H.R. 6501

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6501 Introduced in House (IH)]

<DOC>

119th CONGRESS
1st Session
H. R. 6501

To amend the Internal Revenue Code of 1986 to extend and modify the 
enhanced premium tax credit, to amend the Patient Protection and 
Affordable Care Act to make certain adjustments to the operation of the 
Exchanges established under such Act, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

December 9, 2025

Mr. Fitzpatrick (for himself, Mr. Golden of Maine, Mr. Bacon, Mr. 
Suozzi, Mr. Bresnahan, Mr. Davis of North Carolina, Ms. Malliotakis, 
Ms. Perez, Mr. Lawler, Ms. Salazar, Mr. Mackenzie, Mr. Kean, Mr. Van 
Drew, Mr. Valadao, Mr. Ciscomani, and Mr. LaLota) introduced the 
following bill; which was referred to the Committee on Energy and 
Commerce, and in addition to the Committees on Ways and Means, and 
Education and Workforce, 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 amend the Internal Revenue Code of 1986 to extend and modify the 
enhanced premium tax credit, to amend the Patient Protection and 
Affordable Care Act to make certain adjustments to the operation of the 
Exchanges established under such Act, and for other purposes.

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 ``Bipartisan Health Insurance 
Affordability Act''.

SEC. 2. EXTENSION AND MODIFICATION OF ENHANCED PREMIUM TAX CREDIT.

(a) Extension and Modification of Rules To Increase Premium 
Assistance Amounts.--Section 36B(b)(3)(A)(iii) of the Internal Revenue 
Code of 1986 is amended--
(1) by redesignating subclauses (I) and (II) as items (aa) 
and (bb), respectively, and adjusting the margins accordingly,
(2) by striking ``Temporary percentages for 2021 through 
2025.--In the case of'' and inserting ``Temporary rules for 
certain years.--
``(I) Before 2026.--In the case 
of'', and
(3) by adding at the end the following:
``(II) After 2025 for taxpayers 
whose household income does not exceed 
150 percent of poverty line.--In the 
case of a taxable year beginning after 
December 31, 2025, and before January 
1, 2028, if any taxpayer's household 
income does not exceed 150 percent of 
the poverty line for such taxable year, 
the premium assistance amount 
determined under subsection (b)(2), 
with respect to any coverage month, is 
the excess of the lesser of the amount 
described in paragraph (2)(A) or the 
amount described in paragraph 
(2)(B)(i), over $5.
``(III) After 2025 for taxpayers 
whose household income does not exceed 
200 percent of poverty line.--In the 
case of a taxable year beginning after 
December 31, 2025, and before January 
1, 2028, if any taxpayer's household 
income exceeds 150 percent of the 
poverty line but does not exceed 200 
percent of the poverty line for such 
taxable year, the premium assistance 
amount determined under subsection 
(b)(2), with respect to any coverage 
month, shall be such that the premium 
assistance amount for such a taxpayer 
shall decrease, on a sliding scale in a 
linear manner, from the amount that 
would result if determined in 
accordance with subclause (II) to the 
amount that would result under 
subsection (b)(2) by substituting `2 
percent' for `the applicable 
percentage' in subparagraph (B)(ii) 
thereof.
``(IV) After 2025 for taxpayers 
whose household income exceeds 200 
percent of poverty line.--In the case 
of a taxable year beginning after 
December 31, 2025, and before January 
1, 2028, if any taxpayer's household 
income exceeds 200 percent of the 
poverty line for such taxable year--
``(aa) clause (ii) shall 
not apply for purposes of 
adjusting premium percentages 
under this subparagraph, and
``(bb) the following table 
shall be applied in lieu of the 
table contained in clause (i):

----------------------------------------------------------------------------------------------------------------
The initial The final
``In the case of household income (expressed as a percent of poverty line) within the premium premium
following income tier: percentage percentage
is- is-
----------------------------------------------------------------------------------------------------------------
200% up to 250% 2.0% 4.0%
250% up to 300% 4.0% 6.0%
300% up to 400% 6.0% 8.5%
400% up to 600% 8.5% 8.5%
600% up to 700% 8.5% 9.25%''.
----------------------------------------------------------------------------------------------------------------

(b) Extension and Modification of Rule To Allow Credit to Taxpayers 
Whose Household Income Exceeds 400 Percent of Poverty Line.--Section 
36B(c)(1)(E) of such Code is amended--
(1) by striking ``Temporary rule for 2021 through 2025.--In 
the case of'' and inserting ``Temporary rule for certain 
years.--
``(i) Before 2026.--In the case of'', and
(2) by adding at the end the following:
``(ii) After 2025.--In the case of a 
taxable year beginning after December 31, 2025, 
and before January 1, 2028, subparagraph (A) 
shall be applied by substituting `but does not 
exceed 700 percent' for `but does not exceed 
400 percent'.''.
(c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2025.

SEC. 3. GUARDRAILS TO PREVENT FRAUD IN EXCHANGES.

