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.
after the first day of the first plan year in which such
requirements 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. Equity in provision of prescription drug coverage.’’.
(3) 
INTERNAL
REVENUE
CODE
AMEND-
MENTS.—Subchapter B of chapter 100 of the Inter-
nal Revenue Code of 1986 is amended—
(A) in the table of sections, by inserting
after the item relating to section 9812 the fol-
lowing new item:
‘‘Sec. 9813. Equity in provision of prescription drug coverage.’’;
and
(B) by inserting after section 9812 the fol-
lowing:
‘‘SEC. 9813. EQUITY IN PROVISION OF PRESCRIPTION DRUG
COVERAGE.
‘‘(a) EQUITY IN PROVISION OF PRESCRIPTION DRUG
COVERAGE.—
‘‘(1) IN GENERAL.—A group health plan that
provides for mail-order prescription 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 provides
non-mail-order prescription drug coverage 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 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 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 subsection (a).’’.
(b) INDIVIDUAL HEALTH INSURANCE.—(1) Part B
of title XXVII of the Public Health Service Act is amend-
ed by inserting after section 2752 the following new sec-
tion:
‘‘SEC. 2753. EQUITY IN PROVISION OF PRESCRIPTION DRUG
COVERAGE.
‘‘(a) IN GENERAL.—The provisions of section 2707
(other than subsection (d)) shall apply to health insurance
coverage offered by a health insurance issuer in the indi-
vidual 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 sec-
tion 714(d) 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) APPLICATION
TO MEDICARE MANAGED CARE
PLANS.—
(1) 
MEDICARE+CHOICE
PLANS.—Section
1852(d)(1) of the Social Security Act (42 U.S.C.
1395w–22(d)(1)) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (D);
(B) by striking the period at the end of
subparagraph (E) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(F) meets the requirements of section
2753 of the Public Health Service Act with re-
spect to individuals enrolled with the organiza-
tion under this part.’’.
(2) SECTION 1876.—Section 1876(c)(4) of the
Social Security Act (42 U.S.C. 1395mm(c)(4)) is
amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (A);
(B) by striking the period at the end of
subparagraph (B) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(C) meets the requirements of section 2753 of
the Public Health Service Act with respect to indi-
viduals enrolled with the organization under this sec-
tion.’’.
(d) APPLICATION
TO MEDICAID MANAGED CARE
PLANS.—Title XIX of such Act (42 U.S.C. 1396 et seq.)
is amended by inserting after section 1908 the following
new section:
‘‘EQUITY IN PROVISION OF PRESCRIPTION DRUG
COVERAGE
‘‘SEC. 1909. (a) IN GENERAL.—A State plan may
not be approved under this title, and Federal financial
participation not available under section 1903(a) with re-
spect to such a plan, unless the plan requires each health
insurance issuer or other entity with a contract with such
plan to provide coverage or benefits to individuals eligible
for medical assistance under the plan to comply with the
provisions of section 2753 of the Public Health Service
Act with respect to such coverage or benefits.
‘‘(b) WAIVERS PROHIBITED.—The requirement of
subsection (a) may not be waived under section 1115 or
section 1915(b).’’.
(e) MEDIGAP AND MEDICARE SELECT POLICIES.—
Section 1882 of such Act (42 U.S.C. 1395ss) is
amended—
(1) in subsection (s)(2), by adding at the end
the following new subparagraph:
‘‘(E) An issuer of a medicare supplemental policy (as
defined in section 1882(g)) shall comply with the require-
ments of section 2753 of the Public Health Service Act
with respect to benefits offered under such policy.’’; and
(2) in subsection (t)(1)—
(A) in subparagraph (B), by inserting
‘‘subject to subparagraph (G),’’ after ‘‘(B)’’,
(B) by striking ‘‘and’’ at the end of sub-
paragraph (E),
(C) by striking the period at the end of
subparagraph (F) and inserting ‘‘; and’’, and
(D) by adding at the end the following new
subparagraph:
‘‘(G) the issuer of the policy complies with the
requirements of section 2753 of the Public Health
Service Act with respect to enrollees under this sub-
section .’’.
(f) FEHBP.—Section 8902 of title 5, United States
Code, is amended by adding at the end the following the
following new subsection:
‘‘(p) A contract may not be made or a plan approved
which excludes does not comply with the requirements of
section 2753 of the Public Health Service Act.’’.
(g) EFFECTIVE DATES.—(1)(A) Subject to subpara-
graph (B), the amendments made by subsection (a) apply
with respect to group health plans for plan years begin-
ning on or after January 1, 2000.
(B) In the case of a group health plan maintained
pursuant to 1 or more collective bargaining agreements
between employee representatives and 1 or more employ-
ers ratified before the date of enactment of this Act, the
amendments made subsection (a) do not apply to plan
years beginning before the later of—
(i) the date on which the last collective bar-
gaining agreements relating to the plan terminates
(determined without regard to any extension thereof
agreed to after the date of enactment of this Act),
or
(ii) January 1, 2000.
For purposes of clause (i), any plan amendment made pur-
suant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any re-
quirement added by subsection (a) shall not be treated as
a termination of such collective bargaining agreement.
(2) 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 January 1, 2000.
(3) The amendment made by subsection (c) apply to
contracts for contract periods beginning on or after Janu-
ary 1, 2000.
(4) The amendment made by subsection (d) apply to
Federal financial participation for State plan expenditures
made on or after January 1, 2000.
(5) The amendments made by subsection (e) apply
with respect to medicare supplemental policies and medi-
care select policies offered, sold, issued, renewed, in effect,
or operated on and after January 1, 2000.
(6) The amendment made by subsection (f) apply
with respect to contracts for periods beginning on and
after January 1, 2000.
(h) COORDINATION OF ADMINISTRATION.—The Sec-
retary 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 mat-
ter over which two or more such Secretaries have re-
sponsibility 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.
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