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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1147 Introduced in Senate (IS)]

105th CONGRESS
  1st Session
                                S. 1147

  To amend the Public Health Service Act, Employee Retirement Income 
Security Act of 1974, and the Internal Revenue Code of 1986 to provide 
 for nondiscriminatory coverage for substance abuse treatment services 
          under private group and individual health coverage.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 4, 1997

 Mr. Wellstone introduced the following bill; which was read twice and 
         referred to the Committee on Labor and Human Resources

_______________________________________________________________________

                                 A BILL

 
  To amend the Public Health Service Act, Employee Retirement Income 
Security Act of 1974, and the Internal Revenue Code of 1986 to provide 
 for nondiscriminatory coverage for substance abuse treatment services 
          under private group and individual health coverage.

    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 ``Substance Abuse Treatment Parity Act 
of 1997''.

SEC. 2. PARITY IN SUBSTANCE ABUSE TREATMENT BENEFITS.

    (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 (as 
        added by section 604(a) of the Newborns' and Mothers' Health 
        Protection Act of 1996 and amended by section 703(a) of the 
        Mental Health Parity Act of 1996) is amended by adding at the 
        end the following new section:

``SEC. 2706. PARITY IN THE APPLICATION OF TREATMENT LIMITATIONS AND 
              FINANCIAL REQUIREMENTS TO SUBSTANCE ABUSE TREATMENT 
              BENEFITS.

    ``(a) In General.--In the case of a group health plan (or health 
insurance coverage offered in connection with such a plan) that 
provides both medical and surgical benefits and substance abuse 
treatment benefits, the plan or coverage shall not impose treatment 
limitations or financial requirements on the substance abuse treatment 
benefits unless similar limitations or requirements are imposed for 
medical and surgical benefits.
    ``(b) Construction.--Nothing in this section shall be construed--
            ``(1) as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        substance abuse treatment benefits; or
            ``(2) to prevent a group health plan or a health insurance 
        issuer offering group health insurance coverage from 
        negotiating the level and type of reimbursement with a provider 
        for care provided in accordance with this section.
    ``(c) Exemptions.--
            ``(1) Small employer exemption.--
                    ``(A) In general.--This section shall not apply to 
                any group health plan (and group health insurance 
                coverage offered in connection with a group health 
                plan) for any plan year of a small employer.
                    ``(B) Small employer.--For purposes of subparagraph 
                (A), the term `small employer' means, in connection 
                with a group health plan with respect to a calendar 
                year and a plan year, an employer who employed an 
                average of at least 2 but not more than 50 employees on 
                business days during the preceding calendar year and 
                who employs at least 2 employees on the first day of 
                the plan year.
                    ``(C) Application of certain rules in determination 
                of employer size.--For purposes of this paragraph--
                            ``(i) Application of aggregation rule for 
                        employers.--Rules similar to the rules under 
                        subsections (b), (c), (m), and (o) of section 
                        414 of the Internal Revenue Code of 1986 shall 
                        apply for purposes of treating persons as a 
                        single employer.
                            ``(ii) Employers not in existence in 
                        preceding year.--In the case of an employer 
                        which was not in existence throughout the 
                        preceding calendar year, the determination of 
                        whether such employer is a small employer shall 
                        be based on the average number of employees 
                        that it is reasonably expected such employer 
                        will employ on business days in the current 
                        calendar year.
                            ``(iii) Predecessors.--Any reference in 
                        this paragraph to an employer shall include a 
                        reference to any predecessor of such employer.
            ``(2) Increased cost exemption.--This section shall not 
        apply with respect to a group health plan (or health insurance 
        coverage offered in connection with a group health plan) if the 
        application of this section to such plan (or to such coverage) 
        results in an increase in the cost under the plan (or for such 
        coverage) of at least 1 percent.
    ``(d) Separate Application to Each Option Offered.--In the case of 
a group health plan that offers a participant or beneficiary two or 
more benefit package options under the plan, the requirements of this 
section shall be applied separately with respect to each such option.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Treatment limitation.--The term `treatment 
        limitation' means, with respect to benefits under a group 
        health plan or health insurance coverage, any day or visit 
        limits imposed on coverage of benefits under the plan or 
        coverage during a period of time.
            ``(2) Financial requirement.--The term `financial 
        requirement' means, with respect to benefits under a group 
        health plan or health insurance coverage, any deductible, 
        coinsurance, or cost-sharing or an annual or lifetime dollar 
        limit imposed with respect to the benefits under the plan or 
        coverage.
            ``(3) Medical or surgical benefits.--The term `medical or 
        surgical benefits' means benefits with respect to medical or 
        surgical services, as defined under the terms of the plan or 
        coverage (as the case may be), but does not include substance 
        abuse treatment benefits.
            ``(4) Substance abuse treatment benefits.--The term 
        `substance abuse treatment benefits' means benefits with 
        respect to substance abuse treatment services.
            ``(5) Substance abuse treatment services.--The term 
        `substance abuse services' means any of the following items and 
        services provided for the treatment of substance abuse:
                    ``(A) Inpatient treatment, including 
                detoxification.
                    ``(B) Non-hospital residential treatment.
                    ``(C) Outpatient treatment, including screening and 
                assessment, medication management, individual, group, 
                and family counseling, and relapse prevention.
                    ``(D) Prevention services, including health 
                education and individual and group counseling to 
                encourage the reduction of risk factors for substance 
                abuse.
            ``(6) Substance abuse.--The term `substance abuse' includes 
        chemical dependency.
    ``(f) Notice.--A group health plan under this part shall comply 
with the notice requirement under section 713(f) 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.
    ``(g) Sunset.--This section shall not apply to benefits for 
services furnished on or after September 30, 2002.''.
            (B) Section 2723(c) of such Act (42 U.S.C. 300gg-23(c)), as 
        amended by section 604(b)(2) of Public Law 104-204, is amended 
        by striking ``section 2704'' and inserting ``sections 2704 and 
        2706''.
            (2) ERISA amendments.--(A) Subpart B of part 7 of subtitle 
        B of title I of the Employee Retirement Income Security Act of 
        1974 (as added by section 603(a) of the Newborns' and Mothers' 
        Health Protection Act of 1996 and amended by section 702(a) of 
        the Mental Health Parity Act of 1996) is amended by adding at 
        the end the following new section:

