[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6703 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 6703
To ensure access to affordable health insurance.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 15, 2025
Mrs. Miller-Meeks introduced the following bill; which was referred to
the Committee on Energy and Commerce, and in addition to the Committees
on Education and Workforce, and Ways and Means, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To ensure access to affordable health insurance.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Lower Health Care Premiums for All
Americans Act''.
TITLE I--IMPROVING HEALTH CARE OPTIONS FOR WORKERS
SEC. 101. ASSOCIATION HEALTH PLANS.
(a) Treatment of Group or Association of Employers.--Section 3(5)
of the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1002(5)) is amended by inserting after ``capacity'' the following:
``(including, for the purpose of establishing or maintaining a group
health plan, a group or association of employers that satisfies the
requirements of section 736(a))''.
(b) Rules Applicable to Group Health Plans Established and
Maintained by a Group or Association of Employers.--
(1) In general.--Part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1181, et seq.) is amended by adding at the end the following:
``SEC. 736. RULES APPLICABLE TO GROUP HEALTH PLANS ESTABLISHED AND
MAINTAINED BY A GROUP OR ASSOCIATION OF EMPLOYERS.
``(a) Association Health Plans.--A group or association of
employers may maintain a group health plan, regardless of whether the
employers composing such group or association are in the same industry,
trade, or profession, if such group or association satisfies the
following requirements:
``(1) Group or association requirements.--The group or
association of employers--
``(A) shall--
``(i) have been formed and maintained in
good faith for purposes other than providing
health insurance coverage through a group
health plan;
``(ii) establish a governing board or
another indicator of formality as described in
paragraph (2); and
``(iii) have existed for at least 2 years
prior to offering a group health plan to the
employees of such group or association; and
``(iv) make health insurance coverage under
the group health plan offered by such group or
association available--
``(I) to at least 51 employees; and
``(II) to all employees of the
employer members, and any dependents of
such employees;
``(B) may only provide health insurance coverage
through the group health plan of the group or
association--
``(i) to an employee of an employer member
of the group or association or a dependent of
such an employee; or
``(ii) as necessary to comply with part 6;
``(C) may include a health insurance issuer as an
employer member, except that the group or association
may not--
``(i) be a health insurance issuer; or
``(ii) be controlled or owned by a health
insurance issuer (or a subsidiary or affiliate
of a health insurance issuer).
``(D) may not condition the membership of an
employer in the group or association on any health
status-related factor (as described in section
702(a)(1)) relating to any employee or dependent of any
employee of any employer member.
``(2) Organizational requirements.--
``(A) Governing board or formal organization of the
group or association.--
``(i) In general.--The group or association
shall have--
``(I) a formal organizational
structure with a governing board and
by-laws; or
``(II) another structure or
indicator of formality.
``(ii) Requirement.--Both structures
described in subclauses (I) and (II) of clause
(i) shall comply with the requirements
described in subparagraph (B).
``(B) Formal organization structure of group or
association.--
``(i) In general.--The functions and
activities of the group or association shall be
controlled by the employer members in substance
and in fact.
``(ii) Control.--The control described in
clause (i) shall be satisfied so long as at
least 75 percent of the positions on the board
or other formal organizational structure are
held by employer members.
``(iii) Elections.--Each position of the
governing board or other formal organizational
structure shall be subject to scheduled
elections, as determined by the group or
association, and each employer-member shall be
able to cast only one vote in each such
election.
``(C) Group health plan requirements.--
``(i) Control.--The group health plan shall
be controlled in substance and in fact by
employer members participating in the group
health plan.
``(ii) Eligibility verification.--A plan
fiduciary shall verify, on a regular basis and
pursuant to reasonable monitoring procedures as
established by the plan fiduciary, whether an
individual is a self-employed individual if
such individual (or a beneficiary thereof)
participates in the group health plan on the
basis that such individual is a self-employed
individual.
``(iii) Ineligible self-employed
individuals.--
``(I) In general.--Subject to
subclause (II) and except as required
under part 6, in the case that the plan
fiduciary determines that an individual
who participates in the group health
plan no longer meets the requirements
under a self-employed individual during
a plan year, the group health plan
shall not make health insurance
coverage available to such individual
for any plan year following the plan
year in which such determination was
made.
``(II) Remedial action.--If, after
the plan fiduciary determines that an
individual described in clause (i) is
not a self-employed individual, the
individual furnishes to the plan
fiduciary evidence proving that such
individual is a self-employed
individual, such individual shall be
eligible to participate in the group
health plan.
``(3) Discrimination and pre-existing condition
protections.--A group health plan established and maintained by
the group or association of employers under this section may
not--
``(A) establish any rule for eligibility (including
continued eligibility) of any individual (including an
employee of an employer member or a self-employed
individual, or a dependent of such employee or self-
employed individual) to enroll for benefits under the
terms of the plan that discriminates based on any
health status-related factor that relates to such
individual (consistent with the rules under section
702(a)(1));
``(B) require an individual (including an employee
of an employer member or a self-employed individual, or
a dependent of such employee or self-employed
individual), as a condition of enrollment or continued
enrollment under the plan, to pay a premium or
contribution that is greater than the premium or
contribution for a similarly situated individual
enrolled in the plan based on any health status-related
factor that relates to such individual (consistent with
the rules under section 702(b)(1)); and
``(C) deny coverage under such plan on the basis of
a pre-existing condition (consistent with the rules
under section 2704 of the Public Health Service Act).
``(b) Premium Rates for a Group or Association of Employers.--
``(1) In general.--A group health plan established and
maintained by a group or association of employers that meets
that requirements of this section may, to the extent not
prohibited under State law--
``(A) establish base premium rates formed on an
actuarially sound, modified community rating
methodology that considers the pooling of all plan
participant claims; and
``(B) utilize the specific risk profile of each
employer member of such group or association to
determine contribution rates for each such employer
member's share of a premium by actuarially adjusting
the established base premium rates.
``(2) Only self employed individuals.--In the case that a
group or association is composed only of self-employed
individuals, the group health plan established by such group or
association shall--
``(A) treat all such self-employed individuals as a
single risk pool;
``(B) pool all plan participant claims; and
``(C) charge each plan participant the same premium
rate.
``(c) Treatment of Self-Employed Individuals.--For purposes of this
section, an individual who is a self-employed individual shall be
treated as--
``(1) an employer who may be a member of a group or
association of employers;
``(2) an employee who may participate in a group health
plan established and maintained by such group or association;
and
``(3) a participant of the group health plan in which the
individual participates, subject to the eligibility
determination and monitoring requirements set forth in
subsection (a)(2)(C)(i).
``(d) Determination of Employer or Joint Employer Status.--The
provision of health insurance coverage by a group or association of
employers may not be construed as evidence for establishing an employer
or joint employer relationship under any Federal or State law.
``(e) Rules of Construction.--
``(1) No exemption from phsa.--Nothing in this section
shall be construed to exempt a group health plan (as defined in
section 733(a)(1)) offered through a group or association of
employers from the requirements of this part or from the
provisions of part A of title XXVII of the Public Health
Service Act as incorporated by reference into this Act through
section 715.
``(2) Prior or future guidance.--Nothing in this section
may be construed to limit or otherwise affect the ability of a
group or association of employers from establishing a single
plan multiple employer welfare arrangement as specified in any
prior or future guidance issued by the Secretary of Labor that
provides alternative pathways to qualifying as a group or
association of employer for purposes of section 3(5).
``(f) Definitions.--In this section--
``(1) Employer member.--The term `employer member' means--
``(A) an employer who is a member of such group or
association of employers and employs at least 1 common
law employee; or
``(B) a group made up solely of self-employed
individuals, within which all of the self-employed
individual members of such group or association are
aggregated together as a single employer member group,
provided that such group includes at least 20 self-
employed individual members.
``(2) Self-employed individual.--The term `self-employed
individual' means an individual who--
``(A) does not have any common law employees;
``(B) has a bona fide ownership right in a trade or
business, regardless of whether such trade or business
is incorporated or unincorporated;
``(C) earns a wage (as defined in section 3121(a)
of the Internal Revenue Code of 1986) or self-
employment income (as defined in section 1402(b) of
such Code) from such trade or business; and
``(D) works at least 10 hours a week, or 40 hours
per month, providing personal services to such trade or
business.''.
(2) Clerical amendment.--The table of contents is amended
by inserting after the item relating to section 734 the
following:
``735. Standardized reporting format.
``736. Rules applicable to group health plans established and
maintained by a group or association of
employers.''.
SEC. 102. CERTAIN MEDICAL STOP-LOSS INSURANCE OBTAINED BY CERTAIN PLAN
SPONSORS OF GROUP HEALTH PLANS NOT INCLUDED UNDER THE
DEFINITION OF HEALTH INSURANCE COVERAGE.
(a) In General.--Section 733(b)(1) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1191b(b)(1)) is amended by
adding at the end the following sentence: ``Such term shall not include
a stop-loss policy obtained by a self-insured group health plan or a
plan sponsor of a group health plan that self-insures the health risks
of its plan participants to reimburse the plan or sponsor for losses
that the plan or sponsor incurs in providing health or medical benefits
to such plan participants in excess of a predetermined level set forth
in the stop-loss policy obtained by such plan or sponsor.''.
(b) Effect on Other Laws.--Section 514(b) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)) is amended
by adding at the end the following:
``(10) The provisions of this title (including part 7 relating to
group health plans) shall preempt State laws insofar as they may now or
hereafter prevent an employee benefit plan that is a group health plan
from insuring against the risk of excess or unexpected health plan
claims losses.''.
SEC. 103. TREATMENT OF HEALTH REIMBURSEMENT ARRANGEMENTS INTEGRATED
WITH INDIVIDUAL MARKET COVERAGE.
(a) In General.--
(1) Treatment.--Section 9815(b) of the Internal Revenue
Code of 1986 is amended--
(A) by striking ``Exception.--Notwithstanding
subsection (a)'' and inserting the following:
``Exceptions.--
``(1) Self-insured group health plans.--Notwithstanding
subsection (a)'', and
(B) by adding at the end the following new
paragraph:
``(2) Custom health option and individual care expense
arrangements.--
``(A) In general.--For purposes of this subchapter,
a custom health option and individual care expense
arrangement shall be treated as meeting the
requirements of section 9802 and sections 2705, 2711,
2713, and 2715 of title XXVII of the Public Health
Service Act.
