Relating to applicability of certain prescription drug insurance laws to health benefit plans and pharmacy benefit managers.
Summary
SB 1122 would expand and clarify how certain prescription drug insurance provisions in the Insurance Code apply to health benefit plans and pharmacy benefit managers (PBMs). The bill states that, unless a subchapter expressly excludes a plan, a PBM must comply with the subchapter’s requirements for each health benefit plan it administers. It also provides that these rules apply to health benefit plans offered to Texas residents even if the policy or contract is delivered, issued, or renewed outside Texas.
The bill further directs the commissioner of insurance to repeal any rules that conflict with the new statutory language. Its provisions would apply only to health benefit plans delivered, issued for delivery, or renewed on or after January 1, 2026, while plans already in force before that date would remain governed by prior law. The act itself would take effect September 1, 2025.
Impact
SB 1122 would amend Chapter 1369 of the Insurance Code by adding and modifying applicability language for prescription drug-related insurance requirements, strengthening statewide reach over PBMs and health benefit plans covering Texas residents. It would likely affect insurers, pharmacy benefit managers, and plan administrators by making clear that Texas law applies to covered plans regardless of where the policy was issued, and by requiring compliance with subchapter provisions unless a specific statutory exclusion applies. The bill also requires administrative rule changes to conform existing insurance rules to the new law.
Sentiment
The available legislative record suggests generally favorable committee sentiment toward the bill, as it was reported favorably out of the Senate Health & Human Services Committee by a 6-2 vote with one member present not voting. However, the bill did not advance further and was later not again placed on the intent calendar, indicating that support was not sufficient to move it through the full chamber process. No committee transcript is available, so the public record here shows support in committee but no detailed floor debate or broader consensus.
Contention
The main point of contention appears to be the bill’s expansion of Texas regulatory authority over pharmacy benefit managers and health benefit plans, especially for plans delivered or renewed outside the state but covering Texas residents. Opponents likely focused on the compliance burden for PBMs and insurers, the reach of Texas law into out-of-state contracts, and possible conflicts with existing exclusions in the Insurance Code. Supporters, by contrast, appear to have favored clearer statewide application of prescription drug insurance protections and more consistent oversight of PBM practices.
Relating to funding of excess losses and operating expenses of the Texas Windstorm Insurance Association; authorizing an assessment; authorizing a surcharge.
Relating to compensation and employment condition standards by municipal charter or collective bargaining agreement and to impasse resolution in collective bargaining with certain political subdivisions.