``SEC. 713. PARITY IN THE APPLICATION OF TREATMENT LIMITATIONS AND 
              FINANCIAL REQUIREMENTS TO SUBSTANCE ABUSE TREATMENT 
              BENEFITS.

    ``(a) In General.--In the case of a group health plan (or health 
insurance coverage offered in connection with such a plan) that 
provides both medical and surgical benefits and substance abuse 
treatment benefits, the plan or coverage shall not impose treatment 
limitations or financial requirements on the substance abuse treatment 
benefits unless similar limitations or requirements are imposed for 
medical and surgical benefits.
    ``(b) Construction.--Nothing in this section shall be construed--
            ``(1) as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        substance abuse treatment benefits; or
            ``(2) to prevent a group health plan or a health insurance 
        issuer offering group health insurance coverage from 
        negotiating the level and type of reimbursement with a provider 
        for care provided in accordance with this section.
    ``(c) Exemptions.--
            ``(1) Small employer exemption.--
                    ``(A) In general.--This section shall not apply to 
                any group health plan (and group health insurance 
                coverage offered in connection with a group health 
                plan) for any plan year of a small employer.
                    ``(B) Small employer.--For purposes of subparagraph 
                (A), the term `small employer' means, in connection 
                with a group health plan with respect to a calendar 
                year and a plan year, an employer who employed an 
                average of at least 2 but not more than 50 employees on 
                business days during the preceding calendar year and 
                who employs at least 2 employees on the first day of 
                the plan year.
                    ``(C) Application of certain rules in determination 
                of employer size.--For purposes of this paragraph--
                            ``(i) Application of aggregation rule for 
                        employers.--Rules similar to the rules under 
                        subsections (b), (c), (m), and (o) of section 
                        414 of the Internal Revenue Code of 1986 shall 
                        apply for purposes of treating persons as a 
                        single employer.
                            ``(ii) Employers not in existence in 
                        preceding year.--In the case of an employer 
                        which was not in existence throughout the 
                        preceding calendar year, the determination of 
                        whether such employer is a small employer shall 
                        be based on the average number of employees 
                        that it is reasonably expected such employer 
                        will employ on business days in the current 
                        calendar year.
                            ``(iii) Predecessors.--Any reference in 
                        this paragraph to an employer shall include a 
                        reference to any predecessor of such employer.
            ``(2) Increased cost exemption.--This section shall not 
        apply with respect to a group health plan (or health insurance 
        coverage offered in connection with a group health plan) if the 
        application of this section to such plan (or to such coverage) 
        results in an increase in the cost under the plan (or for such 
        coverage) of at least 1 percent.
    ``(d) Separate Application to Each Option Offered.--In the case of 
a group health plan that offers a participant or beneficiary two or 
more benefit package options under the plan, the requirements of this 
section shall be applied separately with respect to each such option.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Treatment limitation.--The term `treatment 
        limitation' means, with respect to benefits under a group 
        health plan or health insurance coverage, any day or visit 
        limits imposed on coverage of benefits under the plan or 
        coverage during a period of time.
            ``(2) Financial requirement.--The term `financial 
        requirement' means, with respect to benefits under a group 
        health plan or health insurance coverage, any deductible, 
        coinsurance, or cost-sharing or an annual or lifetime dollar 
        limit imposed with respect to the benefits under the plan or 
        coverage.
            ``(3) Medical or surgical benefits.--The term `medical or 
        surgical benefits' means benefits with respect to medical or 
        surgical services, as defined under the terms of the plan or 
        coverage (as the case may be), but does not include substance 
        abuse treatment benefits.
            ``(4) Substance abuse treatment benefits.--The term 
        `substance abuse treatment benefits' means benefits with 
        respect to substance abuse treatment services.
            ``(5) Substance abuse treatment services.--The term 
        `substance abuse services' means any of the following items and 
        services provided for the treatment of substance abuse:
                    ``(A) Inpatient treatment, including 
                detoxification.
                    ``(B) Non-hospital residential treatment.
                    ``(C) Outpatient treatment, including screening and 
                assessment, medication management, individual, group, 
                and family counseling, and relapse prevention.
                    ``(D) Prevention services, including health 
                education and individual and group counseling to 
                encourage the reduction of risk factors for substance 
                abuse.
            ``(6) Substance abuse.--The term `substance abuse' includes 
        chemical dependency.
    ``(f) Notice under Group Health Plan.--The imposition of the 
requirements 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 requirements apply.
    ``(g) Sunset.--This section shall not apply to benefits for 
services furnished on or after September 30, 2002.''.
            (B) Section 731(c) of such Act (29 U.S.C. 1191(c)), as 
        amended by section 603(b)(1) of Public Law 104-204, is amended 
        by striking ``section 711'' and inserting ``sections 711 and 
        713''.
            (C) Section 732(a) of such Act (29 U.S.C. 1191a(a)), as 
        amended by section 603(b)(2) of Public Law 104-204, is amended 
        by striking ``section 711'' and inserting ``sections 711 and 
        713''.
            (D) The table of contents in section 1 of such Act is 
        amended by inserting after the item relating to section 712 the 
        following new item:

``Sec. 713. Parity in the application of treatment limitations and 
                            financial requirements to substance abuse 
                            treatment benefits.''.
            (3) Internal revenue code amendments.--(A) Subtitle K of 
        the Internal Revenue Code of 1986 (as added by section 401(a) 
        of the Health Insurance Portability and Accountability Act of 
        1996) is amended--
                    (i) by striking all that precedes section 9801 and 
                inserting the following:

              ``Subtitle K--Group Health Plan Requirements

                              ``Chapter 100. Group health plan 
                                        requirements.

             ``CHAPTER 100--GROUP HEALTH PLAN REQUIREMENTS

                              ``Subchapter A. Requirements relating to 
                                        portability, access, and 
                                        renewability.
                              ``Subchapter B. Other requirements.
                              ``Subchapter C. General provisions.

