I
107TH CONGRESS
2D SESSION
H. R. 3913
To assure equitable treatment in health care coverage of prescription drugs
under group health plans, health insurance coverage, Medicare and Med-
icaid managed care arrangements, Medigap insurance coverage, and
health plans under the Federal employees’ health benefits program
(FEHBP).
IN THE HOUSE OF REPRESENTATIVES
MARCH 7, 2002
Mrs. LOWEY (for herself, Mr. DEFAZIO, Mr. BERRY, Mr. MCNULTY, Mr.
PALLONE, and Mr. BLAGOJEVICH) introduced the following bill; which
was referred to the Committee on Energy and Commerce, and in addition
to the Committees on Ways and Means, Education and the Workforce,
and Government Reform, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned
A BILL
To assure equitable treatment in health care coverage of
prescription drugs under group health plans, health in-
surance coverage, Medicare and Medicaid managed care
arrangements, Medigap insurance coverage, and health
plans under the Federal employees’ health benefits pro-
gram (FEHBP).
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Prescription Drug
Benefit Equity Act of 2002’’.
SEC. 2. EQUITY IN PROVISION OF PRESCRIPTION DRUG
COVERAGE.
(a) GROUP HEALTH PLANS.—
(1) PUBLIC
HEALTH
SERVICE
ACT
AMEND-
MENTS.—(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. EQUITY IN PROVISION OF PRESCRIPTION DRUG
COVERAGE.
‘‘(a) EQUITY IN PROVISION OF PRESCRIPTION DRUG
COVERAGE.—
‘‘(1) IN GENERAL.—A group health plan, and a
health insurance issuer offering group health insur-
ance coverage, that provides for mail-order prescrip-
tion drug coverage (as defined in paragraph (3)(A))
shall also provide non-mail-order prescription drug
coverage consistent with paragraph (2).
‘‘(2) EQUITABLE COVERAGE.—A plan or cov-
erage provides non-mail-order prescription drug cov-
erage consistent with this paragraph only if—
‘‘(A) 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;
‘‘(B) no deductible or similar cost-sharing
is imposed with respect to benefits under the
non-mail-order prescription drug coverage un-
less such a deductible or similar cost-sharing is
imposed with respect to benefits under the mail-
order prescription drug coverage; and
‘‘(C) the benefits for the non-mail-order
coverage assures payments consistent with ei-
ther (or both) of the following clauses:
‘‘(i) 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.
‘‘(ii) 
The 
cost-sharing 
(including
deductibles, copayments, or coinsurance)
imposed with respect to non-mail-order
coverage 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 cov-
erage.
‘‘(3) DEFINITIONS.—For purposes of this sub-
section:
‘‘(A) MAIL-ORDER
PRESCRIPTION
DRUG
COVERAGE.—The term ‘mail-order prescription
drug coverage’ means provision of benefits for
prescription drugs and biologicals that are de-
livered directly to participants and beneficiaries
through the mail or similar means.
‘‘(B) 
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 phar-
macies.
‘‘(C) LOCAL PHARMACY.—The term ‘local
pharmacy’ means, with respect to a prescription
drug or biological and a participant or bene-
ficiary, an establishment that is authorized to
dispense such drug or biological and that is lo-
cated within such distance (not to exceed 5
miles in the case of a participant or beneficiary
residing in an urban area or 10 miles in the
case of a participant or beneficiary residing in
a non-urban area) of the residence of such par-
ticipant or beneficiary, as the Secretary of
Health and Human Services shall prescribe.
‘‘(b) PROHIBITIONS.—A group health plan, and a
health insurance issuer offering group health insurance
coverage in connection with a group health plan, may not
provide monetary payments or rebates to an individual to
encourage such individual to accept less than the min-
imum protections available under this section.
‘‘(c) CONSTRUCTION.—Nothing in this section shall
be construed as preventing a plan or issuer from—
‘‘(1) restricting the drugs for which benefits are
provided under the plan or health insurance cov-
erage, 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 subsection (a).
‘‘(d) NOTICE.—A group health plan under this part
shall comply with the notice requirement under section
714(d) 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 Re-
tirement Income Security Act of 1974 is amended by
adding at the end the following new section:
‘‘SEC. 714. EQUITY IN PROVISION OF PRESCRIPTION DRUG
COVERAGE.
‘‘(a) EQUITY IN PROVISION OF PRESCRIPTION DRUG
COVERAGE.—
‘‘(1) IN GENERAL.—A group health plan, and a
health insurance issuer offering group health insur-
ance coverage, that provides for mail-order prescrip-
tion drug coverage (as defined in paragraph (3)(A))
shall also provide non-mail-order prescription drug
coverage consistent with paragraph (2).
‘‘(2) EQUITABLE COVERAGE.—A plan or cov-
erage provides non-mail-order prescription drug cov-
erage consistent with this paragraph only if—
‘‘(A) 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;
‘‘(B) no deductible or similar cost-sharing
is imposed with respect to benefits under the
non-mail-order prescription drug coverage un-
less such a deductible or similar cost-sharing is
imposed with respect to benefits under the mail-
order prescription drug coverage; and
‘‘(C) the benefits for the non-mail-order
coverage assures payments consistent with ei-
ther (or both) of the following clauses:
‘‘(i) 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.
‘‘(ii) 
The 
cost-sharing 
(including
deductibles, copayments, or coinsurance)
imposed with respect to non-mail-order
coverage 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 cov-
erage.
‘‘(3) DEFINITIONS.—For purposes of this sub-
section:
‘‘(A) MAIL-ORDER
PRESCRIPTION
DRUG
COVERAGE.—The term ‘mail-order prescription
drug coverage’ means provision of benefits for
prescription drugs and biologicals that are de-
livered directly to participants and beneficiaries
through the mail or similar means.
‘‘(B) 
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 phar-
macies.
‘‘(C) LOCAL PHARMACY.—The term ‘local
pharmacy’ means, with respect to a prescription
drug or biological and a participant or bene-
ficiary, an establishment that is authorized to
dispense such drug or biological and that is lo-
cated within such distance (not to exceed 5
miles in the case of a participant or beneficiary
residing in an urban area or 10 miles in the
case of a participant or beneficiary residing in
a non-urban area) of the residence of such par-
ticipant or beneficiary, as the Secretary of
Health and Human Services shall prescribe.
‘‘(b) PROHIBITIONS.—A group health plan, and a
health insurance issuer offering group health insurance
coverage in connection with a group health plan, may not
provide monetary payments or rebates to an individual to
encourage such individual to accept less than the min-
imum protections available under this section.
‘‘(c) CONSTRUCTION.—Nothing in this section shall
be construed as preventing a plan or issuer from—
‘‘(1) restricting the drugs for which benefits are
provided under the plan or health insurance cov-
erage, 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 subsection (a).
‘‘(d) 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