``(B) Custom health option and individual care
expense arrangements defined.--For purposes of this
section, the term `custom health option and individual
care expense arrangement' means a health reimbursement
arrangement--
``(i) which is an employer-provided group
health plan funded solely by employer
contributions to provide payments or
reimbursements for medical care subject to a
maximum fixed dollar amount for a period,
``(ii) under which such payments or
reimbursements may only be made for medical
care provided during periods during which the
individual is covered--
``(I) under individual health
insurance coverage (other than coverage
that consists solely of excepted
benefits), or
``(II) under part A and B of title
XVIII of the Social Security Act or
part C of such title,
``(iii) which meets the nondiscrimination
requirements of subparagraph (C),
``(iv) which meets the substantiation
requirements of subparagraph (D), and
``(v) which meets the notice requirements
of subparagraph (E).
``(C) Nondiscrimination.--
``(i) In general.--An arrangement meets the
requirements of this subparagraph if an
employer offering such arrangement to an
employee within a specified class of employee--
``(I) offers such arrangement to
all employees within such specified
class on the same terms, and
``(II) does not offer any other
group health plan (other than an
account-based group health plan or a
group health plan that consists solely
of excepted benefits) to any employees
within such specified class.
In the case of an employer who offers a group
health plan provided through health insurance
coverage in the small group market (that is
subject to section 2701 of the Public Health
Service Act) to all employees within such
specified class, subclause (II) shall not apply
to such group health plan.
``(ii) Specified class of employee.--For
purposes of this subparagraph, any of the
following may be designated as a specified
class of employee:
``(I) Full-time employees.
``(II) Part-time employees.
``(III) Salaried employees.
``(IV) Non-salaried employees.
``(V) Employees whose primary site
of employment is in the same rating
area.
``(VI) Employees who are included
in a unit of employees covered under a
collective bargaining agreement to
which the employer is subject
(determined under rules similar to the
rules of section 105(h)).
``(VII) Employees who have not met
a group health plan, or health
insurance issuer offering group health
insurance coverage, waiting period
requirement that satisfies section 2708
of the Public Health Service Act.
``(VIII) Seasonal employees.
``(IX) Employees who are
nonresident aliens and who receive no
earned income (within the meaning of
section 911(d)(2)) from the employer
which constitutes income from sources
within the United States (within the
meaning of section 861(a)(3)).
``(X) Under such rules as the
Secretary may prescribe, employees who
are hired for temporary placement with
an unrelated person that is not the
common law employer.
``(XI) Such other classes of
employees as the Secretary may
designate.
An employer may designate (in such manner as is
prescribed by the Secretary) two or more of the
classes described in the preceding subclauses
as the specified class of employees to which
the arrangement is offered for purposes of
applying this subparagraph.
``(iii) Special rule for new hires.--An
employer may designate prospectively so much of
a specified class of employees as are hired
after a date set by the employer. Such subclass
of employees shall be treated as the specified
class for purposes of applying clause (i).
``(iv) Rules for determining type of
employee.--For purposes for clause (ii), any
determination of full-time, part-time, or
seasonal employment status shall be made under
rules similar to the rules of section 105(h) or
4980H, whichever the employer elects for the
plan year. Such election shall apply with
respect to all employees of the employer for
the plan year.
``(v) Permitted variation.--For purposes of
clause (i)(I), an arrangement shall not fail to
be treated as provided on the same terms within
a specified class merely because the maximum
dollar amount of payments and reimbursements
which may be made under the terms of the
arrangement for the year with respect to each
employee within such class--
``(I) increases as additional
dependents of the employee are covered
under the arrangement, and
``(II) increases with respect to a
participant as the age of the
participant increases, but not in
excess of an amount equal to 300
percent of the lowest maximum dollar
amount with respect to such a
participant determined without regard
to age.
``(D) Substantiation requirements.--An arrangement
meets the requirements of this subparagraph if the
arrangement has reasonable procedures to substantiate--
``(i) that the participant and any
dependents are, or will be, enrolled in
coverage described in subparagraph (B)(ii) as
of the beginning of the plan year of the
arrangement (or as of the beginning of coverage
under the arrangement in the case of an
employee who first becomes eligible to
participate in the arrangement after the date
notice is given with respect to the plan under
subparagraph (E) (determined without regard to
clause (iii) thereof), and
``(ii) any requests made for payment or
reimbursement of medical care under the
arrangement and that the participant and any
dependents remain so enrolled.
``(E) Notice.--
``(i) In general.--Except as provided in
clause (iii), an arrangement meets the
requirements of this subparagraph if, under the
arrangement, each employee eligible to
participate is, not later than 60 days before
the beginning of the plan year, given written
notice of the employee's rights and obligations
under the arrangement which--
``(I) is sufficiently accurate and
comprehensive to apprise the employee
of such rights and obligations, and
``(II) is written in a manner
calculated to be understood by the
average employee eligible to
participate.
``(ii) Notice requirements.--Such notice
shall include such information as the Secretary
may by regulation prescribe.
``(iii) Notice deadline for certain
employees.--In the case of an employee--
``(I) who first becomes eligible to
participate in the arrangement after
the date notice is given with respect
to the plan under clause (i)
(determined without regard to this
clause), or
``(II) whose employer is first
established fewer than 120 days before
the beginning of the first plan year of
the arrangement,
the requirements of this subparagraph shall be
treated as met if the notice required under
clause (i) is provided not later than the date
the arrangement may take effect with respect to
such employee.''.
(2) Treatment of current rules relating to certain
arrangements.--
(A) No inference.--To the extent not inconsistent
with the amendments made by this subsection--
(i) no inference shall be made from such
amendments with respect to the rules prescribed
in the Federal Register on June 20, 2019, (84
Fed. Reg. 28888) relating to health
reimbursement arrangements and other account-
based group health plans, and
(ii) any reference to custom health option
and individual care expense arrangements shall
for purposes of such rules be treated as
including a reference to individual coverage
health reimbursement arrangements.
(B) Other conforming of rules.--The Secretary of
the Treasury, the Secretary of Health and Human
Services, and the Secretary of Labor shall modify such
rules as may be necessary to conform to the amendments
made by this subsection.
(3) Participants in choice arrangement eligible for
purchase of exchange insurance under cafeteria plan.--Section
125(f)(3) of such Code is amended by adding at the end the
following new subparagraph:
``(C) Exception for participants in choice
arrangement.--Subparagraph (A) shall not apply in the
case of an employee participating in a custom health
option and individual care expense arrangement (within
the meaning of section 9815(b)(2)) offered by the
employee's employer.''.
(4) Effective date.--The amendments made by this subsection
shall apply to plan years beginning after December 31, 2025.
(b) Inclusion of CHOICE Arrangement Permitted Benefits on W-2.--
(1) In general.--Section 6051(a) of such Code is amended by
striking ``and'' at the end of paragraph (18), by striking the
period at the end of paragraph (19) and inserting ``, and'',
and by inserting after paragraph (19) the following new
paragraph:
``(20) the total amount of permitted benefits for enrolled
individuals under a custom health option and individual care
expense arrangement (as defined in section 9815(b)(2)) with
respect to such employee.''.
(2) Effective date.--The amendment made by this subsection
shall apply to taxable years beginning after December 31, 2025.
TITLE II--LOWERING HEALTH CARE PREMIUMS FOR EVERYONE
SEC. 201. OVERSIGHT OF PHARMACY BENEFIT MANAGEMENT SERVICES.
(a) Public Health Service Act.--Title XXVII of the Public Health
Service Act (42 U.S.C. 300gg et seq.) is amended--
(1) in part D (42 U.S.C. 300gg-111 et seq.), by adding at
the end the following new section:
``SEC. 2799A-11. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT
MANAGEMENT SERVICES.
``(a) In General.--For plan years beginning on or after the date
that is 30 months after the date of enactment of this section (referred
to in this subsection and subsection (b) as the `effective date'), a
group health plan or a health insurance issuer offering group health
insurance coverage, or an entity providing pharmacy benefit management
services on behalf of such a plan or issuer, shall not enter into a
contract, including an extension or renewal of a contract, entered into
on or after the effective date, with an applicable entity unless such
applicable entity agrees to--
``(1) not limit or delay the disclosure of information to
the group health plan (including such a plan offered through a
health insurance issuer) in such a manner that prevents an
entity providing pharmacy benefit management services on behalf
of a group health plan or health insurance issuer offering
group health insurance coverage from making the reports
described in subsection (b); and
``(2) provide the entity providing pharmacy benefit
management services on behalf of a group health plan or health
insurance issuer relevant information necessary to make the
reports described in subsection (b).
``(b) Reports.--
``(1) In general.--For plan years beginning on or after the
effective date, in the case of any contract between a group
health plan or a health insurance issuer offering group health
insurance coverage offered in connection with such a plan and
an entity providing pharmacy benefit management services on
behalf of such plan or issuer, including an extension or
renewal of such a contract, entered into on or after the
effective date, the entity providing pharmacy benefit
management services on behalf of such a group health plan or
health insurance issuer, not less frequently than every 6
months (or, at the request of a group health plan, not less
frequently than quarterly, and under the same conditions,
terms, and cost of the semiannual report under this
subsection), shall submit to the group health plan a report in
accordance with this section. Each such report shall be made
available to such group health plan in plain language, in a
machine-readable format, and as the Secretary may determine,
other formats. Each such report shall include the information
described in paragraph (2).
