This article shall apply to health insurance and employee benefit plans providing for pharmaceutical services, including without limitation, prescription drugs.

As used in this article, the following terms shall have the respective meanings herein set forth, unless the context shall otherwise require:

(1) ALABAMA INSURANCE CODE. Title 27 of the Code of Alabama 1975.

(2) INSURER. Such term shall have the meaning ascribed in Section 27-1-2.

(3) PERSON. Such term shall have the meaning ascribed in Section 27-1-2.

(4) COMMISSIONER and DEPARTMENT. Such terms, respectively, shall have the meanings ascribed in Section 27-1-2.

(5) CONTRACTUAL OBLIGATION. Any obligation under covered policies or employee benefit plans.

(6) COVERED POLICY OR PLAN. Any policy, employee benefit plan or contract within the scope of this article.

(7) HEALTH INSURANCE POLICY. Any individual, group, blanket, or franchise insurance policy, insurance agreement, or group hospital service contract providing for pharmaceutical services, including without limitation, prescription drugs, incurred as a result of accident or sickness, or to prevent same.

(8) EMPLOYEE BENEFIT PLAN. Any plan, fund, or program heretofore or hereafter established or maintained by an employer or an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, pharmaceutical services, including without limitation, prescription drugs.

(9) PHARMACIST. Any person licensed by the Alabama State Board of Pharmacy to practice the profession of pharmacy in the State of Alabama and whose license is in good standing.

(10) PHARMACY. A place licensed by the Alabama State Board of Pharmacy in which prescriptions, drugs, medicines, chemicals and poisons are sold, offered for sale, compounded or dispensed, and shall include all places whose title may imply the sale, offering for sale, compounding or dispensing of prescriptions, drugs, medicines, chemicals or poisons.

(11) PHARMACEUTICAL SERVICES. Services ordinarily and customarily rendered by a pharmacy or pharmacist, including without limitation, the dispensing of prescriptions, drugs, medicines, chemicals or poisons.

(12) DRUGS. All medical substances, preparations and devices recognized by the United States Pharmacopoeia and National Formulary, or any revision thereof, and all substances and preparations intended for external and internal use in the cure, diagnosis, mitigation, treatment or prevention of disease in man or animal and all substances and preparations other than food intended to affect the structure or any function of the body of man or animal.

(13) PRESCRIPTION. Any order for drug or medical supplies, written or signed or transmitted by word of mouth, telephone, telegraph, closed circuit, television or other means of communication by a legally competent practitioner, licensed by law to prescribe and administer such drugs and medical supplies intended to be filled, compounded or dispensed by a pharmacist.

No insurance company, health maintenance organization (HMO), employer or organization offering a pharmaceutical prescription program to their employees or members in Alabama, shall enter into an agreement for services until they have obtained written verification that the provider pharmacies are registered with the Alabama State Board of Pharmacy. Such verification must be filed with the Alabama Department of Insurance within 10 days of initiating such agreement. Said department shall provide a copy of the verification to the Alabama State Board of Pharmacy. Failure to comply with such verification requirement shall result in a fine to the sponsor of such prescription program, of $100.00 per day, from the date that such agreement was signed until such verification requirement is satisfied.

No health insurance policy or employee benefit plan which is delivered, renewed, issued for delivery, or otherwise contracted for in this state shall:

(1) Prevent any person who is a party to or beneficiary of any such health insurance policy or employee benefit plan from selecting the pharmacy or pharmacist of his choice to furnish the pharmaceutical services, including without limitation, prescription drugs, offered by said policy or plan or interfere with said selection provided the pharmacy or pharmacist is licensed to furnish such pharmaceutical services in this state; or

(2) Deny any pharmacy or pharmacist the right to participate as a contracting provider for such policy or plan provided the pharmacist is licensed to furnish pharmaceutical services, including without limitation, prescription drugs offered by said policy or plan.

Any provision in a health insurance policy or employee benefit plan which is delivered, renewed, issued for delivery, or otherwise contracted for in this state which is contrary to this article shall to the extent of such conflict be void.

The provisions of this article do not mandate that any type of benefits for pharmaceutical services, including without limitation, prescription drugs, be provided by a health insurance policy or an employee benefit plan.

It shall be unlawful for any insurer or any person to provide any health insurance policy or employee benefit plan providing for pharmaceutical services, including without limitation, prescription drugs, that does not conform to the provisions of this article.

The Commissioner of Insurance shall not approve for sale in this state any health insurance policy or employee benefit plan providing for pharmaceutical services, including without limitation, prescription drugs, which does not conform to the provisions of this article or to the provisions of Sections 27-14-8 and 27-14-9.

It shall be the duty and responsibility of the Commissioner of Insurance to enforce the provisions of this article.

Each willful violation of the provisions of this article shall be punishable as provided in Section 27-1-12.