(a) Reduction of Fraudulent Enrollment in Qualified Health Plans.--
(1) Penalties for agents and brokers.--Section 1411(h)(1) 
of the Patient Protection and Affordable Care Act (42 U.S.C. 
18081(h)(1)) is amended--
(A) in subparagraph (A)--
(i) by redesignating clause (ii) as clause 
(iv);
(ii) in clause (i)--
(I) in the matter preceding 
subclause (I), by striking ``If--'' and 
all that follows through the ``such 
person'' in the matter following 
subclause (II) and inserting the 
following: ``If any person (other than 
an agent or broker) fails to provide 
correct information under subsection 
(b) and such failure is attributable to 
negligence or disregard of any rules or 
regulations of the Secretary, such 
person''; and
(II) in the second sentence, by 
striking ``For purposes'' and inserting 
the following:
``(iii) Definitions of negligence, 
disregard.--For purposes'';
(iii) by inserting after clause (i) the 
following:
``(ii) Civil penalties for certain 
violations by agents or brokers.--If any agent 
or broker fails to provide correct information 
under subsection (b) or section 1311(c)(8) or 
other information, as specified by the 
Secretary, and such failure is attributable to 
negligence or disregard of any rules or 
regulations of the Secretary, such agent or 
broker shall be subject, in addition to any 
other penalties that may be prescribed by law, 
including subparagraph (C), to a civil penalty 
of not less than $10,000 and not more than 
$50,000 with respect to each individual who is 
the subject of an application for which such 
incorrect information is provided.''; and
(iv) in clause (iv) (as so redesignated), 
by inserting ``or (ii)'' after ``clause (i)'';
(B) in subparagraph (B)--
(i) by inserting ``including subparagraph 
(C),'' after ``law,'';
(ii) by striking ``Any person'' and 
inserting the following:
``(i) In general.--Any person''; and
(iii) by adding at the end the following:
``(ii) Civil penalties for knowing 
violations by agents or brokers.--
``(I) In general.--Any agent or 
broker who knowingly provides false or 
fraudulent information under subsection 
(b) or section 1311(c)(8), or other 
false or fraudulent information as part 
of an application for enrollment in a 
qualified health plan offered through 
an Exchange, as specified by the 
Secretary, shall be subject, in 
addition to any other penalties that 
may be prescribed by law, including 
subparagraph (C), to a civil penalty of 
not more than $200,000 with respect to 
each individual who is the subject of 
an application for which such false or 
fraudulent information is provided.
``(II) Procedure.--The provisions 
of section 1128A of the Social Security 
Act (other than subsections (a) and (b) 
of such section) shall apply to a civil 
monetary penalty under subclause (I) in 
the same manner as such provisions 
apply to a penalty or proceeding under 
section 1128A of the Social Security 
Act.''; and
(C) by adding at the end the following:
``(C) Criminal penalties.--Any agent or broker who 
knowingly and willfully provides false or fraudulent 
information under subsection (b) or section 1311(c)(8), 
or other false or fraudulent information as part of an 
application for enrollment in a qualified health plan 
offered through an Exchange, as specified by the 
Secretary, shall be fined under title 18, United States 
Code, imprisoned for not more than 10 years, or 
both.''.
(2) Consumer protections.--
(A) In general.--Section 1311(c) of the Patient 
Protection and Affordable Care Act (42 U.S.C. 18031(c)) 
is amended by adding at the end the following new 
paragraph:
``(8) Agent- or broker-assisted enrollment in qualified 
health plans in certain exchanges.--
``(A) In general.--For plan years beginning on or 
after such date specified by the Secretary, but not 
later than January 1, 2029, in the case of an Exchange 
that the Secretary operates pursuant to section 
1321(c)(1), the Secretary shall establish a 
verification process for new enrollments of individuals 
in, and changes in coverage for individuals under, a 
qualified health plan offered through such Exchange, 
which are submitted by an agent or broker in accordance 
with section 1312(e) and for which the agent or broker 
is eligible to receive a commission.
``(B) Requirements.--The enrollment verification 
process under subparagraph (A) shall include--
``(i) a requirement that the agent or 
broker provide with the new enrollment or 
coverage change such documentation or evidence 
(such as a standardized consent form) or other 
sources as the Secretary determines necessary 
to establish that the agent or broker has the 
consent of the individual for the new 
enrollment or coverage change;
``(ii) a requirement that any commissions 
due to a broker or agent for such new 
enrollment or coverage change are paid after 
the enrollee has resolved all inconsistencies 
in accordance with paragraphs (3) and (4) of 
section 1411(e);
``(iii) a requirement that the information 
required under clause (i) and, as applicable, 
the date on which inconsistencies are resolved 
as described in clause (ii), is accessible to 
the applicable qualified health plan through a 
database or other resource, as determined by 
the Secretary, so that any commissions due to a 
broker or agent for such enrollment can be 
effectuated at the appropriate time;
``(iv) a requirement that individuals are 
notified of any changes to enrollment, 
coverage, the agent of record, or premium tax 
credits in a timely manner and that such notice 
provides plain language instructions on how 
individuals can cancel unauthorized activity;
``(v) a requirement that individuals be 
able to access their account information on a 
website or other technology platform, as 
defined by the Secretary, when used to submit 
an enrollment or plan change, in lieu of the 
Exchange website described in subsection 
(d)(4)(C), including information on the agent 
of record, the qualified health plan, and when 
any changes are made to the agent of record or 
the qualified health plan, on a consumer-facing 
website or through a toll-free telephone 
hotline; and
``(vi) a requirement that the agent or 
broker report to the Secretary any third-party 
marketing organization or field marketing 
organization (as such terms are defined in 
section 1312(e)) involved in the chain of 
enrollment (as so defined) with respect to such 
new enrollment or coverage change.
``(C) Consumer protection.--The Secretary shall 
ensure that the enrollment verification process under 
subparagraph (A) prioritizes continuity of coverage and 
care for individuals, including by not disenrolling 
individuals from a qualified health plan without the 
consent of the individual, regardless of whether the 
broker, agent, or qualified health plan is in violation 
of any requirement under this paragraph.''.
(B) Required reporting.--Section 1311(c)(1) of the 
Patient Protection and Affordable Care Act (42 U.S.C. 
18031(c)(1)) is amended--
(i) in subparagraph (H), by striking 
``and'' at the end;
(ii) in subparagraph (I), by striking the 
period at the end and inserting ``; and''; and
(iii) by adding at the end the following:
``(J) report to the Secretary the termination (as 
defined in section 1312(e)(1)(C)) of an issuer.''.
(3) Authority to regulate field marketing organizations and 
third-party marketing organizations.--Section 1312(e) of the 
Patient Protection and Affordable Care Act (42 U.S.C. 18032(e)) 
is amended--
(A) by redesignating paragraphs (1) and (2) as 
subclauses (I) and (II), respectively, and adjusting 
the margins accordingly;
(B) in subclause (II) (as so redesignated), by 
striking the period at the end and inserting ``; and'';
(C) by striking the subsection designation and 
heading and all that follows through ``brokers--'' and 
inserting the following:
``(e) Regulation of Agents, Brokers, and Certain Marketing 
Organizations.--
``(1) Agents, brokers, and certain marketing 
organizations.--
``(A) In general.--The Secretary shall establish 
procedures under which a State may allow--
``(i) agents or brokers--''; and
(D) by adding at the end the following:
``(ii) field marketing organizations and 
third-party marketing organizations to 
participate in the chain of enrollment for an 
individual with respect to qualified health 
plans offered through an Exchange.