``(2) Information described.--For purposes of paragraph
(1), the information described in this paragraph is, with
respect to drugs covered by a group health plan or group health
insurance coverage offered by a health insurance issuer in
connection with a group health plan during each reporting
period--
``(A) in the case of a group health plan that is
offered by a specified large employer or that is a
specified large plan, and is not offered as health
insurance coverage, or in the case of health insurance
coverage for which the election under paragraph (3) is
made for the applicable reporting period--
``(i) a list of drugs for which a claim was
filed and, with respect to each such drug on
such list--
``(I) the contracted compensation
paid by the group health plan or health
insurance issuer for each covered drug
(identified by the National Drug Code)
to the entity providing pharmacy
benefit management services or other
applicable entity on behalf of the
group health plan or health insurance
issuer;
``(II) the contracted compensation
paid to the pharmacy, by any entity
providing pharmacy benefit management
services or other applicable entity on
behalf of the group health plan or
health insurance issuer, for each
covered drug (identified by the
National Drug Code);
``(III) for each such claim, the
difference between the amount paid
under subclause (I) and the amount paid
under subclause (II);
``(IV) the proprietary name,
established name or proper name, and
National Drug Code;
``(V) for each claim for the drug
(including original prescriptions and
refills) and for each dosage unit of
the drug for which a claim was filed,
the type of dispensing channel used to
furnish the drug, including retail,
mail order, or specialty pharmacy;
``(VI) with respect to each drug
dispensed, for each type of dispensing
channel (including retail, mail order,
or specialty pharmacy)--
``(aa) whether such drug is
a brand name drug or a generic
drug, and--
``(AA) in the case
of a brand name drug,
the wholesale
acquisition cost,
listed as cost per days
supply and cost per
dosage unit, on the
date such drug was
dispensed; and
``(BB) in the case
of a generic drug, the
average wholesale
price, listed as cost
per days supply and
cost per dosage unit,
on the date such drug
was dispensed; and
``(bb) the total number
of--
``(AA) prescription
claims (including
original prescriptions
and refills);
``(BB) participants
and beneficiaries for
whom a claim for such
drug was filed through
the applicable
dispensing channel;
``(CC) dosage units
and dosage units per
fill of such drug; and
``(DD) days supply
of such drug per fill;
``(VII) the net price per course of
treatment or single fill, such as a 30-
day supply or 90-day supply to the plan
or coverage after rebates, fees,
alternative discounts, or other
remuneration received from applicable
entities;
``(VIII) the total amount of out-
of-pocket spending by participants and
beneficiaries on such drug, including
spending through copayments,
coinsurance, and deductibles, but not
including any amounts spent by
participants and beneficiaries on drugs
not covered under the plan or coverage,
or for which no claim is submitted
under the plan or coverage;
``(IX) the total net spending on
the drug;
``(X) the total amount received, or
expected to be received, by the plan or
issuer from any applicable entity in
rebates, fees, alternative discounts,
or other remuneration;
``(XI) the total amount received,
or expected to be received, by the
entity providing pharmacy benefit
management services, from applicable
entities, in rebates, fees, alternative
discounts, or other remuneration from
such entities--
``(aa) for claims incurred
during the reporting period;
and
``(bb) that is related to
utilization of such drug or
spending on such drug; and
``(XII) to the extent feasible,
information on the total amount of
remuneration for such drug, including
copayment assistance dollars paid,
copayment cards applied, or other
discounts provided by each drug
manufacturer (or entity administering
copayment assistance on behalf of such
drug manufacturer), to the participants
and beneficiaries enrolled in such plan
or coverage;
``(ii) a list of each therapeutic class (as
defined by the Secretary) for which a claim was
filed under the group health plan or health
insurance coverage during the reporting period,
and, with respect to each such therapeutic
class--
``(I) the total gross spending on
drugs in such class before rebates,
price concessions, alternative
discounts, or other remuneration from
applicable entities;
``(II) the net spending in such
class after such rebates, price
concessions, alternative discounts, or
other remuneration from applicable
entities;
``(III) the total amount received,
or expected to be received, by the
entity providing pharmacy benefit
management services, from applicable
entities, in rebates, fees, alternative
discounts, or other remuneration from
such entities--
``(aa) for claims incurred
during the reporting period;
and
``(bb) that is related to
utilization of drugs or drug
spending;
``(IV) the average net spending per
30-day supply and per 90-day supply by
the plan or by the issuer with respect
to such coverage and its participants
and beneficiaries, among all drugs
within the therapeutic class for which
a claim was filed during the reporting
period;
``(V) the number of participants
and beneficiaries who filled a
prescription for a drug in such class,
including the National Drug Code for
each such drug;
``(VI) if applicable, a description
of the formulary tiers and utilization
mechanisms (such as prior authorization
or step therapy) employed for drugs in
that class; and
``(VII) the total out-of-pocket
spending under the plan or coverage by
participants and beneficiaries,
including spending through copayments,
coinsurance, and deductibles, but not
including any amounts spent by
participants and beneficiaries on drugs
not covered under the plan or coverage
or for which no claim is submitted
under the plan or coverage;
``(iii) with respect to any drug for which
gross spending under the group health plan or
health insurance coverage exceeded $10,000
during the reporting period or, in the case
that gross spending under the group health plan
or coverage exceeded $10,000 during the
reporting period with respect to fewer than 50
drugs, with respect to the 50 prescription
drugs with the highest spending during the
reporting period--
``(I) a list of all other drugs in
the same therapeutic class as such
drug;
``(II) if applicable, the rationale
for the formulary placement of such
drug in that therapeutic category or
class, selected from a list of standard
rationales established by the
Secretary, in consultation with
stakeholders; and
``(III) any change in formulary
placement compared to the prior plan
year; and
``(iv) in the case that such plan or issuer
(or an entity providing pharmacy benefit
management services on behalf of such plan or
issuer) has an affiliated pharmacy or pharmacy
under common ownership, including mandatory
mail and specialty home delivery programs,
retail and mail auto-refill programs, and cost-
sharing assistance incentives funded by an
entity providing pharmacy benefit services--
``(I) an explanation of any benefit
design parameters that encourage or
require participants and beneficiaries
in the plan or coverage to fill
prescriptions at mail order, specialty,
or retail pharmacies;
``(II) the percentage of total
prescriptions dispensed by such
pharmacies to participants or
beneficiaries in such plan or coverage;
and
``(III) a list of all drugs
dispensed by such pharmacies to
participants or beneficiaries enrolled
in such plan or coverage, and, with
respect to each drug dispensed--
``(aa) the amount charged,
per dosage unit, per 30-day
supply, or per 90-day supply
(as applicable) to the plan or
issuer, and to participants and
beneficiaries;
``(bb) the median amount
charged to such plan or issuer,
and the interquartile range of
the costs, per dosage unit, per
30-day supply, and per 90-day
supply, including amounts paid
by the participants and
beneficiaries, when the same
drug is dispensed by other
pharmacies that are not
affiliated with or under common
ownership with the entity and
that are included in the
pharmacy network of such plan
or coverage;
``(cc) the lowest cost per
dosage unit, per 30-day supply
and per 90-day supply, for each
such drug, including amounts
charged to the plan or coverage
and to participants and
beneficiaries, that is
available from any pharmacy
included in the network of such
plan or coverage; and
``(dd) the net acquisition
cost per dosage unit, per 30-
day supply, and per 90-day
supply, if such drug is subject
to a maximum price discount;
and
``(B) with respect to any group health plan,
including group health insurance coverage offered in
connection with such a plan, regardless of whether the
plan or coverage is offered by a specified large
employer or whether it is a specified large plan--
``(i) a summary document for the group
health plan that includes such information
described in clauses (i) through (iv) of
subparagraph (A), as specified by the Secretary
through guidance, program instruction, or
otherwise (with no requirement of notice and
comment rulemaking), that the Secretary
determines useful to group health plans for
purposes of selecting pharmacy benefit
management services, such as an estimated net
price to group health plan and participant or
beneficiary, a cost per claim, the fee
structure or reimbursement model, and estimated
cost per participant or beneficiary;
``(ii) a summary document for plans and
issuers to provide to participants and
beneficiaries, which shall be made available to
participants or beneficiaries upon request to
their group health plan (including in the case
of group health insurance coverage offered in
connection with such a plan), that--
``(I) contains such information
described in clauses (iii), (iv), (v),
and (vi), as applicable, as specified
by the Secretary through guidance,
program instruction, or otherwise (with
no requirement of notice and comment
rulemaking) that the Secretary
determines useful to participants or
beneficiaries in better understanding
the plan or coverage or benefits under
such plan or coverage;
``(II) contains only aggregate
information; and
``(III) states that participants
and beneficiaries may request specific,
claims-level information required to be
furnished under subsection (c) from the
group health plan or health insurance
issuer;
``(iii) with respect to drugs covered by
such plan or coverage during such reporting
period--
``(I) the total net spending by the
plan or coverage for all such drugs;
``(II) the total amount received,
or expected to be received, by the plan
or issuer from any applicable entity in
rebates, fees, alternative discounts,
or other remuneration; and
``(III) to the extent feasible,
information on the total amount of
remuneration for such drugs, including
copayment assistance dollars paid,
copayment cards applied, or other
discounts provided by each drug
manufacturer (or entity administering
copayment assistance on behalf of such
drug manufacturer) to participants and
beneficiaries;
``(iv) amounts paid directly or indirectly
in rebates, fees, or any other type of
compensation (as defined in section
408(b)(2)(B)(ii)(dd)(AA) of the Employee
Retirement Income Security Act) to brokerage
firms, brokers, consultants, advisors, or any
other individual or firm, for--
``(I) the referral of the group
health plan's or health insurance
issuer's business to an entity
providing pharmacy benefit management
services, including the identity of the
recipient of such amounts;
``(II) consideration of the entity
providing pharmacy benefit management
services by the group health plan or
health insurance issuer; or
``(III) the retention of the entity
by the group health plan or health
insurance issuer;
``(v) an explanation of any benefit design
parameters that encourage or require
participants and beneficiaries in such plan or
coverage to fill prescriptions at mail order,
specialty, or retail pharmacies that are
affiliated with or under common ownership with
the entity providing pharmacy benefit
management services under such plan or
coverage, including mandatory mail and
specialty home delivery programs, retail and
mail auto-refill programs, and cost-sharing
assistance incentives directly or indirectly
funded by such entity; and
``(vi) total gross spending on all drugs
under the plan or coverage during the reporting
period.
``(3) Opt-in for group health insurance coverage offered by
a specified large employer or that is a specified large plan.--
In the case of group health insurance coverage offered in
connection with a group health plan that is offered by a
specified large employer or is a specified large plan, such
group health plan may, on an annual basis, for plan years
beginning on or after the date that is 30 months after the date
of enactment of this section, elect to require an entity
providing pharmacy benefit management services on behalf of the
health insurance issuer to submit to such group health plan a
report that includes all of the information described in
paragraph (2)(A), in addition to the information described in
paragraph (2)(B).
``(4) Privacy requirements.--
``(A) In general.--An entity providing pharmacy
benefit management services on behalf of a group health
plan or a health insurance issuer offering group health
insurance coverage shall report information under
paragraph (1) in a manner consistent with the privacy
regulations promulgated under section 13402(a) of the
Health Information Technology for Economic and Clinical
Health Act and consistent with the privacy regulations
promulgated under the Health Insurance Portability and
Accountability Act of 1996 in part 160 and subparts A
and E of part 164 of title 45, Code of Federal
Regulations (or successor regulations) (referred to in
this paragraph as the `HIPAA privacy regulations') and
shall restrict the use and disclosure of such
information according to such privacy regulations and
such HIPAA privacy regulations.
``(B) Additional requirements.--
``(i) In general.--An entity providing
pharmacy benefit management services on behalf
of a group health plan or health insurance
issuer offering group health insurance coverage
that submits a report under paragraph (1) shall
ensure that such report contains only summary
health information, as defined in section
164.504(a) of title 45, Code of Federal
Regulations (or successor regulations).
``(ii) Restrictions.--In carrying out this
subsection, a group health plan shall comply
with section 164.504(f) of title 45, Code of
Federal Regulations (or a successor
regulation), and a plan sponsor shall act in
accordance with the terms of the agreement
described in such section.
