To amend the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1986 to require that group and individual health insurance coverage and group health plans provide coverage for hair prostheses for individuals with scalp hair loss as a result of alopecia areata.

SECTION 1. COVERAGE OF HAIR PROSTHESES FOR INDIVIDUALS WITH SCALP HAIR 
              LOSS AS A RESULT OF ALOPECIA AREATA.

    (a) Group Health Plans.--
            (1) Public health service act amendments.--(A) Subpart 2 of 
        part A of title XXVII of the Public Health Service Act is 
        amended by adding at the end the following new section:

``SEC. 2707. REQUIREMENT FOR COVERAGE OF HAIR PROSTHESES FOR 
              INDIVIDUALS WITH SCALP HAIR LOSS AS A RESULT OF ALOPECIA 
              AREATA.

    ``(a) Requirement.--
            ``(1) In general.--A group health plan, and a health 
        insurance issuer offering health insurance coverage in 
        connection with a group health plan, shall provide coverage for 
        scalp hair prosthesis for a participant or beneficiary who has 
        scalp hair loss as a result of alopecia areata if the attending 
        physician of the participant or beneficiary certifies in 
        writing the medical necessity of that proposed course of 
        rehabilitative treatment.
            ``(2) Cost-Sharing.--The coverage required under this 
        subsection is not subject to dollar limits, deductibles, and 
        coinsurance provisions that are less favorable than those for 
        other prosthesis coverage under the plan or coverage, except 
        that a group health plan or health insurance issuer may provide 
        that the plan or issuer will only pay for 80 percent of the 
        customary and usual costs of the scalp hair prosthesis 
        exclusive of any deductible.
            ``(3) Definition.--As used in this subsection, the term 
        `scalp hair prosthesis' includes any artificial substitutes for 
        scalp hair.
    ``(b) Notice.--A group health plan under this part shall comply 
with the notice requirement under section 714(b) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
of this section as if such section applied to such plan.''.
            (B) Section 2723(c) of such Act (42 U.S.C. 300gg-23(c)) is 
        amended by striking ``section 2704'' and inserting ``sections 
        2704 and 2707''.
            (2) ERISA amendments.--(A) Subpart B of part 7 of subtitle 
        B of title I of the Employee Retirement Income Security Act of 
        1974 is amended by adding at the end the following new section:

``SEC. 714. REQUIREMENT FOR COVERAGE OF HAIR PROSTHESES FOR INDIVIDUALS 
              WITH SCALP HAIR LOSS AS A RESULT OF ALOPECIA AREATA.

    ``(a) Requirement.--
            ``(1) In general.--A group health plan, and a health 
        insurance issuer offering health insurance coverage in 
        connection with a group health plan, shall provide coverage for 
        scalp hair prosthesis for a participant or beneficiary who has 
        scalp hair loss as a result of alopecia areata if the attending 
        physician of the participant or beneficiary certifies in 
        writing the medical necessity of that proposed course of 
        rehabilitative treatment.
            ``(2) Cost-sharing.--The coverage required under this 
        subsection is not subject to dollar limits, deductibles, and 
        coinsurance provisions that are less favorable than those for 
        other prosthesis coverage under the plan or coverage, except 
        that a group health plan or health insurance issuer may provide 
        that the plan or issuer will only pay for 80 percent of the 
        customary and usual costs of the scalp hair prosthesis 
        exclusive of any deductible.
            ``(3) Definition.--As used in this subsection, the term 
        `scalp hair prosthesis' includes any artificial substitutes for 
        scalp hair.
    ``(b) Notice Under Group Health Plan.--The imposition of the 
requirement of this section shall be treated as a material modification 
in the terms of the plan described in section 102(a)(1), for purposes 
of assuring notice of such requirements under the plan; except that the 
summary description required to be provided under the last sentence of 
section 104(b)(1) with respect to such modification shall be provided 
by not later than 60 days after the first day of the first plan year in 
which such requirement apply.''.
            (B) Section 731(c) of such Act (29 U.S.C. 1191(c)) is 
        amended by striking ``section 711'' and inserting ``sections 
        711 and 714''.
            (C) Section 732(a) of such Act (29 U.S.C. 1191a(a)) is 
        amended by striking ``section 711'' and inserting ``sections 
        711 and 714''.
            (D) The table of contents in section 1 of such Act is 
        amended by inserting after the item relating to section 713 the 
        following new item:

``Sec. 714. Requirement for coverage of hair prostheses for individuals 
                            with scalp hair loss as a result of 
                            alopecia areata.''.
            (3) Internal revenue code amendments.--
                    (A) In general.--Subchapter B of chapter 100 of the 
                Internal Revenue Code of 1986 is amended--
                            (i) in the table of sections, by inserting 
                        after the item relating to section 9812 the 
                        following new item:

                              ``Sec. 9813. Requirement for coverage of 
                                        hair prostheses for individuals 
                                        with scalp hair loss as a 
                                        result of alopecia areata.''; 
                                        and
                            (ii) by inserting after section 9812 the 
                        following:

``SEC. 9813. REQUIREMENT FOR COVERAGE OF HAIR PROSTHESES FOR 
              INDIVIDUALS WITH SCALP HAIR LOSS AS A RESULT OF ALOPECIA 
              AREATA.

