SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Prescription Drug Benefit Equity Act 
of 1996''.

SEC. 2. EQUITY IN PROVISION OF PRESCRIPTION DRUG COVERAGE.

    (a) In General.--No health plan (as defined in section 5(1)) may 
provide for mail-order prescription drug coverage (as defined in 
section 5(2)) unless the plan also provides non-mail-order prescription 
drug coverage consistent with subsection (b).
    (b) Equitable Coverage.--A health plan provides non-mail-order 
prescription drug coverage consistent with this subsection only if--
            (1) benefits under the non-mail-order prescription coverage 
        are provided for in the case of all drugs and all circumstances 
        under which benefits are provided under the mail-order 
        prescription drug coverage;
            (2) no deductible or similar cost-sharing is imposed with 
        respect to benefits under the non-mail-order prescription drug 
        coverage unless such a deductible or similar cost-sharing is 
        imposed with respect to benefits under the mail-order 
        prescription drug coverage; and
            (3) the benefits for the non-mail-order coverage assures 
        payments consistent with either (or both) of the following 
        subparagraphs:
                    (A) The dollar amount of payment for prescription 
                drug coverage is not less than the dollar amount of 
                benefits provided with respect to the mail-order 
                coverage for that same coverage.
                    (B) The cost-sharing (including deductibles, 
                copayments, or coinsurance) imposed with respect to 
                non-mail-order coverage that is not greater (as a 
                percentage of charges or dollar amount, as specified 
                under the coverage) than the cost-sharing imposed with 
                respect to the mail-order coverage.
    (c) Application to Organizations and Insurers.--A requirement 
imposed under this section on a health plan offered by a health 
maintenance organization or insurer shall be deemed to be a requirement 
imposed on the organization or insurer.

SEC. 3. ENFORCEMENT.

    (a) Health Plan Issued by HMOs and Insurers.--
            (1) In general.--Each State shall require that each health 
        plan issued, sold, renewed, offered for sale or operated in 
        such State by a health maintenance organization meet the 
        requirements of section 2 pursuant to an enforcement plan filed 
        by the State with the Secretary of Health and Human Services. A 
        State shall submit such information as required by such 
        Secretary demonstrating effective implementation of the State 
        enforcement plan.
            (2) Failure to implement plan.--In the case of the failure 
        of a State to substantially enforce the requirements of section 
        2 with respect to health plans as provided for under the State 
        enforcement plan filed under paragraph (1), the Secretary of 
        Health and Human Services shall implement an enforcement plan 
        to enforce such requirements for organizations and insurers in 
        such State. In the case of a State that fails to substantially 
        enforce such requirements, each health maintenance organization 
        and insurer operating in such State shall be subject to civil 
        enforcement as provided for under sections 502, 504, 506, and 
        510 of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1132, 1134, 1136, and 1140) through the Secretary of 
        Health and Human Services. The civil penalties contained in 
        paragraphs (1) and (2) of section 502(c) of such Act (29 U.S.C. 
        1132(c) (1) and (2)) shall apply to any information required by 
        such Secretary to be disclosed and reported under this 
        subsection.
    (b) Employee Health Benefit Plans.--With respect to employee health 
benefit plans, the Secretary of Labor shall enforce the requirements of 
section 2 in the same manner as provided for under sections 502, 504, 
506, and 510 of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1132, 1134, 1136, and 1140). The civil penalties contained in 
paragraphs (1) and (2) of section 502(c) of such Act (29 U.S.C. 1132(c) 
(1) and (2)) shall apply to any information required by such Secretary 
to be disclosed and reported under this subsection.
    (c) Medicaid.--With respect to a health plan described in section 
5(1)(C), the requirements of section 2 shall be treated as requirements 
of a State plan under title XIX of the Social Security Act.
    (d) FEHBP.--With respect to a health plan described in section 
5(1)(E), the requirements of section 2 shall be treated as a condition 
for contracting with the plan under chapter 89 of title 5, United 
States Code.
    (e) Medicare HMOs.--With respect to a health plan described in 
section 5(1)(F), the requirements of section 2 shall be treated as 
requirements of a State plan under section 1876 of the Social Security 
Act.
    (f) Regulations.--The Secretaries of Labor and Health and Human 
Services and the Director of the Office of Personnel Management may 
promulgate such regulations as may be necessary or appropriate to carry 
out this Act.
    (g) Technical Amendment.--Section 508 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1138) is amended by inserting 
``and under the Prescription Drug Benefit Equity Act of 1996'' before 
the period.

SEC. 4. CONSTRUCTION; PREEMPTION.