``(C) Rule of construction.--
``(i) Nothing in this section shall be
construed to modify the requirements for the
creation, receipt, maintenance, or transmission
of protected health information under the HIPAA
privacy regulations.
``(ii) Nothing in this section shall be
construed to affect the application of any
Federal or State privacy or civil rights law,
including the HIPAA privacy regulations, the
Genetic Information Nondiscrimination Act of
2008 (Public Law 110-233) (including the
amendments made by such Act), the Americans
with Disabilities Act of 1990 (42 U.S.C. 12101
et seq.), section 504 of the Rehabilitation Act
of 1973 (29 U.S.C. 794), section 1557 of the
Patient Protection and Affordable Care Act (42
U.S.C. 18116), title VI of the Civil Rights Act
of 1964 (42 U.S.C. 2000d), and title VII of the
Civil Rights Act of 1964 (42 U.S.C. 2000e).
``(D) Written notice.--Each plan year, group health
plans, including with respect to group health insurance
coverage offered in connection with a group health
plan, shall provide to each participant or beneficiary
written notice informing the participant or beneficiary
of the requirement for entities providing pharmacy
benefit management services on behalf of the group
health plan or health insurance issuer offering group
health insurance coverage to submit reports to group
health plans under paragraph (1), as applicable, which
may include incorporating such notification in plan
documents provided to the participant or beneficiary,
or providing individual notification.
``(E) Limitation to business associates.--A group
health plan receiving a report under paragraph (1) may
disclose such information only to the entity from which
the report was received or to that entity's business
associates as defined in section 160.103 of title 45,
Code of Federal Regulations (or successor regulations)
or as permitted by the HIPAA privacy regulations.
``(F) Clarification regarding public disclosure of
information.--Nothing in this section shall prevent an
entity providing pharmacy benefit management services
on behalf of a group health plan or health insurance
issuer offering group health insurance coverage, from
placing reasonable restrictions on the public
disclosure of the information contained in a report
described in paragraph (1), except that such plan,
issuer, or entity may not--
``(i) restrict disclosure of such report to
the Department of Health and Human Services,
the Department of Labor, or the Department of
the Treasury; or
``(ii) prevent disclosure for the purposes
of subsection (c), or any other public
disclosure requirement under this section.
``(G) Limited form of report.--The Secretary shall
define through rulemaking a limited form of the report
under paragraph (1) required with respect to any group
health plan established by a plan sponsor that is, or
is affiliated with, a drug manufacturer, drug
wholesaler, or other direct participant in the drug
supply chain, in order to prevent anti-competitive
behavior.
``(5) Standard format and regulations.--
``(A) In general.--Not later than 18 months after
the date of enactment of this section, the Secretary
shall specify through rulemaking a standard format for
entities providing pharmacy benefit management services
on behalf of group health plans and health insurance
issuers offering group health insurance coverage, to
submit reports required under paragraph (1).
``(B) Additional regulations.--Not later than 18
months after the date of enactment of this section, the
Secretary shall, through rulemaking, promulgate any
other final regulations necessary to implement the
requirements of this section. In promulgating such
regulations, the Secretary shall, to the extent
practicable, align the reporting requirements under
this section with the reporting requirements under
section 2799A-10.
``(c) Requirement To Provide Information to Participants or
Beneficiaries.--A group health plan, including with respect to group
health insurance coverage offered in connection with a group health
plan, upon request of a participant or beneficiary, shall provide to
such participant or beneficiary--
``(1) the summary document described in subsection
(b)(2)(B)(ii); and
``(2) the information described in subsection
(b)(2)(A)(i)(III) with respect to a claim made by or on behalf
of such participant or beneficiary.
``(d) Enforcement.--
``(1) In general.--The Secretary shall enforce this
section. The enforcement authority under this subsection shall
apply only with respect to group health plans (including group
health insurance coverage offered in connection with such a
plan) to which the requirements of subparts I and II of part A
and part D apply in accordance with section 2722, and with
respect to entities providing pharmacy benefit management
services on behalf of such plans and applicable entities
providing services on behalf of such plans.
``(2) Failure to provide information.--A group health plan,
a health insurance issuer offering group health insurance
coverage, an entity providing pharmacy benefit management
services on behalf of such a plan or issuer, or an applicable
entity providing services on behalf of such a plan or issuer
that violates subsection (a); an entity providing pharmacy
benefit management services on behalf of such a plan or issuer
that fails to provide the information required under subsection
(b); or a group health plan that fails to provide the
information required under subsection (c), shall be subject to
a civil monetary penalty in the amount of $10,000 for each day
during which such violation continues or such information is
not disclosed or reported.
``(3) False information.--A health insurance issuer, an
entity providing pharmacy benefit management services, or a
third party administrator providing services on behalf of such
issuer offered by a health insurance issuer that knowingly
provides false information under this section shall be subject
to a civil monetary penalty in an amount not to exceed $100,000
for each item of false information. Such civil monetary penalty
shall be in addition to other penalties as may be prescribed by
law.
``(4) Procedure.--The provisions of section 1128A of the
Social Security Act, other than subsections (a) and (b) and the
first sentence of subsection (c)(1) of such section shall apply
to civil monetary penalties under this subsection in the same
manner as such provisions apply to a penalty or proceeding
under such section.
``(5) Waivers.--The Secretary may waive penalties under
paragraph (2), or extend the period of time for compliance with
a requirement of this section, for an entity in violation of
this section that has made a good-faith effort to comply with
the requirements in this section.
``(e) Rule of Construction.--Nothing in this section shall be
construed to permit a health insurance issuer, group health plan,
entity providing pharmacy benefit management services on behalf of a
group health plan or health insurance issuer, or other entity to
restrict disclosure to, or otherwise limit the access of, the Secretary
to a report described in subsection (b)(1) or information related to
compliance with subsections (a), (b), (c), or (d) by such issuer, plan,
or entity.
``(f) Definitions.--In this section:
``(1) Applicable entity.--The term `applicable entity'
means--
``(A) an applicable group purchasing organization,
drug manufacturer, distributor, wholesaler, rebate
aggregator (or other purchasing entity designed to
aggregate rebates), or associated third party;
``(B) any subsidiary, parent, affiliate, or
subcontractor of a group health plan, health insurance
issuer, entity that provides pharmacy benefit
management services on behalf of such a plan or issuer,
or any entity described in subparagraph (A); or
``(C) such other entity as the Secretary may
specify through rulemaking.
``(2) Applicable group purchasing organization.--The term
`applicable group purchasing organization' means a group
purchasing organization that is affiliated with or under common
ownership with an entity providing pharmacy benefit management
services.
``(3) Contracted compensation.--The term `contracted
compensation' means the sum of any ingredient cost and
dispensing fee for a drug (inclusive of the out-of-pocket costs
to the participant or beneficiary), or another analogous
compensation structure that the Secretary may specify through
regulations.
``(4) Gross spending.--The term `gross spending', with
respect to prescription drug benefits under a group health plan
or health insurance coverage, means the amount spent by a group
health plan or health insurance issuer on prescription drug
benefits, calculated before the application of rebates, fees,
alternative discounts, or other remuneration.
``(5) Net spending.--The term `net spending', with respect
to prescription drug benefits under a group health plan or
health insurance coverage, means the amount spent by a group
health plan or health insurance issuer on prescription drug
benefits, calculated after the application of rebates, fees,
alternative discounts, or other remuneration.
``(6) Plan sponsor.--The term `plan sponsor' has the
meaning given such term in section 3(16)(B) of the Employee
Retirement Income Security Act of 1974.
``(7) Remuneration.--The term `remuneration' has the
meaning given such term by the Secretary through rulemaking,
which shall be reevaluated by the Secretary every 5 years.
``(8) Specified large employer.--The term `specified large
employer' means, in connection with a group health plan
(including group health insurance coverage offered in
connection with such a plan) established or maintained by a
single employer, with respect to a calendar year or a plan
year, as applicable, an employer who employed an average of at
least 100 employees on business days during the preceding
calendar year or plan year and who employs at least 1 employee
on the first day of the calendar year or plan year.
``(9) Specified large plan.--The term `specified large
plan' means a group health plan (including group health
insurance coverage offered in connection with such a plan)
established or maintained by a plan sponsor described in clause
(ii) or (iii) of section 3(16)(B) of the Employee Retirement
Income Security Act of 1974 that had an average of at least 100
participants on business days during the preceding calendar
year or plan year, as applicable.
``(10) Wholesale acquisition cost.--The term `wholesale
acquisition cost' has the meaning given such term in section
1847A(c)(6)(B) of the Social Security Act.''; and
(2) in section 2723 (42 U.S.C. 300gg-22)--
(A) in subsection (a)--
(i) in paragraph (1), by inserting ``(other
than section 2799A-11)'' after ``part D''; and
(ii) in paragraph (2), by inserting
``(other than section 2799A-11)'' after ``part
D''; and
(B) in subsection (b)--
(i) in paragraph (1), by inserting ``(other
than section 2799A-11)'' after ``part D'';
(ii) in paragraph (2)(A), by inserting
``(other than section 2799A-11)'' after ``part
D''; and
(iii) in paragraph (2)(C)(ii), by inserting
``(other than section 2799A-11)'' after ``part
D''.
(b) Employee Retirement Income Security Act of 1974.--
(1) In general.--Subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1021 et seq.)
is amended--
(A) in subpart B of part 7 (29 U.S.C. 1185 et
seq.), by adding at the end the following:
``SEC. 726. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT
MANAGEMENT SERVICES.
``(a) In General.--For plan years beginning on or after the date
that is 30 months after the date of enactment of this section (referred
to in this subsection and subsection (b) as the `effective date'), a
group health plan or a health insurance issuer offering group health
insurance coverage, or an entity providing pharmacy benefit management
services on behalf of such a plan or issuer, shall not enter into a
contract, including an extension or renewal of a contract, entered into
on or after the effective date, with an applicable entity unless such
applicable entity agrees to--
``(1) not limit or delay the disclosure of information to
the group health plan (including such a plan offered through a
health insurance issuer) in such a manner that prevents an
entity providing pharmacy benefit management services on behalf
of a group health plan or health insurance issuer offering
group health insurance coverage from making the reports
described in subsection (b); and
``(2) provide the entity providing pharmacy benefit
management services on behalf of a group health plan or health
insurance issuer relevant information necessary to make the
reports described in subsection (b).
