What's happening
This bill prohibits health plans from making most changes to prescription drug formularies during a plan year, except in limited circumstances, and requires advance notice to policyholders.
Why it matters
Protects patients from mid-year prescription drug changes. By locking in a health plan’s drug formulary for the entire plan year, this bill helps patients avoid unexpected changes in drug coverage or costs after they’ve chosen a plan, reducing disruptions to ongoing treatments.
Limits insurer flexibility to alter drug coverage. The bill only allows changes to formularies in specific cases (like when a generic or interchangeable drug is added, or if the FDA withdraws a drug), ensuring that insurers can’t shift costs to consumers or restrict access for financial reasons during the plan year.
Enhances transparency and planning. By requiring health plans to give policyholders at least 30 days’ advance notice (and public online posting) of any upcoming changes to drug coverage or out-of-pocket costs for the next plan year, the bill empowers consumers to make informed choices during open enrollment.
Aligns with patient protection efforts. These provisions address common complaints about “bait and switch” tactics in the insurance industry, where patients sign up based on one set of benefits only to face new restrictions or higher costs mid-year, thus supporting stability and trust in health coverage.
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Who cares
Headline styles
Freeze Drug Formularies Yearly
Plain English, a few words. Used as the page title.
Sponsors
34 Co-sponsors
- Joseph P. Addabbo Jr.
- Fredrick J. Akshar II
- Marisol Alcantara
- Tony Avella
- John J. Bonacic
- Neil D. Breslin
- John E. Brooks
- David Carlucci
- Leroy Comrie
- Thomas Croci
- John A. DeFrancisco
- Martin J. Golden
- Joseph A. Griffo
- Jesse Hamilton
- Kemp Hannon
- Pamela Helming
- Chris Jacobs
- Todd Kaminsky
- Timothy M. Kennedy
- Liz Krueger
- Andrew J. Lanza
- Kenneth P. LaValle
- Kathleen A. Marchione
- Shelley Mayer
- Terrence P. Murphy
- Robert Ortt
- Kevin S. Parker
- Patty Ritchie
- Gustavo Rivera
- Joseph E. Robach
- James Sanders Jr.
- Diane J. Savino
- Luis R. Sepúlveda
- David J. Valesky
History
- Print number 5022c
- Amend and recommit to insurance
- Print number 5022b
- Amend and recommit to insurance
- Referred to insurance
- Print number 5022a
- Amend (t) and recommit to insurance
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Stop Midyear Drug Switches
In Senate Committee · Insurance · Sponsor Crystal Peoples-Stokes
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5022--C
2017-2018 Regular Sessions
IN SENATE
March 6, 2017
Introduced by Sens. SERINO, ALCANTARA, AVELLA, BRESLIN, CARLUCCI, CROCI, GOLDEN, GRIFFO, HAMILTON, HANNON, HELMING, KAMINSKY, KENNEDY, KRUEGER, MARCHIONE, MURPHY, ORTT, RITCHIE, SANDERS, SAVINO, VALESKY -- read twice and ordered printed, and when printed to… Show allHide
Introduced by Sens. SERINO, ALCANTARA, AVELLA, BRESLIN, CARLUCCI, CROCI, GOLDEN, GRIFFO, HAMILTON, HANNON, HELMING, KAMINSKY, KENNEDY, KRUEGER, MARCHIONE, MURPHY, ORTT, RITCHIE, SANDERS, SAVINO, VALESKY -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- recommitted to the Committee on Insurance in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
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 Assembly, do enact as follows:
Section 1. The insurance law is amended by adding a new section 4909 to read as follows:
§ 4909. Prescription drug formulary changes. (a) Except as otherwise provided in subsection (c) of this section, a health care plan shall not:
(i) remove a prescription drug from a formulary;
(ii) move a prescription drug to a tier with a larger deductible, copayment, or coinsurance if the formulary includes two or more tiers of benefits providing for different deductibles, copayments or coinsurance applicable to the prescription drugs in each tier; or
(iii) add utilization management restrictions to a prescription drug on a formulary, unless such changes occur at the time of enrollment or issuance of coverage.