    ``(a) Requirement.--A group health plan shall provide coverage for 
scalp hair prosthesis for an participant or beneficiary who has scalp 
hair loss as a result of alopecia areata if the attending physician of 
the participant or beneficiary certifies in writing the medical 
necessity of that proposed course of rehabilitative treatment.
    ``(b) Cost-Sharing.--The coverage required under this section is 
not subject to dollar limits, deductibles, and coinsurance provisions 
that are less favorable than those for other prosthesis coverage under 
the plan or coverage, except that a group health plan may provide that 
the plan will only pay for 80 percent of the customary and usual costs 
of the scalp hair prosthesis exclusive of any deductible.
    ``(c) Definition.--As used in this section, the term `scalp hair 
prosthesis' includes any artificial substitutes for scalp hair.''.
                    (B) Conforming amendment.--Section 4980D(d)(1) of 
                such Code is amended by striking ``section 9811'' and 
                inserting ``sections 9811 and 9813''.
    (b) Individual Health Insurance.--(1) Part B of title XXVII of the 
Public Health Service Act is amended by inserting after section 2752 
the following new section:

``SEC. 2753. REQUIREMENT FOR COVERAGE OF HAIR PROSTHESES FOR 
              INDIVIDUALS WITH SCALP HAIR LOSS AS A RESULT OF ALOPECIA 
              AREATA.

    ``(a) In General.--The provisions of section 2707(a) shall apply to 
health insurance coverage offered by a health insurance issuer in the 
individual market in the same manner as they apply to health insurance 
coverage offered by a health insurance issuer in connection with a 
group health plan in the small or large group market.
    ``(b) Notice.--A health insurance issuer under this part shall 
comply with the notice requirement under section 714(b) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
referred to in subsection (a) as if such section applied to such issuer 
and such issuer were a group health plan.''.
    (2) Section 2762(b)(2) of such Act (42 U.S.C. 300gg-62(b)(2)) is 
amended by striking ``section 2751'' and inserting ``sections 2751 and 
2753''.
    (c) Effective Dates.--
            (1) Group health plans and group health insurance 
        coverage.--Subject to paragraph (3), the amendments made by 
        subsection (a) apply with respect to group health plans for 
        plan years beginning on or after January 1, 2002.
            (2) Individual health insurance coverage.--The amendments 
        made by subsection (b) apply with respect to health insurance 
        coverage offered, sold, issued, renewed, in effect, or operated 
        in the individual market on or after such date.
            (3) Collective bargaining exception.--In the case of a 
        group health plan maintained pursuant to 1 or more collective 
        bargaining agreements between employee representatives and 1 or 
        more employers ratified before the date of enactment of this 
        Act, the amendments made subsection (a) shall not apply to plan 
        years beginning before the later of--
                    (A) the date on which the last collective 
                bargaining agreements relating to the plan terminates 
                (determined without regard to any extension thereof 
                agreed to after the date of enactment of this Act), or
                    (B) January 1, 2002.
        For purposes of subparagraph (A), any plan amendment made 
        pursuant to a collective bargaining agreement relating to the 
        plan which amends the plan solely to conform to any requirement 
        added by subsection (a) shall not be treated as a termination 
        of such collective bargaining agreement.
    (d) Coordination of Administration.--The Secretary of Labor, the 
Secretary of the Treasury, and the Secretary of Health and Human 
Services shall ensure, through the execution of an interagency 
memorandum of understanding among such Secretaries, that--
            (1) regulations, rulings, and interpretations issued by 
        such Secretaries relating to the same matter over which two or 
        more such Secretaries have responsibility under the provisions 
        of this Act (and the amendments made thereby) are administered 
        so as to have the same effect at all times; and
            (2) coordination of policies relating to enforcing the same 
        requirements through such Secretaries in order to have a 
        coordinated enforcement strategy that avoids duplication of 
        enforcement efforts and assigns priorities in enforcement.

Summary: Amends the Public Health Service Act, the Employee Retirement Income Security Act, and the Internal Revenue Code to require group health plans and health insurance issuers offering coverage in connection with such plans to provide coverage for scalp hair prostheses for participants or beneficiaries who have scalp hair loss as a result of alopecia areata, if the attending physician certifies the medical necessity of that proposed course of rehabilitative treatment. Provides that such coverage is not subject to dollar limits, deductibles, and coinsurance provisions that are less favorable than those for other prosthesis coverage under the plan. But authorizes the plan or issuer to pay for only 80 percent of the customary and usual costs of the prosthesis exclusive of any deductible. Amends the Public Health Service Act to apply this Act's requirement to health insurance coverage offered by a health insurance issuer in the individual market in the same manner as it applies to coverage offered in the small or large group market.