``(b) Reports.--
``(1) In general.--For plan years beginning on or after the
effective date, in the case of any contract between a group
health plan or a health insurance issuer offering group health
insurance coverage offered in connection with such a plan and
an entity providing pharmacy benefit management services on
behalf of such plan or issuer, including an extension or
renewal of such a contract, entered into on or after the
effective date, the entity providing pharmacy benefit
management services on behalf of such a group health plan or
health insurance issuer, not less frequently than every 6
months (or, at the request of a group health plan, not less
frequently than quarterly, and under the same conditions,
terms, and cost of the semiannual report under this
subsection), shall submit to the group health plan a report in
accordance with this section. Each such report shall be made
available to such group health plan in plain language, in a
machine-readable format, and as the Secretary may determine,
other formats. Each such report shall include the information
described in paragraph (2).
``(2) Information described.--For purposes of paragraph
(1), the information described in this paragraph is, with
respect to drugs covered by a group health plan or group health
insurance coverage offered by a health insurance issuer in
connection with a group health plan during each reporting
period--
``(A) in the case of a group health plan that is
offered by a specified large employer or that is a
specified large plan, and is not offered as health
insurance coverage, or in the case of health insurance
coverage for which the election under paragraph (3) is
made for the applicable reporting period--
``(i) a list of drugs for which a claim was
filed and, with respect to each such drug on
such list--
``(I) the contracted compensation
paid by the group health plan or health
insurance issuer for each covered drug
(identified by the National Drug Code)
to the entity providing pharmacy
benefit management services or other
applicable entity on behalf of the
group health plan or health insurance
issuer;
``(II) the contracted compensation
paid to the pharmacy, by any entity
providing pharmacy benefit management
services or other applicable entity on
behalf of the group health plan or
health insurance issuer, for each
covered drug (identified by the
National Drug Code);
``(III) for each such claim, the
difference between the amount paid
under subclause (I) and the amount paid
under subclause (II);
``(IV) the proprietary name,
established name or proper name, and
National Drug Code;
``(V) for each claim for the drug
(including original prescriptions and
refills) and for each dosage unit of
the drug for which a claim was filed,
the type of dispensing channel used to
furnish the drug, including retail,
mail order, or specialty pharmacy;
``(VI) with respect to each drug
dispensed, for each type of dispensing
channel (including retail, mail order,
or specialty pharmacy)--
``(aa) whether such drug is
a brand name drug or a generic
drug, and--
``(AA) in the case
of a brand name drug,
the wholesale
acquisition cost,
listed as cost per days
supply and cost per
dosage unit, on the
date such drug was
dispensed; and
``(BB) in the case
of a generic drug, the
average wholesale
price, listed as cost
per days supply and
cost per dosage unit,
on the date such drug
was dispensed; and
``(bb) the total number
of--
``(AA) prescription
claims (including
original prescriptions
and refills);
``(BB) participants
and beneficiaries for
whom a claim for such
drug was filed through
the applicable
dispensing channel;
``(CC) dosage units
and dosage units per
fill of such drug; and
``(DD) days supply
of such drug per fill;
``(VII) the net price per course of
treatment or single fill, such as a 30-
day supply or 90-day supply to the plan
or coverage after rebates, fees,
alternative discounts, or other
remuneration received from applicable
entities;
``(VIII) the total amount of out-
of-pocket spending by participants and
beneficiaries on such drug, including
spending through copayments,
coinsurance, and deductibles, but not
including any amounts spent by
participants and beneficiaries on drugs
not covered under the plan or coverage,
or for which no claim is submitted
under the plan or coverage;
``(IX) the total net spending on
the drug;
``(X) the total amount received, or
expected to be received, by the plan or
issuer from any applicable entity in
rebates, fees, alternative discounts,
or other remuneration;
``(XI) the total amount received,
or expected to be received, by the
entity providing pharmacy benefit
management services, from applicable
entities, in rebates, fees, alternative
discounts, or other remuneration from
such entities--
``(aa) for claims incurred
during the reporting period;
and
``(bb) that is related to
utilization of such drug or
spending on such drug; and
``(XII) to the extent feasible,
information on the total amount of
remuneration for such drug, including
copayment assistance dollars paid,
copayment cards applied, or other
discounts provided by each drug
manufacturer (or entity administering
copayment assistance on behalf of such
drug manufacturer), to the participants
and beneficiaries enrolled in such plan
or coverage;
``(ii) a list of each therapeutic class (as
defined by the Secretary) for which a claim was
filed under the group health plan or health
insurance coverage during the reporting period,
and, with respect to each such therapeutic
class--
``(I) the total gross spending on
drugs in such class before rebates,
price concessions, alternative
discounts, or other remuneration from
applicable entities;
``(II) the net spending in such
class after such rebates, price
concessions, alternative discounts, or
other remuneration from applicable
entities;
``(III) the total amount received,
or expected to be received, by the
entity providing pharmacy benefit
management services, from applicable
entities, in rebates, fees, alternative
discounts, or other remuneration from
such entities--
``(aa) for claims incurred
during the reporting period;
and
``(bb) that is related to
utilization of drugs or drug
spending;
``(IV) the average net spending per
30-day supply and per 90-day supply by
the plan or by the issuer with respect
to such coverage and its participants
and beneficiaries, among all drugs
within the therapeutic class for which
a claim was filed during the reporting
period;
``(V) the number of participants
and beneficiaries who filled a
prescription for a drug in such class,
including the National Drug Code for
each such drug;
``(VI) if applicable, a description
of the formulary tiers and utilization
mechanisms (such as prior authorization
or step therapy) employed for drugs in
that class; and
``(VII) the total out-of-pocket
spending under the plan or coverage by
participants and beneficiaries,
including spending through copayments,
coinsurance, and deductibles, but not
including any amounts spent by
participants and beneficiaries on drugs
not covered under the plan or coverage
or for which no claim is submitted
under the plan or coverage;
``(iii) with respect to any drug for which
gross spending under the group health plan or
health insurance coverage exceeded $10,000
during the reporting period or, in the case
that gross spending under the group health plan
or coverage exceeded $10,000 during the
reporting period with respect to fewer than 50
drugs, with respect to the 50 prescription
drugs with the highest spending during the
reporting period--
``(I) a list of all other drugs in
the same therapeutic class as such
drug;
``(II) if applicable, the rationale
for the formulary placement of such
drug in that therapeutic category or
class, selected from a list of standard
rationales established by the
Secretary, in consultation with
stakeholders; and
``(III) any change in formulary
placement compared to the prior plan
year; and
``(iv) in the case that such plan or issuer
(or an entity providing pharmacy benefit
management services on behalf of such plan or
issuer) has an affiliated pharmacy or pharmacy
under common ownership, including mandatory
mail and specialty home delivery programs,
retail and mail auto-refill programs, and cost
sharing assistance incentives funded by an
entity providing pharmacy benefit services--
``(I) an explanation of any benefit
design parameters that encourage or
require participants and beneficiaries
in the plan or coverage to fill
prescriptions at mail order, specialty,
or retail pharmacies;
``(II) the percentage of total
prescriptions dispensed by such
pharmacies to participants or
beneficiaries in such plan or coverage;
and
``(III) a list of all drugs
dispensed by such pharmacies to
participants or beneficiaries enrolled
in such plan or coverage, and, with
respect to each drug dispensed--
``(aa) the amount charged,
per dosage unit, per 30-day
supply, or per 90-day supply
(as applicable) to the plan or
issuer, and to participants and
beneficiaries;
``(bb) the median amount
charged to such plan or issuer,
and the interquartile range of
the costs, per dosage unit, per
30-day supply, and per 90-day
supply, including amounts paid
by the participants and
beneficiaries, when the same
drug is dispensed by other
pharmacies that are not
affiliated with or under common
ownership with the entity and
that are included in the
pharmacy network of such plan
or coverage;
``(cc) the lowest cost per
dosage unit, per 30-day supply
and per 90-day supply, for each
such drug, including amounts
charged to the plan or coverage
and to participants and
beneficiaries, that is
available from any pharmacy
included in the network of such
plan or coverage; and
``(dd) the net acquisition
cost per dosage unit, per 30-
day supply, and per 90-day
supply, if such drug is subject
to a maximum price discount;
and
``(B) with respect to any group health plan,
including group health insurance coverage offered in
connection with such a plan, regardless of whether the
plan or coverage is offered by a specified large
employer or whether it is a specified large plan--
``(i) a summary document for the group
health plan that includes such information
described in clauses (i) through (iv) of
subparagraph (A), as specified by the Secretary
through guidance, program instruction, or
otherwise (with no requirement of notice and
comment rulemaking), that the Secretary
determines useful to group health plans for
purposes of selecting pharmacy benefit
management services, such as an estimated net
price to group health plan and participant or
beneficiary, a cost per claim, the fee
structure or reimbursement model, and estimated
cost per participant or beneficiary;
``(ii) a summary document for plans and
issuers to provide to participants and
beneficiaries, which shall be made available to
participants or beneficiaries upon request to
their group health plan (including in the case
of group health insurance coverage offered in
connection with such a plan), that--
``(I) contains such information
described in clauses (iii), (iv), (v),
and (vi), as applicable, as specified
by the Secretary through guidance,
program instruction, or otherwise (with
no requirement of notice and comment
rulemaking) that the Secretary
determines useful to participants or
beneficiaries in better understanding
the plan or coverage or benefits under
such plan or coverage;
``(II) contains only aggregate
information; and
``(III) states that participants
and beneficiaries may request specific,
claims-level information required to be
furnished under subsection (c) from the
group health plan or health insurance
issuer;
``(iii) with respect to drugs covered by
such plan or coverage during such reporting
period--
``(I) the total net spending by the
plan or coverage for all such drugs;
``(II) the total amount received,
or expected to be received, by the plan
or issuer from any applicable entity in
rebates, fees, alternative discounts,
or other remuneration; and
``(III) to the extent feasible,
information on the total amount of
remuneration for such drugs, including
copayment assistance dollars paid,
copayment cards applied, or other
discounts provided by each drug
manufacturer (or entity administering
copayment assistance on behalf of such
drug manufacturer) to participants and
beneficiaries;
``(iv) amounts paid directly or indirectly
in rebates, fees, or any other type of
compensation (as defined in section
408(b)(2)(B)(ii)(dd)(AA)) to brokerage firms,
brokers, consultants, advisors, or any other
individual or firm, for--
``(I) the referral of the group
health plan's or health insurance
issuer's business to an entity
providing pharmacy benefit management
services, including the identity of the
recipient of such amounts;
``(II) consideration of the entity
providing pharmacy benefit management
services by the group health plan or
health insurance issuer; or
``(III) the retention of the entity
by the group health plan or health
insurance issuer;
``(v) an explanation of any benefit design
parameters that encourage or require
participants and beneficiaries in such plan or
coverage to fill prescriptions at mail order,
specialty, or retail pharmacies that are
affiliated with or under common ownership with
the entity providing pharmacy benefit
management services under such plan or
coverage, including mandatory mail and
specialty home delivery programs, retail and
mail auto-refill programs, and cost-sharing
assistance incentives directly or indirectly
funded by such entity; and
``(vi) total gross spending on all drugs
under the plan or coverage during the reporting
period.