(b) Prohibitions provided in subsection (a) of this section shall 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.
LBD05529-10-8
S. 5022--C 2
year and through the end of the plan year to which such open enrollment period applies.
(c) (i) A health care plan with a formulary that includes two or more tiers of benefits providing for different deductibles, copayments or coinsurance applicable to prescription drugs in each tier may move a prescription drug to a tier with a larger deductible, copayment or coinsurance if an AB-rated generic equivalent or interchangeable biological product for such prescription drug is added to the formulary at the same time.
(ii) A health care plan may remove a prescription drug from a formulary if the federal Food and Drug Administration determines that such prescription drug should be removed from the market, including new utilization management restrictions issued pursuant to federal Food and Drug Administration safety concerns.
(d) A health care plan shall provide notice to policyholders of the intent to remove a prescription drug 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 consecutive plan year. Such notice of impending formulary and deductible, copayment or coinsurance changes shall also be posted on the plan's online formulary and in any prescription drug finder system that the plan provides to the public.
§ 2. The public health law is amended by adding a new section 4909 to read as follows:
§ 4909. Prescription drug formulary changes. 1. Except as otherwise provided in subdivision three of this section, a health care plan shall not:
(a) remove a prescription drug from a formulary;
(b) move a prescription drug to a tier with a larger deductible, copayment, or coinsurance if the formulary includes two or more tiers of benefits providing for different deductibles, copayments or coinsurance applicable to the prescription drugs in each tier; or
(c) add utilization management restrictions to a prescription drug on a formulary, unless such changes occur at the time of enrollment or issuance of coverage.
2. Prohibitions provided in subdivision one of this section shall apply beginning on the date on which open enrollment begins for a plan year and through the end of the plan year to which such open enrollment period applies.
3. (a) A health care plan with a formulary that includes two or more tiers of benefits providing for different deductibles, copayments or coinsurance applicable to prescription drugs in each tier may move a prescription drug to a tier with a larger deductible, copayment or coinsurance if an AB-rated generic equivalent or interchangeable biological product for such prescription drug is added to the formulary at the same time.
(b) A health care plan may remove a prescription drug from a formulary if the federal Food and Drug Administration determines that such prescription drug should be removed from the market, including new utilization management restrictions issued pursuant to federal Food and Drug Administration safety concerns.
4. A health care plan shall provide notice to policyholders of the intent to remove a prescription drug 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 consecutive plan year. Such notice of impending formulary and deductible, copayment or
S. 5022--C 3
coinsurance changes shall also be posted on the plan's online formulary and in any prescription drug finder system that the plan provides to the public.
§ 3. This act shall take effect on the sixtieth day after it shall have become a law; provided, however, that effective immediately, the addition, 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.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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
To clarify that health insurance consumers are protected from adverse effects of mid-year formulary changes.
Summary of provisions
Section 1 creates a new section 4909 of the Insurance Law to add restrictions to drug formulary changes. 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. Additionally, the plan may not add new utilization management restrictions to a formulary drug, unless such changes occur at the time of enrollment or issuance of coverage, and must provide notice to policyholders of certain changes to a formulary in an upcoming plan 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 inter- changeable biological equivalent is added to the formulary at the same time. A prescription drug may be removed from a formulary if the federal Food and Drug Administration determines that such drug should be removed from the market, including new utilization management restrictions aris- ing from safety concerns.
Section 2 adds a new section 4909 of the Public Health Law to add simi- lar provisions as Section 1 of this act.
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.
Justification
The purpose of the bill is to ensure that health insurance enrollees have assurance that their health plan will maintain continuity in cover- age for their prescription drugs during the course of the enrollment year. Enrollees choose health exchange plans based on the formulary status of a necessary therapy. Not only can these unexpected formulary changes be extremely financially burdensome, a change in prescription drug availability could result in serious medical problems for the enrollee.
Legislative history
2016: S.5382-A, Referred to Insurance
Fiscal implications
None.
Effective date
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.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.