``(B) Criteria.--For plan years beginning on or 
after such date specified by the Secretary, but not 
later than January 1, 2029, the Secretary, by 
regulation, shall establish criteria for States to use 
in determining whether to allow agents and brokers to 
enroll individuals and employers in qualified health 
plans as described in subclause (I) of subparagraph 
(A)(i) and to assist individuals as described in 
subclause (II) of such subparagraph and field marketing 
organizations and third-party marketing organizations 
to participate in the chain of enrollment as described 
in subparagraph (A)(ii). Such criteria shall, at a 
minimum, require that--
``(i) an agent or broker act in accordance 
with a standard of conduct that includes a duty 
of such agent or broker to act in the best 
interests of the enrollee;
``(ii) a field marketing organization or 
third-party marketing organization agree to 
report the termination of an agent or broker to 
the applicable State and the Secretary, 
including the reason for termination; and
``(iii) an agent, broker, field marketing 
organization, or third-party marketing 
organization--
``(I) meet such marketing 
requirements as are required by the 
Secretary;
``(II) meet marketing requirements 
in accordance with other applicable 
Federal or State law;
``(III) does not employ practices 
that are confusing or misleading, as 
determined by the Secretary;
``(IV) submit all marketing 
materials to the Secretary for, as 
determined appropriate by the 
Secretary, review and approval;
``(V) is a licensed agent or broker 
or meets other licensure requirements, 
as required by the State;
``(VI) register with the Secretary; 
and
``(VII) does not compensate any 
individual or organization for 
referrals or any other service relating 
to the sale of, marketing for, or 
enrollment in qualified health plans 
unless such individual or organization 
meets the criteria described in 
subclauses (I) through (VI).
``(C) Definitions.--In this paragraph:
``(i) Chain of enrollment.--The term `chain 
of enrollment', with respect to enrollment of 
an individual in a qualified health plan 
offered through an Exchange, means any steps 
taken from marketing to such individual, to 
such individual making an enrollment decision 
with respect to such a plan.
``(ii) Field marketing organization.--The 
term `field marketing organization' means an 
organization or individual that directly 
employs or contracts with agents and brokers, 
or contracts with carriers, to provide 
functions relating to enrollment of individuals 
in qualified health plans offered through an 
Exchange as part of the chain of enrollment.
``(iii) Marketing.--The term `marketing' 
means the use of marketing materials to provide 
information to current and prospective 
enrollees in a qualified health plan offered 
through an Exchange.
``(iv) Marketing materials.--The term 
`marketing materials' means materials relating 
to a qualified health plan offered through an 
Exchange or benefits offered through an 
Exchange that--
``(I) are intended--
``(aa) to draw an 
individual's attention to such 
plan or the premium tax credits 
or cost-sharing reductions for 
such plan or plans offered 
through an Exchange;
``(bb) to influence an 
individual's decision-making 
process when selecting a 
qualified health plan in which 
to enroll; or
``(cc) to influence an 
enrollee's decision to stay 
enrolled in such plan; and
``(II) include or address content 
regarding the benefits, benefit 
structure, premiums, or cost sharing of 
such plan.
``(v) Termination.--The term `termination', 
with respect to a contract or business 
arrangement between an agent or broker and a 
field marketing organization, third-party 
marketing organization, or health insurance 
issuer, means--
``(I) the ending of such contract 
or business arrangement, either 
unilaterally by one of the parties or 
on mutual agreement; or
``(II) the expiration of such 
contract or business arrangement that 
is not replaced by a substantially 
similar agreement.
``(vi) Third-party marketing 
organization.--The term `third-party marketing 
organization' means an organization or 
individual that is compensated to perform lead 
generation, marketing, or sales relating to 
enrollment of individuals in qualified health 
plans offered through an Exchange as part of 
the chain of enrollment.''.
(4) Transparency.--Section 1312(e) of the Patient 
Protection and Affordable Care Act (42 U.S.C. 18032(e)), as 
amended by paragraph (3), is further amended by adding at the 
end the following new paragraphs:
``(2) Audits.--
``(A) In general.--For plan years beginning on or 
after such date specified by the Secretary, but not 
later than January 1, 2029, the Secretary, in 
coordination with the States and in consultation with 
the National Association of Insurance Commissioners, 
shall implement a process for the oversight and 
enforcement of agent and broker compliance with this 
section and other applicable Federal and State law 
(including regulations) that shall include--
``(i) periodic audits of agents and brokers 
based on--
``(I) complaints filed with the 
Secretary by individuals enrolled by 
such an agent or broker in a qualified 
health plan offered through an 
Exchange;
``(II) an incident or enrollment 
pattern that suggests fraud; and
``(III) other factors determined by 
the Secretary; and
``(ii) a process under which the Secretary 
shall share audit results and refer potential 
cases of fraud to the relevant State department 
of insurance.
``(B) Effect.--Nothing in this paragraph limits or 
restricts any referrals made under section 1311(i)(3) 
or any enforcement actions under section 1411(h).
``(3) List.--The Secretary shall develop a process to 
regularly provide to qualified health plans, Exchanges, and 
States a list of suspended and terminated agents and 
brokers.''.
(b) Removal of Deceased Individuals From Exchange Plans.--Section 
1311(c) of the Patient Protection and Affordable Care Act (42 U.S.C. 
18031(c)), as amended by subsection (a), is further amended by adding 
at the end the following new paragraph:
``(9) Removal of deceased individuals from exchange 
plans.--
``(A) In general.--Not later than 90 days after the 
date of the enactment of this paragraph, and on a 
quarterly basis thereafter, the Secretary shall conduct 
a check of the Death Master File (as such term is 
defined in section 203(d) of the Bipartisan Budget Act 
of 2013) for purposes of identifying individuals 
enrolled in a qualified health plan through an Exchange 
who are deceased.
``(B) Process.--The Secretary shall--
``(i) establish a process to verify that an 
individual identified pursuant to a check 
described in subparagraph (A) is deceased; and
``(ii) require an Exchange to terminate 
such individual's enrollment under a qualified 
health plan.''.
(c) Standard of Proof for Terminating Agents and Brokers.--Section 
1312(e) of the Patient Protection and Affordable Care Act (42 U.S.C. 
18032(e)), as amended by subsection (a), is further amended by adding 
at the end the following new paragraph:
``(4) Standard for termination for certain exchanges.--In 
the case of an agent or broker with an agreement in effect with 
an Exchange operated by the Secretary pursuant to section 
1321(c) to perform activities described in paragraph (1)(A)(i) 
with respect to such Exchange, the Secretary may terminate such 
agreement for cause if the Secretary finds, based on a 
preponderance of the evidence, that such agent or broker has 
violated such agreement, otherwise applicable law, or any other 
requirement applicable to such agent or broker.''.
(d) Requirement for Exchange To Notify Individuals of Value of 
Premium Tax Credits.--Section 1412(c)(2) of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18082(c)(2)) is amended by adding at the 
end the following new subparagraph:
``(C) Exchange responsibilities.--Beginning January 
1, 2027, if an Exchange is notified under paragraph (1) 
of an advance determination under section 1411 with 
respect to the eligibility of an individual for a 
premium tax credit under section 36B of the Internal 
Revenue Code of 1986, the Exchange shall, prior to 
enrolling such individual in a qualified health plan, 
clearly notify such individual of the amount of such 
tax credit.''.