``(3) Opt-in for group health insurance coverage offered by
a specified large employer or that is a specified large plan.--
In the case of group health insurance coverage offered in
connection with a group health plan that is offered by a
specified large employer or is a specified large plan, such
group health plan may, on an annual basis, for plan years
beginning on or after the date that is 30 months after the date
of enactment of this section, elect to require an entity
providing pharmacy benefit management services on behalf of the
health insurance issuer to submit to such group health plan a
report that includes all of the information described in
paragraph (2)(A), in addition to the information described in
paragraph (2)(B).
``(4) Privacy requirements.--
``(A) In general.--An entity providing pharmacy
benefit management services on behalf of a group health
plan or a health insurance issuer offering group health
insurance coverage shall report information under
paragraph (1) in a manner consistent with the privacy
regulations promulgated under section 13402(a) of the
Health Information Technology for Economic and Clinical
Health Act (42 U.S.C. 17932(a)) and consistent with the
privacy regulations promulgated under the Health
Insurance Portability and Accountability Act of 1996 in
part 160 and subparts A and E of part 164 of title 45,
Code of Federal Regulations (or successor regulations)
(referred to in this paragraph as the `HIPAA privacy
regulations') and shall restrict the use and disclosure
of such information according to such privacy
regulations and such HIPAA privacy regulations.
``(B) Additional requirements.--
``(i) In general.--An entity providing
pharmacy benefit management services on behalf
of a group health plan or health insurance
issuer offering group health insurance coverage
that submits a report under paragraph (1) shall
ensure that such report contains only summary
health information, as defined in section
164.504(a) of title 45, Code of Federal
Regulations (or successor regulations).
``(ii) Restrictions.--In carrying out this
subsection, a group health plan shall comply
with section 164.504(f) of title 45, Code of
Federal Regulations (or a successor
regulation), and a plan sponsor shall act in
accordance with the terms of the agreement
described in such section.
``(C) Rule of construction.--
``(i) Nothing in this section shall be
construed to modify the requirements for the
creation, receipt, maintenance, or transmission
of protected health information under the HIPAA
privacy regulations.
``(ii) Nothing in this section shall be
construed to affect the application of any
Federal or State privacy or civil rights law,
including the HIPAA privacy regulations, the
Genetic Information Nondiscrimination Act of
2008 (Public Law 110-233) (including the
amendments made by such Act), the Americans
with Disabilities Act of 1990 (42 U.S.C. 12101
et seq.), section 504 of the Rehabilitation Act
of 1973 (29 U.S.C. 794), section 1557 of the
Patient Protection and Affordable Care Act (42
U.S.C. 18116), title VI of the Civil Rights Act
of 1964 (42 U.S.C. 2000d), and title VII of the
Civil Rights Act of 1964 (42 U.S.C. 2000e).
``(D) Written notice.--Each plan year, group health
plans, including with respect to group health insurance
coverage offered in connection with a group health
plan, shall provide to each participant or beneficiary
written notice informing the participant or beneficiary
of the requirement for entities providing pharmacy
benefit management services on behalf of the group
health plan or health insurance issuer offering group
health insurance coverage to submit reports to group
health plans under paragraph (1), as applicable, which
may include incorporating such notification in plan
documents provided to the participant or beneficiary,
or providing individual notification.
``(E) Limitation to business associates.--A group
health plan receiving a report under paragraph (1) may
disclose such information only to the entity from which
the report was received or to that entity's business
associates as defined in section 160.103 of title 45,
Code of Federal Regulations (or successor regulations)
or as permitted by the HIPAA privacy regulations.
``(F) Clarification regarding public disclosure of
information.--Nothing in this section shall prevent an
entity providing pharmacy benefit management services
on behalf of a group health plan or health insurance
issuer offering group health insurance coverage, from
placing reasonable restrictions on the public
disclosure of the information contained in a report
described in paragraph (1), except that such plan,
issuer, or entity may not--
``(i) restrict disclosure of such report to
the Department of Health and Human Services,
the Department of Labor, or the Department of
the Treasury; or
``(ii) prevent disclosure for the purposes
of subsection (c), or any other public
disclosure requirement under this section.
``(G) Limited form of report.--The Secretary shall
define through rulemaking a limited form of the report
under paragraph (1) required with respect to any group
health plan established by a plan sponsor that is, or
is affiliated with, a drug manufacturer, drug
wholesaler, or other direct participant in the drug
supply chain, in order to prevent anti-competitive
behavior.
``(5) Standard format and regulations.--
``(A) In general.--Not later than 18 months after
the date of enactment of this section, the Secretary
shall specify through rulemaking a standard format for
entities providing pharmacy benefit management services
on behalf of group health plans and health insurance
issuers offering group health insurance coverage, to
submit reports required under paragraph (1).
``(B) Additional regulations.--Not later than 18
months after the date of enactment of this section, the
Secretary shall, through rulemaking, promulgate any
other final regulations necessary to implement the
requirements of this section. In promulgating such
regulations, the Secretary shall, to the extent
practicable, align the reporting requirements under
this section with the reporting requirements under
section 725.
``(c) Requirement To Provide Information to Participants or
Beneficiaries.--A group health plan, including with respect to group
health insurance coverage offered in connection with a group health
plan, upon request of a participant or beneficiary, shall provide to
such participant or beneficiary--
``(1) the summary document described in subsection
(b)(2)(B)(ii); and
``(2) the information described in subsection
(b)(2)(A)(i)(III) with respect to a claim made by or on behalf
of such participant or beneficiary.
``(d) Rule of Construction.--Nothing in this section shall be
construed to permit a health insurance issuer, group health plan,
entity providing pharmacy benefit management services on behalf of a
group health plan or health insurance issuer, or other entity to
restrict disclosure to, or otherwise limit the access of, the Secretary
to a report described in subsection (b)(1) or information related to
compliance with subsections (a), (b), or (c) of this section or section
502(c)(13) by such issuer, plan, or entity.
``(e) Definitions.--In this section:
``(1) Applicable entity.--The term `applicable entity'
means--
``(A) an applicable group purchasing organization,
drug manufacturer, distributor, wholesaler, rebate
aggregator (or other purchasing entity designed to
aggregate rebates), or associated third party;
``(B) any subsidiary, parent, affiliate, or
subcontractor of a group health plan, health insurance
issuer, entity that provides pharmacy benefit
management services on behalf of such a plan or issuer,
or any entity described in subparagraph (A); or
``(C) such other entity as the Secretary may
specify through rulemaking.
``(2) Applicable group purchasing organization.--The term
`applicable group purchasing organization' means a group
purchasing organization that is affiliated with or under common
ownership with an entity providing pharmacy benefit management
services.
``(3) Contracted compensation.--The term `contracted
compensation' means the sum of any ingredient cost and
dispensing fee for a drug (inclusive of the out-of-pocket costs
to the participant or beneficiary), or another analogous
compensation structure that the Secretary may specify through
regulations.
``(4) Gross spending.--The term `gross spending', with
respect to prescription drug benefits under a group health plan
or health insurance coverage, means the amount spent by a group
health plan or health insurance issuer on prescription drug
benefits, calculated before the application of rebates, fees,
alternative discounts, or other remuneration.
``(5) Net spending.--The term `net spending', with respect
to prescription drug benefits under a group health plan or
health insurance coverage, means the amount spent by a group
health plan or health insurance issuer on prescription drug
benefits, calculated after the application of rebates, fees,
alternative discounts, or other remuneration.
``(6) Plan sponsor.--The term `plan sponsor' has the
meaning given such term in section 3(16)(B).
``(7) Remuneration.--The term `remuneration' has the
meaning given such term by the Secretary through rulemaking,
which shall be reevaluated by the Secretary every 5 years.
``(8) Specified large employer.--The term `specified large
employer' means, in connection with a group health plan
(including group health insurance coverage offered in
connection with such a plan) established or maintained by a
single employer, with respect to a calendar year or a plan
year, as applicable, an employer who employed an average of at
least 100 employees on business days during the preceding
calendar year or plan year and who employs at least 1 employee
on the first day of the calendar year or plan year.
``(9) Specified large plan.--The term `specified large
plan' means a group health plan (including group health
insurance coverage offered in connection with such a plan)
established or maintained by a plan sponsor described in clause
(ii) or (iii) of section 3(16)(B) that had an average of at
least 100 participants on business days during the preceding
calendar year or plan year, as applicable.
``(10) Wholesale acquisition cost.--The term `wholesale
acquisition cost' has the meaning given such term in section
1847A(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
3a(c)(6)(B)).'';
(B) in section 502 (29 U.S.C. 1132)--
(i) in subsection (a)(6), by striking ``or
(9)'' and inserting ``(9), or (13)'';
(ii) in subsection (b)(3), by striking
``under subsection (c)(9)'' and inserting
``under paragraphs (9) and (13) of subsection
(c)''; and
(iii) in subsection (c), by adding at the
end the following:
``(13) Secretarial enforcement authority relating to
oversight of pharmacy benefit management services.--
``(A) Failure to provide information.--The
Secretary may impose a penalty against a plan
administrator of a group health plan, a health
insurance issuer offering group health insurance
coverage, or an entity providing pharmacy benefit
management services on behalf of such a plan or issuer,
or an applicable entity (as defined in section 726(f))
that violates section 726(a); an entity providing
pharmacy benefit management services on behalf of such
a plan or issuer that fails to provide the information
required under section 726(b); or any person who causes
a group health plan to fail to provide the information
required under section 726(c), in the amount of $10,000
for each day during which such violation continues or
such information is not disclosed or reported.
``(B) False information.--The Secretary may impose
a penalty against a plan administrator of a group
health plan, a health insurance issuer offering group
health insurance coverage, an entity providing pharmacy
benefit management services, or an applicable entity
(as defined in section 726(f)) that knowingly provides
false information under section 726, in an amount not
to exceed $100,000 for each item of false information.
Such penalty shall be in addition to other penalties as
may be prescribed by law.
``(C) Waivers.--The Secretary may waive penalties
under subparagraph (A), or extend the period of time
for compliance with a requirement of this section, for
an entity in violation of section 726 that has made a
good-faith effort to comply with the requirements of
section 726.''; and
(C) in section 732(a) (29 U.S.C. 1191a(a)), by
striking ``section 711'' and inserting ``sections 711
and 726''.