   ``Subchapter A--Requirements Relating to Portability, Access, and 
                              Renewability

                              ``Sec. 9801. Increased portability 
                                        through limitation on 
                                        preexisting condition 
                                        exclusions.
                              ``Sec. 9802. Prohibiting discrimination 
                                        against individual participants 
                                        and beneficiaries based on 
                                        health status.
                              ``Sec. 9803. Guaranteed renewability in 
                                        multiemployer plans and certain 
                                        multiple employer welfare 
                                        arrangements.'',
                    (ii) by redesignating sections 9804, 9805, and 9806 
                as sections 9831, 9832, and 9833, respectively,
                    (iii) by inserting before section 9831 (as so 
                redesignated) the following:

                   ``Subchapter C--General Provisions

                              ``Sec. 9831. General exceptions.
                              ``Sec. 9832. Definitions.
                              ``Sec. 9833. Regulations.'', and
                    (iv) by inserting after section 9803 the following:

                   ``Subchapter B--Other Requirements

                              ``Sec. 9811. Parity in the application of 
                                        treatment limitations and 
                                        financial requirements to 
                                        substance abuse treatment 
                                        benefits.

``SEC. 9811. PARITY IN THE APPLICATION OF TREATMENT LIMITATIONS AND 
              FINANCIAL REQUIREMENTS TO SUBSTANCE ABUSE TREATMENT 
              BENEFITS.

    ``(a) In General.--In the case of a group health plan (or health 
insurance coverage offered in connection with such a plan) that 
provides both medical and surgical benefits and substance abuse 
treatment benefits, the plan or coverage shall not impose treatment 
limitations or financial requirements on the substance abuse treatment 
benefits unless similar limitations or requirements are imposed for 
medical and surgical benefits.
    ``(b) Construction.--Nothing in this section shall be construed--
            ``(1) as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        substance abuse treatment benefits; or
            ``(2) to prevent a group health plan or a health insurance 
        issuer offering group health insurance coverage from 
        negotiating the level and type of reimbursement with a provider 
        for care provided in accordance with this section.
    ``(c) Exemptions.--
            ``(1) Small employer exemption.--
                    ``(A) In general.--This section shall not apply to 
                any group health plan (and group health insurance 
                coverage offered in connection with a group health 
                plan) for any plan year of a small employer.
                    ``(B) Small employer.--For purposes of subparagraph 
                (A), the term `small employer' means, in connection 
with a group health plan with respect to a calendar year and a plan 
year, an employer who employed an average of at least 2 but not more 
than 50 employees on business days during the preceding calendar year 
and who employs at least 2 employees on the first day of the plan year.
                    ``(C) Application of certain rules in determination 
                of employer size.--For purposes of this paragraph--
                            ``(i) Application of aggregation rule for 
                        employers.--Rules similar to the rules under 
                        subsections (b), (c), (m), and (o) of section 
                        414 of the Internal Revenue Code of 1986 shall 
                        apply for purposes of treating persons as a 
                        single employer.
                            ``(ii) Employers not in existence in 
                        preceding year.--In the case of an employer 
                        which was not in existence throughout the 
                        preceding calendar year, the determination of 
                        whether such employer is a small employer shall 
                        be based on the average number of employees 
                        that it is reasonably expected such employer 
                        will employ on business days in the current 
                        calendar year.
                            ``(iii) Predecessors.--Any reference in 
                        this paragraph to an employer shall include a 
                        reference to any predecessor of such employer.
            ``(2) Increased cost exemption.--This section shall not 
