug manufacturer has removed the drug
SECTION 4.  The changes in law made by this Act apply only to
a health benefit plan that is delivered, issued for delivery, or
renewed on or after January 1, 2026.  A health benefit plan
delivered, issued for delivery, or renewed before January 1, 2026,
is governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
SECTION 5.  This Act takes effect September 1, 2025.