(2) Clerical amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1001 et seq.) is amended by inserting after the item
relating to section 725 the following new item:
``Sec. 726. Oversight of entities that provide pharmacy benefit
management services.''.
(c) Internal Revenue Code of 1986.--
(1) In general.--Chapter 100 of the Internal Revenue Code
of 1986 is amended by adding at the end of subchapter B the
following:
``SEC. 9826. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT
MANAGEMENT SERVICES.
``(a) In General.--For plan years beginning on or after the date
that is 30 months after the date of enactment of this section (referred
to in this subsection and subsection (b) as the `effective date'), a
group health plan, or an entity providing pharmacy benefit management
services on behalf of such a plan, shall not enter into a contract,
including an extension or renewal of a contract, entered into on or
after the effective date, with an applicable entity unless such
applicable entity agrees to--
``(1) not limit or delay the disclosure of information to
the group health plan in such a manner that prevents an entity
providing pharmacy benefit management services on behalf of a
group health plan from making the reports described in
subsection (b); and
``(2) provide the entity providing pharmacy benefit
management services on behalf of a group health plan relevant
information necessary to make the reports described in
subsection (b).
``(b) Reports.--
``(1) In general.--For plan years beginning on or after the
effective date, in the case of any contract between a group
health plan and an entity providing pharmacy benefit management
services on behalf of such plan, including an extension or
renewal of such a contract, entered into on or after the
effective date, the entity providing pharmacy benefit
management services on behalf of such a group health plan, not
less frequently than every 6 months (or, at the request of a
group health plan, not less frequently than quarterly, and
under the same conditions, terms, and cost of the semiannual
report under this subsection), shall submit to the group health
plan a report in accordance with this section. Each such report
shall be made available to such group health plan in plain
language, in a machine-readable format, and as the Secretary
may determine, other formats. Each such report shall include
the information described in paragraph (2).
``(2) Information described.--For purposes of paragraph
(1), the information described in this paragraph is, with
respect to drugs covered by a group health plan during each
reporting period--
``(A) in the case of a group health plan that is
offered by a specified large employer or that is a
specified large plan, and is not offered as health
insurance coverage, or in the case of health insurance
coverage for which the election under paragraph (3) is
made for the applicable reporting period--
``(i) a list of drugs for which a claim was
filed and, with respect to each such drug on
such list--
``(I) the contracted compensation
paid by the group health plan for each
covered drug (identified by the
National Drug Code) to the entity
providing pharmacy benefit management
services or other applicable entity on
behalf of the group health plan;
``(II) the contracted compensation
paid to the pharmacy, by any entity
providing pharmacy benefit management
services or other applicable entity on
behalf of the group health plan, for
each covered drug (identified by the
National Drug Code);
``(III) for each such claim, the
difference between the amount paid
under subclause (I) and the amount paid
under subclause (II);
``(IV) the proprietary name,
established name or proper name, and
National Drug Code;
``(V) for each claim for the drug
(including original prescriptions and
refills) and for each dosage unit of
the drug for which a claim was filed,
the type of dispensing channel used to
furnish the drug, including retail,
mail order, or specialty pharmacy;
``(VI) with respect to each drug
dispensed, for each type of dispensing
channel (including retail, mail order,
or specialty pharmacy)--
``(aa) whether such drug is
a brand name drug or a generic
drug, and--
``(AA) in the case
of a brand name drug,
the wholesale
acquisition cost,
listed as cost per days
supply and cost per
dosage unit, on the
date such drug was
dispensed; and
``(BB) in the case
of a generic drug, the
average wholesale
price, listed as cost
per days supply and
cost per dosage unit,
on the date such drug
was dispensed; and
``(bb) the total number
of--
``(AA) prescription
claims (including
original prescriptions
and refills);
``(BB) participants
and beneficiaries for
whom a claim for such
drug was filed through
the applicable
dispensing channel;
``(CC) dosage units
and dosage units per
fill of such drug; and
``(DD) days supply
of such drug per fill;
``(VII) the net price per course of
treatment or single fill, such as a 30-
day supply or 90-day supply to the plan
after rebates, fees, alternative
discounts, or other remuneration
received from applicable entities;
``(VIII) the total amount of out-
of-pocket spending by participants and
beneficiaries on such drug, including
spending through copayments,
coinsurance, and deductibles, but not
including any amounts spent by
participants and beneficiaries on drugs
not covered under the plan, or for
which no claim is submitted under the
plan;
``(IX) the total net spending on
the drug;
``(X) the total amount received, or
expected to be received, by the plan
from any applicable entity in rebates,
fees, alternative discounts, or other
remuneration;
``(XI) the total amount received,
or expected to be received, by the
entity providing pharmacy benefit
management services, from applicable
entities, in rebates, fees, alternative
discounts, or other remuneration from
such entities--
``(aa) for claims incurred
during the reporting period;
and
``(bb) that is related to
utilization of such drug or
spending on such drug; and
``(XII) to the extent feasible,
information on the total amount of
remuneration for such drug, including
copayment assistance dollars paid,
copayment cards applied, or other
discounts provided by each drug
manufacturer (or entity administering
copayment assistance on behalf of such
drug manufacturer), to the participants
and beneficiaries enrolled in such
plan;
``(ii) a list of each therapeutic class (as
defined by the Secretary) for which a claim was
filed under the group health plan during the
reporting period, and, with respect to each
such therapeutic class--
``(I) the total gross spending on
drugs in such class before rebates,
price concessions, alternative
discounts, or other remuneration from
applicable entities;
``(II) the net spending in such
class after such rebates, price
concessions, alternative discounts, or
other remuneration from applicable
entities;
``(III) the total amount received,
or expected to be received, by the
entity providing pharmacy benefit
management services, from applicable
entities, in rebates, fees, alternative
discounts, or other remuneration from
such entities--
``(aa) for claims incurred
during the reporting period;
and
``(bb) that is related to
utilization of drugs or drug
spending;
``(IV) the average net spending per
30-day supply and per 90-day supply by
the plan and its participants and
beneficiaries, among all drugs within
the therapeutic class for which a claim
was filed during the reporting period;
``(V) the number of participants
and beneficiaries who filled a
prescription for a drug in such class,
including the National Drug Code for
each such drug;
``(VI) if applicable, a description
of the formulary tiers and utilization
mechanisms (such as prior authorization
or step therapy) employed for drugs in
that class; and
``(VII) the total out-of-pocket
spending under the plan by participants
and beneficiaries, including spending
through copayments, coinsurance, and
deductibles, but not including any
amounts spent by participants and
beneficiaries on drugs not covered
under the plan or for which no claim is
submitted under the plan;
``(iii) with respect to any drug for which
gross spending under the group health plan
exceeded $10,000 during the reporting period
or, in the case that gross spending under the
group health plan exceeded $10,000 during the
reporting period with respect to fewer than 50
drugs, with respect to the 50 prescription
drugs with the highest spending during the
reporting period--
``(I) a list of all other drugs in
the same therapeutic class as such
drug;
``(II) if applicable, the rationale
for the formulary placement of such
drug in that therapeutic category or
class, selected from a list of standard
rationales established by the
Secretary, in consultation with
stakeholders; and
``(III) any change in formulary
placement compared to the prior plan
year; and
``(iv) in the case that such plan (or an
entity providing pharmacy benefit management
services on behalf of such plan) has an
affiliated pharmacy or pharmacy under common
ownership, including mandatory mail and
specialty home delivery programs, retail and
mail auto-refill programs, and cost sharing
assistance incentives funded by an entity
providing pharmacy benefit services--
``(I) an explanation of any benefit
design parameters that encourage or
require participants and beneficiaries
in the plan to fill prescriptions at
mail order, specialty, or retail
pharmacies;
``(II) the percentage of total
prescriptions dispensed by such
pharmacies to participants or
beneficiaries in such plan; and
``(III) a list of all drugs
dispensed by such pharmacies to
participants or beneficiaries enrolled
in such plan, and, with respect to each
drug dispensed--
``(aa) the amount charged,
per dosage unit, per 30-day
supply, or per 90-day supply
(as applicable) to the plan,
and to participants and
beneficiaries;
``(bb) the median amount
charged to such plan, and the
interquartile range of the
costs, per dosage unit, per 30-
day supply, and per 90-day
supply, including amounts paid
by the participants and
beneficiaries, when the same
drug is dispensed by other
pharmacies that are not
affiliated with or under common
ownership with the entity and
that are included in the
pharmacy network of such plan;
``(cc) the lowest cost per
dosage unit, per 30-day supply
and per 90-day supply, for each
such drug, including amounts
charged to the plan and to
participants and beneficiaries,
that is available from any
pharmacy included in the
network of such plan; and
``(dd) the net acquisition
cost per dosage unit, per 30-
day supply, and per 90-day
supply, if such drug is subject
to a maximum price discount;
and
``(B) with respect to any group health plan,
regardless of whether the plan is offered by a
specified large employer or whether it is a specified
large plan--
``(i) a summary document for the group
health plan that includes such information
described in clauses (i) through (iv) of
subparagraph (A), as specified by the Secretary
through guidance, program instruction, or
otherwise (with no requirement of notice and
comment rulemaking), that the Secretary
determines useful to group health plans for
purposes of selecting pharmacy benefit
management services, such as an estimated net
price to group health plan and participant or
beneficiary, a cost per claim, the fee
structure or reimbursement model, and estimated
cost per participant or beneficiary;
``(ii) a summary document for plans to
provide to participants and beneficiaries,
which shall be made available to participants
or beneficiaries upon request to their group
health plan, that--
``(I) contains such information
described in clauses (iii), (iv), (v),
and (vi), as applicable, as specified
by the Secretary through guidance,
program instruction, or otherwise (with
no requirement of notice and comment
rulemaking) that the Secretary
determines useful to participants or
beneficiaries in better understanding
the plan or benefits under such plan;
``(II) contains only aggregate
information; and
``(III) states that participants
and beneficiaries may request specific,
claims-level information required to be
furnished under subsection (c) from the
group health plan;
``(iii) with respect to drugs covered by
such plan during such reporting period--
``(I) the total net spending by the
plan for all such drugs;
``(II) the total amount received,
or expected to be received, by the plan
from any applicable entity in rebates,
fees, alternative discounts, or other
remuneration; and
``(III) to the extent feasible,
information on the total amount of
remuneration for such drugs, including
copayment assistance dollars paid,
copayment cards applied, or other
discounts provided by each drug
manufacturer (or entity administering
copayment assistance on behalf of such
drug manufacturer) to participants and
beneficiaries;
``(iv) amounts paid directly or indirectly
in rebates, fees, or any other type of
compensation (as defined in section
408(b)(2)(B)(ii)(dd)(AA) of the Employee
Retirement Income Security Act (29 U.S.C.