SEC. 4. EXTENDING ANNUAL OPEN ENROLLMENT PERIOD FOR EXCHANGES FOR PLAN 
YEAR 2026.

The Secretary of Health and Human Services shall revise section 
155.410(e) of title 45, Code of Federal Regulations (or any successor 
regulation) to provide that the annual open enrollment period 
determined for plan year 2026 pursuant to section 1311(c)(6) of the 
Patient Protection and Affordable Care Act (42 U.S.C. 18031(c)(6)) 
shall begin on November 1, 2025, and end on March 1, 2026.

SEC. 5. MODERNIZING AND ENSURING PBM ACCOUNTABILITY.

(a) In General.--
(1) Prescription drug plans.--Section 1860D-12 of the 
Social Security Act (42 U.S.C. 1395w-112) is amended by adding 
at the end the following new subsection:
``(h) Requirements Relating to Pharmacy Benefit Managers.--For plan 
years beginning on or after January 1, 2029:
``(1) Agreements with pharmacy benefit managers.--Each 
contract entered into with a PDP sponsor under this part with 
respect to a prescription drug plan offered by such sponsor 
shall provide that any pharmacy benefit manager acting on 
behalf of such sponsor has a written agreement with the PDP 
sponsor under which the pharmacy benefit manager, and any 
affiliates of such pharmacy benefit manager, as applicable, 
agree to meet the following requirements:
``(A) No income other than bona fide service 
fees.--
``(i) In general.--The pharmacy benefit 
manager and any affiliate of such pharmacy 
benefit manager shall not derive any 
remuneration with respect to any services 
provided on behalf of any entity or individual, 
in connection with the utilization of covered 
part D drugs, from any such entity or 
individual other than bona fide service fees, 
subject to clauses (ii) and (iii).
``(ii) Incentive payments.--For the 
purposes of this subsection, an incentive 
payment (as determined by the Secretary) paid 
by a PDP sponsor to a pharmacy benefit manager 
that is performing services on behalf of such 
sponsor shall be deemed a `bona fide service 
fee' (even if such payment does not otherwise 
meet the definition of such term under 
paragraph (7)(B)) if such payment is a flat 
dollar amount, is consistent with fair market 
value (as specified by the Secretary), is 
related to services actually performed by the 
pharmacy benefit manager or affiliate of such 
pharmacy benefit manager, on behalf of the PDP 
sponsor making such payment, in connection with 
the utilization of covered part D drugs, and 
meets additional requirements, if any, as 
determined appropriate by the Secretary.
``(iii) Clarification on rebates and 
discounts used to lower costs for covered part 
d drugs.--Rebates, discounts, and other price 
concessions received by a pharmacy benefit 
manager or an affiliate of a pharmacy benefit 
manager from manufacturers, even if such price 
concessions are calculated as a percentage of a 
drug's price, shall not be considered a 
violation of the requirements of clause (i) if 
they are fully passed through to a PDP sponsor 
and are compliant with all regulatory and 
subregulatory requirements related to direct 
and indirect remuneration for manufacturer 
rebates under this part, including in cases 
where a PDP sponsor is acting as a pharmacy 
benefit manager on behalf of a prescription 
drug plan offered by such PDP sponsor.
``(iv) Evaluation of remuneration 
arrangements.--Components of subsets of 
remuneration arrangements (such as fees or 
other forms of compensation paid to or retained 
by the pharmacy benefit manager or affiliate of 
such pharmacy benefit manager), as determined 
appropriate by the Secretary, between pharmacy 
benefit managers or affiliates of such pharmacy 
benefit managers, as applicable, and other 
entities involved in the dispensing or 
utilization of covered part D drugs (including 
PDP sponsors, manufacturers, pharmacies, and 
other entities as determined appropriate by the 
Secretary) shall be subject to review by the 
Secretary, in consultation with the Office of 
the Inspector General of the Department of 
Health and Human Services, as determined 
appropriate by the Secretary. The Secretary, in 
consultation with the Office of the Inspector 
General, shall review whether remuneration 
under such arrangements is consistent with fair 
market value (as specified by the Secretary) 
through reviews and assessments of such 
remuneration, as determined appropriate.
``(v) Disgorgement.--The pharmacy benefit 
manager shall disgorge any remuneration paid to 
such pharmacy benefit manager or an affiliate 
of such pharmacy benefit manager in violation 
of this subparagraph to the PDP sponsor.
``(vi) Additional requirements.--The 
pharmacy benefit manager shall--
``(I) enter into a written 
agreement with any affiliate of such 
pharmacy benefit manager, under which 
the affiliate shall identify and 
disgorge any remuneration described in 
clause (v) to the pharmacy benefit 
manager; and
``(II) attest, subject to any 
requirements determined appropriate by 
the Secretary, that the pharmacy 
benefit manager has entered into a 
written agreement described in 
subclause (I) with any relevant 
affiliate of the pharmacy benefit 
manager.
``(B) Transparency regarding guarantees and cost 
performance evaluations.--The pharmacy benefit manager 
shall--
``(i) define, interpret, and apply, in a 
fully transparent and consistent manner for 
purposes of calculating or otherwise evaluating 
pharmacy benefit manager performance against 
pricing guarantees or similar cost performance 
measurements related to rebates, discounts, 
price concessions, or net costs, terms such 
as--
``(I) `generic drug', in a manner 
consistent with the definition of the 
term under section 423.4 of title 42, 
Code of Federal Regulations, or a 
successor regulation;
``(II) `brand name drug', in a 
manner consistent with the definition 
of the term under section 423.4 of 
title 42, Code of Federal Regulations, 
or a successor regulation;
``(III) `specialty drug';
``(IV) `rebate'; and
``(V) `discount';
``(ii) identify any drugs, claims, or price 
concessions excluded from any pricing guarantee 
or other cost performance measure in a clear 
and consistent manner; and
``(iii) where a pricing guarantee or other 
cost performance measure is based on a pricing 
benchmark other than the wholesale acquisition 
cost (as defined in section 1847A(c)(6)(B)) of 
a drug, calculate and provide a wholesale 
acquisition cost-based equivalent to the 
pricing guarantee or other cost performance 
measure.
``(C) Provision of information.--
``(i) In general.--Not later than July 1 of 
each year, beginning in 2029, the pharmacy 
benefit manager shall submit to the PDP 
sponsor, and to the Secretary, a report, in 
accordance with this subparagraph, and shall 
make such report available to such sponsor at 
no cost to such sponsor in a format specified 
by the Secretary under paragraph (5). Each such 
report shall include, with respect to such PDP 
sponsor and each plan offered by such sponsor, 
the following information with respect to the 
previous plan year:
``(I) A list of all drugs covered 
by the plan that were dispensed 
including, with respect to each such 
drug--
``(aa) the brand name, 
generic or non-proprietary 
name, and National Drug Code;
``(bb) the number of plan 
enrollees for whom the drug was 
dispensed, the total number of 
prescription claims for the 
drug (including original 
prescriptions and refills, 
counted as separate claims), 
and the total number of dosage 
units of the drug dispensed;
``(cc) the number of 
prescription claims described 
in item (bb) by each type of 
dispensing channel through 
which the drug was dispensed, 
including retail, mail order, 
specialty pharmacy, long term 
care pharmacy, home infusion 
pharmacy, or other types of 
pharmacies or providers;
``(dd) the average 
wholesale acquisition cost, 
listed as cost per day's 
supply, cost per dosage unit, 
and cost per typical course of 
treatment (as applicable);
``(ee) the average 
wholesale price for the drug, 
listed as price per day's 
supply, price per dosage unit, 
and price per typical course of 
treatment (as applicable);
``(ff) the total out-of-
pocket spending by plan 
enrollees on such drug after 
application of any benefits 
under the plan, including plan 
enrollee spending through 
copayments, coinsurance, and 
deductibles;
``(gg) total rebates paid 
by the manufacturer on the drug 
as reported under the Detailed 
DIR Report (or any successor 
report) submitted by such 
sponsor to the Centers for 
Medicare & Medicaid Services;
``(hh) all other direct or 
indirect remuneration on the 
drug as reported under the 
Detailed DIR Report (or any 
successor report) submitted by 
such sponsor to the Centers for 
Medicare & Medicaid Services;
``(ii) the average pharmacy 
reimbursement amount paid by 
the plan for the drug in the 
aggregate and disaggregated by 
dispensing channel identified 
in item (cc);
``(jj) the average National 
Average Drug Acquisition Cost 
(NADAC); and
``(kk) total manufacturer-
derived revenue, inclusive of 
bona fide service fees, 
attributable to the drug and 
retained by the pharmacy 
benefit manager and any 
affiliate of such pharmacy 
benefit manager.
``(II) In the case of a pharmacy 
benefit manager that has an affiliate 
that is a retail, mail order, or 
specialty pharmacy, with respect to 
drugs covered by such plan that were 
dispensed, the following information:
``(aa) The percentage of 
total prescriptions that were 
dispensed by pharmacies that 
are an affiliate of the 
pharmacy benefit manager for 
each drug.
``(bb) The interquartile 
range of the total combined 
costs paid by the plan and plan 
enrollees, per dosage unit, per 
course of treatment, per 30-day 
supply, and per 90-day supply 
for each drug dispensed by 
pharmacies that are not an 
affiliate of the pharmacy 
benefit manager and that are 
included in the pharmacy 
network of such plan.
``(cc) The interquartile 
range of the total combined 
costs paid by the plan and plan 
enrollees, per dosage unit, per 
course of treatment, per 30-day 
supply, and per 90-day supply 
for each drug dispensed by 
pharmacies that are an 
affiliate of the pharmacy 
benefit manager and that are 
included in the pharmacy 
network of such plan.
``(dd) The lowest total 
combined cost paid by the plan 
and plan enrollees, per dosage 
unit, per course of treatment, 
per 30-day supply, and per 90-
day supply, for each drug that 
is available from any pharmacy 
included in the pharmacy 
network of such plan.
``(ee) The difference 
between the average acquisition 
cost of the affiliate, such as 
a pharmacy or other entity that 
acquires prescription drugs, 
that initially acquires the 
drug and the amount reported 
under subclause (I)(jj) for 
each drug.
``(ff) A list inclusive of 
the brand name, generic or non-
proprietary name, and National 
Drug Code of covered part D 
drugs subject to an agreement 
with a covered entity under 
section 340B of the Public 
Health Service Act for which 
the pharmacy benefit manager or 
an affiliate of the pharmacy 
benefit manager had a contract 
or other arrangement with such 
