H.R. 6703

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6703 Engrossed in House (EH)]

<DOC>

119th CONGRESS
1st Session
H. R. 6703

_______________________________________________________________________

AN ACT

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.''.

Passed the House of Representatives December 17, 2025.

Attest:

Clerk.
119th CONGRESS

1st Session

H. R. 6703

_______________________________________________________________________

AN ACT

To ensure access to affordable health insurance.