FAQs About Pharmacy Benefit Manager Licensing in New York
Pharmacy benefit managers (PBM) must be licensed by the Department of Financial Services to operate in New York.
Learn more about how the Department regulates PBMs on our PBM Licensing page.
How do I determine whether 50% or more of the beneficiaries of a health plan work or reside in New York?
A beneficiary of a health plan is considered a New York beneficiary (i.e., someone who works or resides in New York) for purposes of Insurance Law Article 29, Public Health Law section 280-a, and the applicable regulations promulgated thereunder, when any of the following are true:
- The health plan is issued by an insurance company that is an authorized insurer under the insurance law, a company organized pursuant to article forty-three of the insurance law, a municipal cooperative health benefit plan established pursuant to article forty-seven of the insurance law, an entity certified pursuant to article forty-four of the public health law, an institution of higher education certified pursuant to section one thousand one hundred twenty-four of the insurance law, the state insurance fund, or the New York state health insurance plan established under article eleven of the civil service law,
- The beneficiary’s primary participant of the health plan has or had access to that health plan as a result of working in New York, or
- The beneficiary resides in New York.
For purposes of calculating the total number of beneficiaries under a health plan, each primary participant of the health plan and all beneficiaries under each primary participant should be counted as beneficiaries for purposes of calculating the total number of New York and non-New York beneficiaries under the health plan.
Once you have determined which beneficiaries are considered New York beneficiaries, you can then calculate what percentage of the total beneficiaries work or reside in New York.
Is an entity that provides PBM services exclusively in the workers’ compensation industry required to obtain a license?
Yes. Workers’ compensation plans provide benefits which include payment for prescription drugs. Therefore, the broad definition of health plan in the law which includes any policy or plan that provides prescription drug coverage includes workers’ compensation plans. PBMs that provide services only for workers’ compensation plans in New York must obtain a license.
Is a PBM that provides services exclusively for self-insured plans required to obtain a license?
Yes. Self-insured plans are health plans under the statute, therefore an entity that provides PBM services to a self-insured health plan must obtain a license.
Is a PBM that provides services exclusively for Medicare Part D plans required to obtain a license?
Yes, the term “health plan” covers Medicare Part D plans.
Who can enforce the violation, penalty and damages provision of Insurance Law § 2905(b)?
The superintendent is authorized to enforce the violations, penalty, and damages provision located in § 2905(b) of the Insurance Law after notice and a hearing. This provision does not create a private cause of action.