a covered entity in the service 
area of such plan.
``(III) Where a drug approved under 
section 505(c) of the Federal Food, 
Drug, and Cosmetic Act (referred to in 
this subclause as the `listed drug') is 
covered by the plan, the following 
information:
``(aa) A list of currently 
marketed generic drugs approved 
under section 505(j) of the 
Federal Food, Drug, and 
Cosmetic Act pursuant to an 
application that references 
such listed drug that are not 
covered by the plan, are 
covered on the same formulary 
tier or a formulary tier 
typically associated with 
higher cost-sharing than the 
listed drug, or are subject to 
utilization management that the 
listed drug is not subject to.
``(bb) The estimated 
average beneficiary cost-
sharing under the plan for a 
30-day supply of the listed 
drug.
``(cc) Where a generic drug 
listed under item (aa) is on a 
formulary tier typically 
associated with higher cost-
sharing than the listed drug, 
the estimated average cost-
sharing that a beneficiary 
would have paid for a 30-day 
supply of each of the generic 
drugs described in item (aa), 
had the plan provided coverage 
for such drugs on the same 
formulary tier as the listed 
drug.
``(dd) A written 
justification for providing 
more favorable coverage of the 
listed drug than the generic 
drugs described in item (aa).
``(ee) The number of 
currently marketed generic 
drugs approved under section 
505(j) of the Federal Food, 
Drug, and Cosmetic Act pursuant 
to an application that 
references such listed drug.
``(IV) Where a reference product 
(as defined in section 351(i) of the 
Public Health Service Act) is covered 
by the plan, the following information:
``(aa) A list of currently 
marketed biosimilar biological 
products licensed under section 
351(k) of the Public Health 
Service Act pursuant to an 
application that refers to such 
reference product that are not 
covered by the plan, are 
covered on the same formulary 
tier or a formulary tier 
typically associated with 
higher cost-sharing than the 
reference product, or are 
subject to utilization 
management that the reference 
product is not subject to.
``(bb) The estimated 
average beneficiary cost-
sharing under the plan for a 
30-day supply of the reference 
product.
``(cc) Where a biosimilar 
biological product listed under 
item (aa) is on a formulary 
tier typically associated with 
higher cost-sharing than the 
reference product, the 
estimated average cost-sharing 
that a beneficiary would have 
paid for a 30-day supply of 
each of the biosimilar 
biological products described 
in item (aa), had the plan 
provided coverage for such 
products on the same formulary 
tier as the reference product.
``(dd) A written 
justification for providing 
more favorable coverage of the 
reference product than the 
biosimilar biological product 
described in item (aa).
``(ee) The number of 
currently marketed biosimilar 
biological products licensed 
under section 351(k) of the 
Public Health Service Act, 
pursuant to an application that 
refers to such reference 
product.
``(V) Total gross spending on 
covered part D drugs by the plan, not 
net of rebates, fees, discounts, or 
other direct or indirect remuneration.
``(VI) The total amount retained by 
the pharmacy benefit manager or an 
affiliate of such pharmacy benefit 
manager in revenue related to 
utilization of covered part D drugs 
under that plan, inclusive of bona fide 
service fees.
``(VII) The total spending on 
covered part D drugs net of rebates, 
fees, discounts, or other direct and 
indirect remuneration by the plan.
``(VIII) An explanation of any 
benefit design parameters under such 
plan that encourage plan enrollees to 
fill prescriptions at pharmacies that 
are an affiliate of such pharmacy 
benefit manager, such as mail and 
specialty home delivery programs, and 
retail and mail auto-refill programs.
``(IX) The following information:
``(aa) A list of all 
brokers, consultants, advisors, 
and auditors that receive 
compensation from the pharmacy 
benefit manager or an affiliate 
of such pharmacy benefit 
manager for referrals, 
consulting, auditing, or other 
services offered to PDP 
sponsors related to pharmacy 
benefit management services.
``(bb) The amount of 
compensation provided by such 
pharmacy benefit manager or 
affiliate to each such broker, 
consultant, advisor, and 
auditor.
``(cc) The methodology for 
calculating the amount of 
compensation provided by such 
pharmacy benefit manager or 
affiliate, for each such 
broker, consultant, advisor, 
and auditor.
``(X) A list of all affiliates of 
the pharmacy benefit manager.
``(XI) A summary document submitted 
in a standardized template developed by 
the Secretary that includes such 
information described in subclauses (I) 
through (X).
``(ii) Written explanation of contracts or 
agreements with drug manufacturers.--
``(I) In general.--The pharmacy 
benefit manager shall, not later than 
30 days after the finalization of any 
contract or agreement between such 
pharmacy benefit manager or an 
affiliate of such pharmacy benefit 
manager and a drug manufacturer (or 
subsidiary, agent, or entity affiliated 
with such drug manufacturer) that makes 
rebates, discounts, payments, or other 
financial incentives related to one or 
more covered part D drugs or other 
prescription drugs, as applicable, of 
the manufacturer directly or indirectly 
contingent upon coverage, formulary 
placement, or utilization management 
conditions on any other covered part D 
drugs or other prescription drugs, as 
applicable, submit to the PDP sponsor a 
written explanation of such contract or 
agreement.
``(II) Requirements.--A written 
explanation under subclause (I) shall--
``(aa) include the 
manufacturer subject to the 
contract or agreement, all 
covered part D drugs and other 
prescription drugs, as 
applicable, subject to the 
contract or agreement and the 
manufacturers of such drugs, 
and a high-level description of 
the terms of such contract or 
agreement and how such terms 
apply to such drugs; and
``(bb) be certified by the 
Chief Executive Officer, Chief 
Financial Officer, or General 
Counsel of such pharmacy 
benefit manager, or affiliate 
of such pharmacy benefit 
manager, as applicable, or an 
individual delegated with the 
authority to sign on behalf of 
one of these officers, who 
reports directly to the 
officer.
``(III) Definition of other 
prescription drugs.--For purposes of 
this clause, the term `other 
prescription drugs' means prescription 
drugs covered as supplemental benefits 
under this part or prescription drugs 
paid outside of this part.
``(D) Audit rights.--
``(i) In general.--Not less than once a 
year, at the request of the PDP sponsor, the 
pharmacy benefit manager shall allow for an 
audit of the pharmacy benefit manager to ensure 
compliance with all terms and conditions under 
the written agreement described in this 
paragraph and the accuracy of information 
reported under subparagraph (C).
``(ii) Auditor.--The PDP sponsor shall have 
the right to select an auditor. The pharmacy 
benefit manager shall not impose any 
limitations on the selection of such auditor.
``(iii) Provision of information.--The 
pharmacy benefit manager shall make available 
to such auditor all records, data, contracts, 
and other information necessary to confirm the 
accuracy of information provided under 
subparagraph (C), subject to reasonable 
restrictions on how such information must be 
reported to prevent redisclosure of such 
information.
``(iv) Timing.--The pharmacy benefit 
manager must provide information under clause 
(iii) and other information, data, and records 
relevant to the audit to such auditor within 6 
months of the initiation of the audit and 
respond to requests for additional information 
from such auditor within 30 days after the 
request for additional information.
``(v) Information from affiliates.--The 
pharmacy benefit manager shall be responsible 
for providing to such auditor information 
required to be reported under subparagraph (C) 
or under clause (iii) of this subparagraph that 
is owned or held by an affiliate of such 
pharmacy benefit manager.
``(2) Enforcement.--
``(A) In general.--Each PDP sponsor shall--
``(i) disgorge to the Secretary any amounts 
disgorged to the PDP sponsor by a pharmacy 
benefit manager under paragraph (1)(A)(v);
``(ii) require, in a written agreement with 
any pharmacy benefit manager acting on behalf 
of such sponsor or affiliate of such pharmacy 
benefit manager, that such pharmacy benefit 
manager or affiliate reimburse the PDP sponsor 
for any civil money penalty imposed on the PDP 
sponsor as a result of the failure of the 
pharmacy benefit manager or affiliate to meet 
the requirements of paragraph (1) that are 
applicable to the pharmacy benefit manager or 
affiliate under the agreement; and
``(iii) require, in a written agreement 
with any such pharmacy benefit manager acting 
on behalf of such sponsor or affiliate of such 
pharmacy benefit manager, that such pharmacy 
benefit manager or affiliate be subject to 
punitive remedies for breach of contract for 
failure to comply with the requirements 
applicable under paragraph (1).
``(B) Reporting of alleged violations.--The 
Secretary shall make available and maintain a mechanism 
for manufacturers, PDP sponsors, pharmacies, and other 
entities that have contractual relationships with 
pharmacy benefit managers or affiliates of such 
pharmacy benefit managers to report, on a confidential 
basis, alleged violations of paragraph (1)(A) or 
subparagraph (C).
``(C) Anti-retaliation and anti-coercion.--
Consistent with applicable Federal or State law, a PDP 
sponsor shall not--
``(i) retaliate against an individual or 
entity for reporting an alleged violation under 
subparagraph (B); or
``(ii) coerce, intimidate, threaten, or 
interfere with the ability of an individual or 
entity to report any such alleged violations.
``(3) Certification of compliance.--
``(A) In general.--Each PDP sponsor shall furnish 
to the Secretary (at a time and in a manner specified 
by the Secretary) an annual certification of compliance 
with this subsection, as well as such information as 
the Secretary determines necessary to carry out this 
subsection.
``(B) Implementation.--Notwithstanding any other 
provision of law, the Secretary may implement this 
paragraph by program instruction or otherwise.
``(4) Rule of construction.--Nothing in this subsection 
shall be construed as--
``(A) prohibiting flat dispensing fees or 
reimbursement or payment for ingredient costs 
(including customary, industry-standard discounts 
directly related to drug acquisition that are retained 
by pharmacies or wholesalers) to entities that acquire 
or dispense prescription drugs; or
``(B) modifying regulatory requirements or sub-
regulatory program instruction or guidance related to 
pharmacy payment, reimbursement, or dispensing fees.
``(5) Standard formats.--
``(A) In general.--Not later than June 1, 2028, the 
Secretary shall specify standard, machine-readable 