    (a) In General.--Nothing in this Act shall be construed as 
preventing a health plan from--
            (1) restricting the drugs for which benefits are provided 
        under the plan, or
            (2) imposing a limitation on the amount of benefits 
        provided with respect to such coverage or the cost-sharing that 
        may be imposed with respect to such coverage,
so long as such restrictions and limitations are consistent with this 
Act.
    (b) Preemption of State Law.--
            (1) In general.--Subject to paragraph (2), nothing in this 
        Act shall be construed to prevent a State from establishing, 
        implementing, or continuing in effect standards and 
        requirements--
                    (A) not prescribed in this Act; or
                    (B) related to the provision of prescription drug 
                coverage that are consistent with, and are not in 
                direct conflict with, this Act and provide greater 
                protection or benefit to participants, beneficiaries, 
                or individuals.
            (2) Rule of construction.--Nothing in paragraph (1) shall 
        be construed to affect or modify the provisions of section 514 
        of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1144).

SEC. 5. DEFINITIONS.

    In this Act:
            (1) Health plan.--The term ``health plan'' means--
                    (A) an employee welfare benefit plan to the extent 
                that the plan provides medical care to employees or 
                their dependents (as defined under the terms of the 
                plan) directly or through insurance, reimbursement, or 
                otherwise, and includes a group health plan (within the 
                meaning of section 5000(b)(1) of the Internal Revenue 
                Code of 1986);
                    (B) benefits consisting of medical care (provided 
                directly, through insurance or reimbursement, or 
                otherwise and whether or not provided to a group, 
                association, or individual) under any hospital or 
                medical service policy or certificate, hospital or 
                medical service plan contract, or health maintenance 
                organization group contract offered by an insurer or a 
                health maintenance organization;
                    (C) a State medical assistance plan under title XIX 
                of the Social Security Act;
                    (D) a medicare supplemental policy under section 
                1882 of the Social Security Act;
                    (E) a health plan under chapter 89 of title 5, 
                United States Code; and
                    (F) benefits provided under a risk-sharing contract 
                under section 1876 of the Social Security Act.
            (2) Mail-order prescription drug coverage.--The term 
        ``mail-order prescription drug coverage'' means provision of 
        benefits for prescription drugs and biologicals that are 
        delivered directly to beneficiaries through the mail or similar 
        means.
            (3) Non-mail-order prescription drug coverage.--The term 
        ``non-mail-order prescription drug coverage'' means the 
        provision of benefits for prescription drugs and biologicals 
        through one or more local pharmacies.
            (4) Local pharmacy.--The term ``local pharmacy'' means, 
        with respect to a prescription drug or biological and a 
        beneficiary, an establishment that is authorized to dispense 
        such drug or biological and that is located within such 
        distance (not to exceed 5 miles in the case of a beneficiary 
        residing in an urban area or 10 miles in the case of a 
        beneficiary residing in a non-urban area) of the residence of 
        such beneficiary, as the Secretary of Health and Human Services 
        shall prescribe.
            (5) Employee health benefit plan.--The term ``employee 
        health benefit plan'' means any employee welfare benefit plan, 
        governmental plan, or church plan (as defined under paragraphs 
        (1), (32), and (33) of section 3 of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1002 (1), (32), and 
        (33))), that provides or pays for health benefits (such as 
        provider and hospital benefits) for participants and 
        beneficiaries (as defined in such section) whether--
                    (A) directly;
                    (B) through a health plan offered by a health 
                maintenance organization or insurer; or
                    (C) otherwise.
        Such term includes any health benefit plan under section 5(e) 
        of the Peace Corps Act (22 U.S.C. 2504(e)).
            (6) Health maintenance organization; hmo.--The terms 
        ``health maintenance organization'' and ``HMO'' mean--
                    (A) a federally qualified health maintenance 
                organization (as defined in section 1301(a) of the 
                Public Health Service Act (42 U.S.C. 300e(a))),
                    (B) an organization recognized under State law as a 
                health maintenance organization, or
                    (C) a similar organization regulated under State 
                law for solvency in the same manner and to the same 
                extent as such a health maintenance organization,
        if it is subject to State law which regulates insurance (within 
        the meaning of section 514(b)(2) of the Employee Retirement 
        Income Security Act of 1974).
            (7) Insurer.--The term ``insurer'' means an insurance 
        company, insurance service, or insurance organization which is 
        licensed to engage in the business of insurance in a State and 
        which is subject to State law which regulates insurance (within 
        the meaning of section 514(b)(2)(A) of the Employee Retirement 
        Income Security Act of 1974).
            (8) State.--The term ``State'' means each of the several 
        States, the District of Columbia, Puerto Rico, the United 
        States Virgin Islands, Guam, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands.

SEC. 6. EFFECTIVE DATE.

    This Act shall apply to coverage provided under--
            (1) health plans described in section 5(1)(A), for plan 
        years beginning more than 6 months after the date of the 
        enactment of this Act, or
            (2) other health plans, for contract years beginning more 
        than 6 months after the date of the enactment of this Act.
Prescription Drug Benefit Equity Act of 1996 - Prohibits a health plan from providing mail-order prescription drug coverage without also providing non-mail-order prescription drug coverage meeting benefit and cost-sharing requirements.  Provides for enforcement.
Prescription Drug Benefit Equity Act of 1996