        apply with respect to a group health plan (or health insurance 
        coverage offered in connection with a group health plan) if the 
        application of this section to such plan (or to such coverage) 
        results in an increase in the cost under the plan (or for such 
        coverage) of at least 1 percent.
    ``(d) Separate Application to Each Option Offered.--In the case of 
a group health plan that offers a participant or beneficiary two or 
more benefit package options under the plan, the requirements of this 
section shall be applied separately with respect to each such option.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Treatment limitation.--The term `treatment 
        limitation' means, with respect to benefits under a group 
        health plan or health insurance coverage, any day or visit 
        limits imposed on coverage of benefits under the plan or 
        coverage during a period of time.
            ``(2) Financial requirement.--The term `financial 
        requirement' means, with respect to benefits under a group 
        health plan or health insurance coverage, any deductible, 
        coinsurance, or cost-sharing or an annual or lifetime dollar 
        limit imposed with respect to the benefits under the plan or 
        coverage.
            ``(3) Medical or surgical benefits.--The term `medical or 
        surgical benefits' means benefits with respect to medical or 
        surgical services, as defined under the terms of the plan or 
        coverage (as the case may be), but does not include substance 
        abuse treatment benefits.
            ``(4) Substance abuse treatment benefits.--The term 
        `substance abuse treatment benefits' means benefits with 
        respect to substance abuse treatment services.
            ``(5) Substance abuse treatment services.--The term 
        `substance abuse services' means any of the following items and 
        services provided for the treatment of substance abuse:
                    ``(A) Inpatient treatment, including 
                detoxification.
                    ``(B) Non-hospital residential treatment.
                    ``(C) Outpatient treatment, including screening and 
                assessment, medication management, individual, group, 
                and family counseling, and relapse prevention.
                    ``(D) Prevention services, including health 
                education and individual and group counseling to 
                encourage the reduction of risk factors for substance 
                abuse.
            ``(6) Substance abuse.--The term `substance abuse' includes 
        chemical dependency.
    ``(f) Sunset.--This section shall not apply to benefits for 
services furnished on or after September 30, 2002.''.
            (B) Conforming amendments.--
                    (i) Chapter 100 of such Code (as added by section 
                401 of the Health Insurance Portability and 
                Accountability Act of 1996 and as previously amended by 
                this section) is further amended--
                            (I) in the last sentence of section 
                        9801(c)(1), by striking ``section 9805(c)'' and 
                        inserting ``section 9832(c)'';
                            (II) in section 9831(b), by striking 
                        ``9805(c)(1)'' and inserting ``9832(c)(1)'';
                            (III) in section 9831(c)(1), by striking 
                        ``9805(c)(2)'' and inserting ``9832(c)(2)'';
                            (IV) in section 9831(c)(2), by striking 
                        ``9805(c)(3)'' and inserting ``9832(c)(3)''; 
                        and
                            (V) in section 9831(c)(3), by striking 
                        ``9805(c)(4)'' and inserting ``9832(c)(4)''.
                    (ii) Section 4980D of such Code (as added by 
                section 402 of the Health Insurance Portability and 
                Accountability Act of 1996) is amended--
                            (I) in subsection (c)(3)(B)(i)(I), by 
                        striking ``9805(d)(3)'' and inserting 
                        ``9832(d)(3)'';
                            (II) in subsection (d)(1), by inserting 
                        ``(other than a failure attributable to section 
                        9811)'' after ``on any failure'';
                            (III) in subsection (d)(3), by striking 
                        ``9805'' and inserting ``9832'';
                            (IV) in subsection (f)(1), by striking 
                        ``9805(a)'' and inserting ``9832(a)''.
                    (iii) The table of subtitles for such Code is 
                amended by striking the item relating to subtitle K (as 
                added by section 401(b) of the Health Insurance 
                Portability and Accountability Act of 1996) and 
                inserting the following new item:

                              ``Subtitle K. Group health plan 
                                        requirements.''
    (b) Individual Health Insurance.--(1) Part B of title XXVII of the 
Public Health Service Act (as added by section 605(a) of the Newborn's 
and Mother's Health Protection Act of 1996) is amended by inserting 
after section 2751 the following new section:

``SEC. 2752. PARITY IN THE APPLICATION OF TREATMENT LIMITATIONS AND 
              FINANCIAL REQUIREMENTS TO SUBSTANCE ABUSE BENEFITS.

    ``(a) In General.--The provisions of section 2706 (other than 
subsection (e)) shall apply to health insurance coverage offered by a 
health insurance issuer in the individual market in the same manner as 
it applies 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 713(f) 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)), as 
added by section 605(b)(3)(B) of Public Law 104-204, is amended by 
striking ``section 2751'' and inserting ``sections 2751 and 2752''.
    (c) Effective Dates.--(1) Subject to paragraph (3), the amendments 
made by subsection (a) shall apply with respect to group health plans 
for plan years beginning on or after January 1, 1999.
    (2) The amendment made by subsection (b) shall 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) 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, 1999.
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) Coordinated Regulations.--Section 104(1) of Health Insurance 
Portability and Accountability Act of 1996 is amended by striking 
``this subtitle (and the amendments made by this subtitle and section 
401)'' and inserting ``the provisions of part 7 of subtitle B of title 
I of the Employee Retirement Income Security Act of 1974, and the 
provisions of parts A and C of title XXVII of the Public Health Service 
Act, and chapter 1000 of the Internal Revenue Code of 1986''.
                                 <all>
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