formats for pharmacy benefit managers to submit annual 
reports required under paragraph (1)(C)(i).
``(B) Implementation.--Notwithstanding any other 
provision of law, the Secretary may implement this 
paragraph by program instruction or otherwise.
``(6) Confidentiality.--
``(A) In general.--Information disclosed by a 
pharmacy benefit manager, an affiliate of a pharmacy 
benefit manager, a PDP sponsor, or a pharmacy under 
this subsection that is not otherwise publicly 
available or available for purchase shall not be 
disclosed by the Secretary or a PDP sponsor receiving 
the information, except that the Secretary may disclose 
the information for the following purposes:
``(i) As the Secretary determines necessary 
to carry out this part.
``(ii) To permit the Comptroller General to 
review the information provided.
``(iii) To permit the Director of the 
Congressional Budget Office to review the 
information provided.
``(iv) To permit the Executive Director of 
the Medicare Payment Advisory Commission to 
review the information provided.
``(v) To the Attorney General for the 
purposes of conducting oversight and 
enforcement under this title.
``(vi) To the Inspector General of the 
Department of Health and Human Services in 
accordance with its authorities under the 
Inspector General Act of 1978 (section 406 of 
title 5, United States Code), and other 
applicable statutes.
``(B) Restriction on use of information.--The 
Secretary, the Comptroller General, the Director of the 
Congressional Budget Office, and the Executive Director 
of the Medicare Payment Advisory Commission shall not 
report on or disclose information disclosed pursuant to 
subparagraph (A) to the public in a manner that would 
identify--
``(i) a specific pharmacy benefit manager, 
affiliate, pharmacy, manufacturer, wholesaler, 
PDP sponsor, or plan; or
``(ii) contract prices, rebates, discounts, 
or other remuneration for specific drugs in a 
manner that may allow the identification of 
specific contracting parties or of such 
specific drugs.
``(7) Definitions.--For purposes of this subsection:
``(A) Affiliate.--The term `affiliate' means, with 
respect to any pharmacy benefit manager or PDP sponsor, 
any entity that, directly or indirectly--
``(i) owns or is owned by, controls or is 
controlled by, or is otherwise related in any 
ownership structure to such pharmacy benefit 
manager or PDP sponsor; or
``(ii) acts as a contractor, principal, or 
agent to such pharmacy benefit manager or PDP 
sponsor, insofar as such contractor, principal, 
or agent performs any of the functions 
described under subparagraph (C).
``(B) Bona fide service fee.--The term `bona fide 
service fee' means a fee that is reflective of the fair 
market value (as specified by the Secretary, through 
notice and comment rulemaking) for a bona fide, 
itemized service actually performed on behalf of an 
entity, that the entity would otherwise perform (or 
contract for) in the absence of the service arrangement 
and that is not passed on in whole or in part to a 
client or customer, whether or not the entity takes 
title to the drug. Such fee must be a flat dollar 
amount and shall not be directly or indirectly based 
on, or contingent upon--
``(i) drug price, such as wholesale 
acquisition cost or drug benchmark price (such 
as average wholesale price);
``(ii) the amount of discounts, rebates, 
fees, or other direct or indirect remuneration 
with respect to covered part D drugs dispensed 
to enrollees in a prescription drug plan, 
except as permitted pursuant to paragraph 
(1)(A)(ii);
``(iii) coverage or formulary placement 
decisions or the volume or value of any 
referrals or business generated between the 
parties to the arrangement; or
``(iv) any other amounts or methodologies 
prohibited by the Secretary.
``(C) Pharmacy benefit manager.--The term `pharmacy 
benefit manager' means any person or entity that, 
either directly or through an intermediary, acts as a 
price negotiator or group purchaser on behalf of a PDP 
sponsor or prescription drug plan, or manages the 
prescription drug benefits provided by such sponsor or 
plan, including the processing and payment of claims 
for prescription drugs, the performance of drug 
utilization review, the processing of drug prior 
authorization requests, the adjudication of appeals or 
grievances related to the prescription drug benefit, 
contracting with network pharmacies, controlling the 
cost of covered part D drugs, or the provision of 
related services. Such term includes any person or 
entity that carries out one or more of the activities 
described in the preceding sentence, irrespective of 
whether such person or entity calls itself a `pharmacy 
benefit manager'.''.
(2) MA-PD plans.--Section 1857(f)(3) of the Social Security 
Act (42 U.S.C. 1395w-27(f)(3)) is amended by adding at the end 
the following new subparagraph:
``(F) Requirements relating to pharmacy benefit 
managers.--For plan years beginning on or after January 
1, 2029, section 1860D-12(h).''.
(3) Nonapplication of paperwork reduction act.--Chapter 35 
of title 44, United States Code, shall not apply to the 
implementation of this subsection.
(4) Funding.--
(A) Secretary.--In addition to amounts otherwise 
available, there is appropriated to the Centers for 
Medicare & Medicaid Services Program Management 
Account, out of any money in the Treasury not otherwise 
appropriated, $113,000,000 for fiscal year 2026, to 
remain available until expended, to carry out this 
subsection.
(B) OIG.--In addition to amounts otherwise 
available, there is appropriated to the Inspector 
General of the Department of Health and Human Services, 
out of any money in the Treasury not otherwise 
appropriated, $20,000,000 for fiscal year 2026, to 
remain available until expended, to carry out this 
subsection.
(b) GAO Study and Report on Price-Related Compensation Across the 
Supply Chain.--
(1) Study.--The Comptroller General of the United States 
(in this subsection referred to as the ``Comptroller General'') 
shall conduct a study describing the use of compensation and 
payment structures related to a prescription drug's price 
within the retail prescription drug supply chain in part D of 
title XVIII of the Social Security Act (42 U.S.C. 1395w-101 et 
seq.). Such study shall summarize information from Federal 
agencies and industry experts, to the extent available, with 
respect to the following:
(A) The type, magnitude, other features (such as 
the pricing benchmarks used), and prevalence of 
compensation and payment structures related to a 
prescription drug's price, such as calculating fee 
amounts as a percentage of a prescription drug's price, 
between intermediaries in the prescription drug supply 
chain, including--
(i) pharmacy benefit managers;
(ii) PDP sponsors offering prescription 
drug plans and Medicare Advantage organizations 
offering MA-PD plans;
(iii) drug wholesalers;
(iv) pharmacies;
(v) manufacturers;
(vi) pharmacy services administrative 
organizations;
(vii) brokers, auditors, consultants, and 
other entities that--
(I) advise PDP sponsors offering 
prescription drug plans and Medicare 
Advantage organizations offering MA-PD 
plans regarding pharmacy benefits; or
(II) review PDP sponsor and 
Medicare Advantage organization 
contracts with pharmacy benefit 
managers; and
(viii) other service providers that 
contract with any of the entities described in 
clauses (i) through (vii) that may use price-
related compensation and payment structures, 
such as rebate aggregators (or other entities 
that negotiate or process price concessions on 
behalf of pharmacy benefit managers, plan 
sponsors, or pharmacies).
(B) The primary business models and compensation 
structures for each category of intermediary described 
in subparagraph (A).
(C) Variation in price-related compensation 
structures between affiliated entities (such as 
entities with common ownership, either full or partial, 
and subsidiary relationships) and unaffiliated 
entities.
(D) Potential conflicts of interest among 
contracting entities related to the use of prescription 
drug price-related compensation structures, such as the 
potential for fees or other payments set as a 
percentage of a prescription drug's price to advantage 
formulary selection, distribution, or purchasing of 
prescription drugs with higher prices.
(E) Notable differences, if any, in the use and 
level of price-based compensation structures over time 
and between different market segments, such as under 
part D of title XVIII of the Social Security Act (42 
U.S.C. 1395w-101 et seq.) and the Medicaid program 
under title XIX of such Act (42 U.S.C. 1396 et seq.).
(F) The effects of drug price-related compensation 
structures and alternative compensation structures on 
Federal health care programs and program beneficiaries, 
including with respect to cost-sharing, premiums, 
Federal outlays, biosimilar and generic drug adoption 
and utilization, drug shortage risks, and the potential 
for fees set as a percentage of a drug's price to 
advantage the formulary selection, distribution, or 
purchasing of drugs with higher prices.
(G) Other issues determined to be relevant and 
appropriate by the Comptroller General.
(2) Report.--Not later than 2 years after the date of 
enactment of this section, the Comptroller General shall submit 
to Congress a report containing the results of the study 
conducted under paragraph (1), together with recommendations 
for such legislation and administrative action as the 
Comptroller General determines appropriate.
(c) MedPAC Reports on Agreements With Pharmacy Benefit Managers 
With Respect to Prescription Drug Plans and MA-PD Plans.--
(1) In general.--The Medicare Payment Advisory Commission 
shall submit to Congress the following reports:
(A) Initial report.--Not later than the first March 
15 occurring after the date that is 2 years after the 
date on which the Secretary makes the data available to 
the Commission, a report regarding agreements with 
pharmacy benefit managers with respect to prescription 
drug plans and MA-PD plans. Such report shall include, 
to the extent practicable--
(i) a description of trends and patterns, 
including relevant averages, totals, and other 
figures for the types of information submitted;
(ii) an analysis of any differences in 
agreements and their effects on plan enrollee 
out-of-pocket spending and average pharmacy 
reimbursement, and other impacts; and
(iii) any recommendations the Commission 
determines appropriate.
(B) Final report.--Not later than 2 years after the 
date on which the Commission submits the initial report 
under subparagraph (A), a report describing any changes 
with respect to the information described in 
subparagraph (A) over time, together with any 
recommendations the Commission determines appropriate.
(2) Funding.--In addition to amounts otherwise available, 
there is appropriated to the Medicare Payment Advisory 
Commission, out of any money in the Treasury not otherwise 
appropriated, $1,000,000 for fiscal year 2026, to remain 
available until expended, to carry out this subsection.