1108(b)(2)(B)(ii)(dd)(AA))) to brokerage firms,
brokers, consultants, advisors, or any other
individual or firm, for--
``(I) the referral of the group
health plan's business to an entity
providing pharmacy benefit management
services, including the identity of the
recipient of such amounts;
``(II) consideration of the entity
providing pharmacy benefit management
services by the group health plan; or
``(III) the retention of the entity
by the group health plan;
``(v) an explanation of any benefit design
parameters that encourage or require
participants and beneficiaries in such plan to
fill prescriptions at mail order, specialty, or
retail pharmacies that are affiliated with or
under common ownership with the entity
providing pharmacy benefit management services
under such plan, including mandatory mail and
specialty home delivery programs, retail and
mail auto-refill programs, and cost-sharing
assistance incentives directly or indirectly
funded by such entity; and
``(vi) total gross spending on all drugs
under the plan during the reporting period.
``(3) Opt-in for group health insurance coverage offered by
a specified large employer or that is a specified large plan.--
In the case of group health insurance coverage offered in
connection with a group health plan that is offered by a
specified large employer or is a specified large plan, such
group health plan may, on an annual basis, for plan years
beginning on or after the date that is 30 months after the date
of enactment of this section, elect to require an entity
providing pharmacy benefit management services on behalf of the
health insurance issuer to submit to such group health plan a
report that includes all of the information described in
paragraph (2)(A), in addition to the information described in
paragraph (2)(B).
``(4) Privacy requirements.--
``(A) In general.--An entity providing pharmacy
benefit management services on behalf of a group health
plan shall report information under paragraph (1) in a
manner consistent with the privacy regulations
promulgated under section 13402(a) of the Health
Information Technology for Economic and Clinical Health
Act (42 U.S.C. 17932(a)) and consistent with the
privacy regulations promulgated under the Health
Insurance Portability and Accountability Act of 1996 in
part 160 and subparts A and E of part 164 of title 45,
Code of Federal Regulations (or successor regulations)
(referred to in this paragraph as the `HIPAA privacy
regulations') and shall restrict the use and disclosure
of such information according to such privacy
regulations and such HIPAA privacy regulations.
``(B) Additional requirements.--
``(i) In general.--An entity providing
pharmacy benefit management services on behalf
of a group health plan that submits a report
under paragraph (1) shall ensure that such
report contains only summary health
information, as defined in section 164.504(a)
of title 45, Code of Federal Regulations (or
successor regulations).
``(ii) Restrictions.--In carrying out this
subsection, a group health plan shall comply
with section 164.504(f) of title 45, Code of
Federal Regulations (or a successor
regulation), and a plan sponsor shall act in
accordance with the terms of the agreement
described in such section.
``(C) Rule of construction.--
``(i) Nothing in this section shall be
construed to modify the requirements for the
creation, receipt, maintenance, or transmission
of protected health information under the HIPAA
privacy regulations.
``(ii) Nothing in this section shall be
construed to affect the application of any
Federal or State privacy or civil rights law,
including the HIPAA privacy regulations, the
Genetic Information Nondiscrimination Act of
2008 (Public Law 110-233) (including the
amendments made by such Act), the Americans
with Disabilities Act of 1990 (42 U.S.C. 12101
et seq.), section 504 of the Rehabilitation Act
of 1973 (29 U.S.C. 794), section 1557 of the
Patient Protection and Affordable Care Act (42
U.S.C. 18116), title VI of the Civil Rights Act
of 1964 (42 U.S.C. 2000d), and title VII of the
Civil Rights Act of 1964 (42 U.S.C. 2000e).
``(D) Written notice.--Each plan year, group health
plans shall provide to each participant or beneficiary
written notice informing the participant or beneficiary
of the requirement for entities providing pharmacy
benefit management services on behalf of the group
health plan to submit reports to group health plans
under paragraph (1), as applicable, which may include
incorporating such notification in plan documents
provided to the participant or beneficiary, or
providing individual notification.
``(E) Limitation to business associates.--A group
health plan receiving a report under paragraph (1) may
disclose such information only to the entity from which
the report was received or to that entity's business
associates as defined in section 160.103 of title 45,
Code of Federal Regulations (or successor regulations)
or as permitted by the HIPAA privacy regulations.
``(F) Clarification regarding public disclosure of
information.--Nothing in this section shall prevent an
entity providing pharmacy benefit management services
on behalf of a group health plan, from placing
reasonable restrictions on the public disclosure of the
information contained in a report described in
paragraph (1), except that such plan or entity may
not--
``(i) restrict disclosure of such report to
the Department of Health and Human Services,
the Department of Labor, or the Department of
the Treasury; or
``(ii) prevent disclosure for the purposes
of subsection (c), or any other public
disclosure requirement under this section.
``(G) Limited form of report.--The Secretary shall
define through rulemaking a limited form of the report
under paragraph (1) required with respect to any group
health plan established by a plan sponsor that is, or
is affiliated with, a drug manufacturer, drug
wholesaler, or other direct participant in the drug
supply chain, in order to prevent anti-competitive
behavior.
``(5) Standard format and regulations.--
``(A) In general.--Not later than 18 months after
the date of enactment of this section, the Secretary
shall specify through rulemaking a standard format for
entities providing pharmacy benefit management services
on behalf of group health plans, to submit reports
required under paragraph (1).
``(B) Additional regulations.--Not later than 18
months after the date of enactment of this section, the
Secretary shall, through rulemaking, promulgate any
other final regulations necessary to implement the
requirements of this section. In promulgating such
regulations, the Secretary shall, to the extent
practicable, align the reporting requirements under
this section with the reporting requirements under
section 9825.
``(c) Requirement To Provide Information to Participants or
Beneficiaries.--A group health plan, upon request of a participant or
beneficiary, shall provide to such participant or beneficiary--
``(1) the summary document described in subsection
(b)(2)(B)(ii); and
``(2) the information described in subsection
(b)(2)(A)(i)(III) with respect to a claim made by or on behalf
of such participant or beneficiary.
``(d) Rule of Construction.--Nothing in this section shall be
construed to permit a health insurance issuer, group health plan,
entity providing pharmacy benefit management services on behalf of a
group health plan or health insurance issuer, or other entity to
restrict disclosure to, or otherwise limit the access of, the Secretary
to a report described in subsection (b)(1) or information related to
compliance with subsections (a), (b), or (c) of this section or section
4980D(g) by such issuer, plan, or entity.
``(e) Definitions.--In this section:
``(1) Applicable entity.--The term `applicable entity'
means--
``(A) an applicable group purchasing organization,
drug manufacturer, distributor, wholesaler, rebate
aggregator (or other purchasing entity designed to
aggregate rebates), or associated third party;
``(B) any subsidiary, parent, affiliate, or
subcontractor of a group health plan, health insurance
issuer, entity that provides pharmacy benefit
management services on behalf of such a plan or issuer,
or any entity described in subparagraph (A); or
``(C) such other entity as the Secretary may
specify through rulemaking.
``(2) Applicable group purchasing organization.--The term
`applicable group purchasing organization' means a group
purchasing organization that is affiliated with or under common
ownership with an entity providing pharmacy benefit management
services.
``(3) Contracted compensation.--The term `contracted
compensation' means the sum of any ingredient cost and
dispensing fee for a drug (inclusive of the out-of-pocket costs
to the participant or beneficiary), or another analogous
compensation structure that the Secretary may specify through
regulations.
``(4) Gross spending.--The term `gross spending', with
respect to prescription drug benefits under a group health
plan, means the amount spent by a group health plan on
prescription drug benefits, calculated before the application
of rebates, fees, alternative discounts, or other remuneration.
``(5) Net spending.--The term `net spending', with respect
to prescription drug benefits under a group health plan, means
the amount spent by a group health plan on prescription drug
benefits, calculated after the application of rebates, fees,
alternative discounts, or other remuneration.
``(6) Plan sponsor.--The term `plan sponsor' has the
meaning given such term in section 3(16)(B) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1002(16)(B)).
``(7) Remuneration.--The term `remuneration' has the
meaning given such term by the Secretary, through rulemaking,
which shall be reevaluated by the Secretary every 5 years.
``(8) Specified large employer.--The term `specified large
employer' means, in connection with a group health plan
established or maintained by a single employer, with respect to
a calendar year or a plan year, as applicable, an employer who
employed an average of at least 100 employees on business days
during the preceding calendar year or plan year and who employs
at least 1 employee on the first day of the calendar year or
plan year.
``(9) Specified large plan.--The term `specified large
plan' means a group health plan established or maintained by a
plan sponsor described in clause (ii) or (iii) of section
3(16)(B) of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1002(16)(B)) that had an average of at least 100
participants on business days during the preceding calendar
year or plan year, as applicable.
``(10) Wholesale acquisition cost.--The term `wholesale
acquisition cost' has the meaning given such term in section
1847A(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
3a(c)(6)(B)).''.
(2) Exception for certain group health plans.--Section
9831(a)(2) of the Internal Revenue Code of 1986 is amended by
inserting ``other than with respect to section 9826,'' before
``any group health plan''.
(3) Enforcement.--Section 4980D of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
subsection:
``(g) Application to Requirements Imposed on Certain Entities
Providing Pharmacy Benefit Management Services.--In the case of any
requirement under section 9826 that applies with respect to an entity
providing pharmacy benefit management services on behalf of a group
health plan, any reference in this section to such group health plan
(and the reference in subsection (e)(1) to the employer) shall be
treated as including a reference to such entity.''.
(4) Clerical amendment.--The table of sections for
subchapter B of chapter 100 of the Internal Revenue Code of
1986 is amended by adding at the end the following new item:
``Sec. 9826. Oversight of entities that provide pharmacy benefit
management services.''.
SEC. 202. FUNDING COST SHARING REDUCTION PAYMENTS.
Section 1402 of the Patient Protection and Affordable Care Act (42
U.S.C. 18071) is amended by adding at the end the following new
subsection:
``(h) Funding.--
``(1) In general.--There are appropriated out of any monies
in the Treasury not otherwise appropriated such sums as may be
necessary for purposes of making payments under this section
for plan years beginning on or after January 1, 2027.
``(2) Limitation.--
``(A) In general.--The amounts appropriated under
paragraph (1) may not be used for purposes of making
payments under this section for a qualified health plan
that provides health benefit coverage that includes
coverage of abortion.
``(B) Exception.--Subparagraph (A) shall not apply
to payments for a qualified health plan that provides
coverage of abortion only if necessary to save the life
of the mother or if the pregnancy is a result of an act
of rape or incest.''.
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