SEC. 6. FULL REBATE PASS THROUGH TO PLAN; EXCEPTION FOR INNOCENT PLAN 
FIDUCIARIES.

(a) In General.--Section 408(b)(2) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1108(b)(2)) is amended--
(1) in subparagraph (B)(viii)--
(A) by redesignating subclauses (II) through (IV) 
as subclauses (III) through (V), respectively;
(B) in subclause (I)--
(i) by striking ``subclause (II)'' and 
inserting ``subclause (III)''; and
(ii) by striking ``subclauses (II) and 
(III)'' and inserting ``subclauses (III) and 
(IV)''; and
(C) by inserting after subclause (I) the following:
``(II) Pursuant to subsection (a), subparagraphs (C) and 
(D) of section 406(a)(1) shall not apply to a responsible plan 
fiduciary, notwithstanding any failure to remit required 
amounts under subparagraph (C)(i), if the following conditions 
are met:
``(aa) The responsible plan fiduciary did not know 
that the covered service provider failed or would fail 
to make required remittances and reasonably believed 
that the covered service provider remitted such 
required amounts.
``(bb) The responsible plan fiduciary, upon 
discovering that the covered service provider failed to 
remit the required amounts, requests in writing that 
the covered service provider remit such amounts.
``(cc) If the covered service provider fails to 
comply with a written request described in subclause 
(III) within 90 days of the request, the responsible 
plan fiduciary notifies the Secretary of the covered 
service provider's failure, in accordance with 
subclauses (III) and (IV).''; and
(2) by adding at the end the following:
``(C)(i)(I) For plan years beginning on or after the date 
that is 30 months after the date of enactment of this 
subparagraph (referred to in this clause as the `effective 
date'), no contract or arrangement or renewal or extension of a 
contract or arrangement, entered into on or after the effective 
date, for services between a covered plan and a covered service 
provider, through a health insurance issuer offering group 
health insurance coverage, a third party administrator, an 
entity providing pharmacy benefit management services, or other 
entity, for pharmacy benefit management services, is reasonable 
within the meaning of this paragraph unless such entity 
providing pharmacy benefit management services--
``(aa) remits 100 percent of rebates, fees, 
alternative discounts, and other remuneration received 
from any applicable entity that are related to 
utilization of drugs or drug spending under such health 
plan or health insurance coverage, to the group health 
plan or health insurance issuer offering group health 
insurance coverage; and
``(bb) does not enter into any contract for 
pharmacy benefit management services on behalf of such 
a plan or coverage, with an applicable entity unless 
100 percent of rebates, fees, alternative discounts, 
and other remuneration received under such contract 
that are related to the utilization of drugs or drug 
spending under such group health plan or health 
insurance coverage are remitted to the group health 
plan or health insurance issuer by the entity providing 
pharmacy benefit management services.
``(II) Nothing in subclause (I) shall be construed to 
affect the term of a contract or arrangement, as in effect on 
the effective date (as described in such subclause), except 
that such subclause shall apply to any renewal or extension of 
such a contract or arrangement entered into on or after such 
effective date, as so described.
``(ii) With respect to such rebates, fees, alternative 
discounts, and other remuneration--
``(I) the rebates, fees, alternative discounts, and 
other remuneration under clause (i)(I) shall be--
``(aa) remitted--
``(AA) on a quarterly basis, to the 
group health plan or the group health 
insurance issuer, not later than 90 
days after the end of each quarter; or
``(BB) in the case of an 
underpayment in a remittance for a 
prior quarter, as soon as practicable, 
but not later than 90 days after notice 
of the underpayment is first given;
``(bb) fully disclosed and enumerated to 
the group health plan or health insurance 
issuer; and
``(cc) returned to the covered service 
provider for pharmacy benefit management 
services on behalf of the group health plan if 
any audit by a plan sponsor, issuer or a third 
party designated by a plan sponsor, indicates 
that the amounts received are incorrect after 
such amounts have been paid to the group health 
plan or health insurance issuer;
``(II) the Secretary may establish procedures for 
the remittance of rebates fees, alternative discounts, 
and other remuneration under subclause (I)(aa) and the 
disclosure of rebates, fees, alternative discounts, and 
other remuneration under subclause (I)(bb); and
``(III) the records of such rebates, fees, 
alternative discounts, and other remuneration shall be 
available for audit by the plan sponsor, issuer, or a 
third party designated by a plan sponsor, not less than 
once per plan year.
``(iii) To ensure that an entity providing pharmacy benefit 
management services is able to meet the requirements of clause 
(ii)(I), a rebate aggregator (or other purchasing entity 
designed to aggregate rebates) and an applicable group 
purchasing organization shall remit such rebates to the entity 
providing pharmacy benefit management services not later than 
45 days after the end of each quarter.
``(iv) A third-party administrator of a group health plan, 
a health insurance issuer offering group health insurance 
coverage, or a covered service provider for pharmacy benefit 
management services under such health plan or health insurance 
coverage shall make rebate contracts with rebate aggregators or 
drug manufacturers available for audit by such plan sponsor or 
designated third party, subject to reasonable restrictions (as 
determined by the Secretary) on confidentiality to prevent re-
disclosure of such contracts or use of such information in 
audits for purposes unrelated to this section.
``(v) Audits carried out under clauses (ii)(III) and (iv) 
shall be performed by an auditor selected by the responsible 
plan fiduciary. Payment for such audits shall not be made, 
whether directly or indirectly, by the entity providing 
pharmacy benefit management services.
``(vi) Nothing in this subparagraph shall be construed to--
``(I) prohibit reasonable payments to entities 
offering pharmacy benefit management services for bona 
fide services using a fee structure not described in 
this subparagraph, provided that such fees are 
transparent and quantifiable to group health plans and 
health insurance issuers;
``(II) require a third-party administrator of a 
group health plan or covered service provider for 
pharmacy benefit management services under such health 
plan or health insurance coverage to remit bona fide 
service fees to the group health plan;
``(III) limit the ability of a group health plan or 
health insurance issuer to pass through rebates, fees, 
alternative discounts, and other remuneration to the 
participant or beneficiary; or
``(IV) modify the requirements for the creation, 
receipt, maintenance, or transmission of protected 
health information under 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).
``(vii) For purposes of this subparagraph--
``(I) the terms `applicable entity' and `applicable 
group purchasing organization' have the meanings given 
such terms in section 726(e);
``(II) the terms `covered plan', `covered service 
provider', and `responsible plan fiduciary' have the 
meanings given such terms in subparagraph (B); and
``(III) the terms `group health insurance 
coverage', `health insurance coverage', and `health 
insurance issuer' have the meanings given such terms in 
section 733.''.
(b) Rule of Construction.--Subclause (II)(aa) of section 
408(b)(2)(B)(viii) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1108(b)(2)(B)(viii)), as amended by subsection (a), 
shall not be construed to relieve or limit a responsible plan fiduciary 
from the duty to monitor the practices of any covered service provider 
that contracts with the applicable covered plan, including for the 
purposes of ensuring the reasonableness of compensation. For purposes 
of this subsection, the terms ``covered plan'', ``covered service 
provider'', and ``responsible plan fiduciary'' have the meanings given 
such terms in section 408(b)(2)(B)(ii) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1108(b)(2)(B)(ii)).
(c) Clarification of Covered Service Provider.--
(1) Services.--
(A) In general.--Section 408(b)(2)(B)(ii)(I)(bb) of 
the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1108(b)(2)(B)(ii)(I)(bb)) is amended--
(i) in subitem (AA) by striking ``Brokerage 
services,'' and inserting ``Services (including 
brokerage services),''; and
(ii) in subitem (BB)--
(I) by striking ``Consulting,'' and 
inserting ``Other services,''; and
(II) by striking ``related to the 
development or implementation of plan 
design'' and all that follows through 
the period at the end and inserting 
``including any of the following: plan 
design, insurance or insurance product 
selection (including vision and 
dental), recordkeeping, medical 
management, benefits administration 
selection (including vision and 
dental), stop-loss insurance, pharmacy 
benefit management services, wellness 
design and management services, 
transparency tools, group purchasing 
organization agreements and services, 
participation in and services from 
preferred vendor panels, disease 
management, compliance services, 
employee assistance programs, or third 
party administration services, or 
consulting services related to any such 
services.''.
(B) Sense of congress.--It is the sense of Congress 
that the amendment made by subparagraph (A) clarifies 
the existing requirement of covered service providers 
with respect to services described in section 
408(b)(2)(B)(ii)(I)(bb)(BB) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 
1108(b)(2)(B)(ii)(I)(bb)(BB)) that were in effect since 
the application date described in section 202(e) of the 
No Surprises Act (Public Law 116-260; 29 U.S.C. 1108 
note), and does not impose any additional requirement 
under section 408(b)(2)(B) of such Act.
(2) Certain arrangements for pharmacy benefit management 
services considered as indirect.--
(A) In general.--Section 408(b)(2)(B)(i) of the 
Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1108(b)(2)(B)(i)) is amended--
(i) by striking ``requirements of this 
clause'' and inserting ``requirements of this 
subparagraph''; and
(ii) by adding at the end the following: 
``For purposes of applying section 406(a)(1)(C) 
with respect to a transaction described under 
this subparagraph or subparagraph (C), a 
contract or arrangement for services between a 
covered plan and an entity providing services 
to the plan, including a health insurance 
issuer providing health insurance coverage in 
connection with the covered plan, in which such 
entity contracts, in connection with such plan, 
with a service provider for pharmacy benefit 
management services, shall be considered an 
indirect furnishing of goods, services, or 
facilities between the covered plan and the 
service provider for pharmacy benefit 
management services acting as the party in 
interest.''.
(B) Health insurance issuer and health insurance 
coverage defined.--Section 408(b)(2)(B)(ii)(I)(aa) of 
such Act (29 U.S.C. 1108(b)(2)(B)(ii)(I)(aa)) is 
amended by inserting before the period at the end ``and 
the terms `health insurance coverage' and `health 
insurance issuer' have the meanings given such terms in 
section 733(b)''.
(C) Technical amendment.--Section 
408(b)(2)(B)(ii)(I)(aa) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 
1108(b)(2)(B)(ii)(I)(aa)) is amended by inserting 
``in'' after ``defined''.

SEC. 7. QUALIFIED EXCHANGE ENROLLEES ELIGIBLE TO ESTABLISH HEALTH 
SAVINGS ACCOUNTS.

(a) In General.--Section 223 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
``(i) Qualified Exchange Enrollees Eligible To Establish Health 
Savings Accounts.--
``(1) In general.--For purposes of this section, an 
individual who is a qualified Exchange enrollee for any month 
during a taxable year shall be treated as an eligible 
individual for each of the months in such taxable year and each 
taxable year thereafter. Notwithstanding the previous sentence, 
any individual who elects to make an advance premium payment 
under section 1412(c)(2)(C) of the Patient Protection and 
Affordable Care Act with respect to any month during a taxable 
year shall not be treated as an eligible individual for such 
month or any other month during such taxable year.
``(2) Qualified exchange enrollee.--For purposes of this 
subsection, the term `qualified Exchange enrollee' means, with 
respect to any month during a taxable year, any individual if, 
as of the 1st day of such month, such individual is enrolled in 
a qualified health plan in the individual market through an 
Exchange established under the Patient Protection and 
Affordable Care Act that is--
``(A) the lowest cost bronze plan available to such 
individual through such Exchange, or
``(B) in the case that, for any month during the 
preceding taxable year, such individual was enrolled in 
a qualified health plan in the individual market 
through such an Exchange (referred to in this paragraph 
as the `previous plan'), such a qualified health plan 
for which the monthly premium is lower than the monthly 
premium that was in effect for the previous plan.
``(3) Application of monthly limitations for 
contributions.--In the case of an individual who is treated as 
an eligible individual under paragraph (1), subsection (b)(2) 
shall be applied as if each reference to `high deductible 
health plan' were a reference to `a qualified health plan in 
the individual market that was enrolled in through an Exchange 
established under the Patient Protection and Affordable Care 
Act'.
``(4) Coordination with contributions of partial advance 
premium tax credit.--The limitation which would (but for this 
paragraph) apply under subsection (b) for any taxable year to 
an individual who is treated as an eligible individual under 
paragraph (1) shall be reduced (but not below zero) by the 
aggregate amount contributed to health savings accounts of such 
individual for such taxable year under section 1412(f) of the 
Patient Protection and Affordable Care Act (and such amount 
shall not be allowed as a deduction under subsection (a)).
``(5) Allowing health insurance to be purchased from 
account.--In the case of an individual who is treated as an 
eligible individual under paragraph (1), subsection (d)(2) 
shall be applied without regard to subparagraphs (B) and (C) 
thereof.''.
(b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2025.

SEC. 8. OPTION TO PREPAY ANNUAL PREMIUM; OPTION TO DIRECT PARTIAL 
ADVANCE PAYMENT OF PREMIUM TAX CREDIT INTO HSA.

(a) Option To Prepay Annual Premium.--Section 1412(c)(2) of the 
Patient Protection and Affordable Care Act (42 U.S.C. 18082(c)(2)) is 
amended--
(1) in subparagraph (B)(i), by inserting ``, and, in the 
case of an individual who elects to make an advance premium 
payment under subparagraph (C), further reduce such premium by 
$5'' before the semicolon;
(2) by redesignating subparagraph (C), as added by section 
3(d), as subparagraph (D); and
(3) by inserting after subparagraph (B) the following new 
subparagraph:
``(C) Individual option to prepay annual premium.--
Beginning with plan years beginning in 2026, in the 
case of an individual with respect to whom an advance 
determination has been made under section 1411 that 
such individual is eligible for a premium tax credit 
under section 36B of the Internal Revenue Code of 1986, 
if the premium assistance amount under subsection 
(b)(2) of such section is determined with respect to 
such individual in accordance with subsection 
(b)(3)(A)(iii)(II) of such section, such individual may 
elect to make an advance premium payment to the issuer 
of the qualified health plan in which such individual 
is enrolled in an amount equal to $5 multiplied by--
``(i) in the case that the advance 
determination of eligibility was made during 
the annual open enrollment period for such plan 
year, 12; or
``(ii) in the case that the advance 
determination of eligibility was made during an 
open enrollment period other than the annual 
open enrollment period for such plan year, the 
number of months remaining in such plan 
year.''.
(b) Option To Direct Partial Advance Payment of Premium Tax Credit 
Into HSA.--Section 1412 of the Patient Protection and Affordable Care 
Act (42 U.S.C. 18082) is amended--
(1) in subsection (c)(2)--
(A) in subparagraph (A), by striking ``The'' and 
inserting ``Subject to subsection (f), the''; and
(B) in subparagraph (B), by inserting ``(including 
such a payment made in accordance with subsection 
(f))'' after ``an advance payment''; and
(2) by adding at the end the following new subsection:
``(f) Option To Direct Partial Advance Payment of Premium Tax 
Credit to HSA.--
``(1) In general.--Beginning with plan years beginning in 
2026, at the election of an eligible enrolled individual 
described in paragraph (2), the advance payment of the premium 
tax credit allowed under section 36B of the Internal Revenue 
Code of 1986 shall be made as follows:
``(A) The Secretary of the Treasury shall make 
advance payment of 50 percent of such premium tax 
credit to the issuer of a qualified health plan on a 
monthly basis (or such other periodic basis as the 
Secretary may provide).
``(B) The Secretary of the Treasury shall make 
advance payment of 50 percent of such premium tax 
credit into a health savings account (as defined in 
section 223(d) of the Internal Revenue Code of 1986) of 
such individual (as designated by such individual) on 
the same basis provided for under subparagraph (A), but 
only to the extent that the aggregate amount of such 
payments does not exceed the limitation under section 
223(b) of such Code (determined without regard to this 
subsection) which is applicable to such individual for 
the taxable year in which such payments are made.
``(2) Eligible enrolled individual.--For purposes of this 
subsection, the term `eligible enrolled individual' means, with 
respect to a plan year (starting with 2026), an individual--
``(A) with respect to whom an advance determination 
has been made under section 1411 that such individual 
is eligible for a premium tax credit under section 36B 
of the Internal Revenue Code of 1986;
``(B) who is, for the first month of such plan 
year, a qualified Exchange enrollee (as defined in 
section 223(i) of the Internal Revenue Code of 1986); 
and
``(C) who does not elect to make an advance premium 
payment under subsection (c)(2)(C).''.

SEC. 9. REPORT.

Not later than one year after the date of the enactment of this 
Act, the Secretary of the Treasury and the Secretary of Health and 
Human Services shall jointly submit to Congress a report on the 
implementation of sections 7 and 8 and any recommendations on expanding 
accessibility of health savings accounts.
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