I 
119TH CONGRESS 
1ST SESSION H. R. 6703 
To ensure access to affordable health insurance. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 15, 2025 
Mrs. MILLER-MEEKS introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees 
on Education and Workforce, and Ways and Means, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
of such provisions as fall within the jurisdiction of the committee con-
cerned 
A BILL 
To ensure access to affordable health insurance. 
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 ‘‘Lower Health Care 
Premiums for All Americans Act’’. 
TITLE I—IMPROVING HEALTH 
CARE OPTIONS FOR WORKERS 
SEC. 101. ASSOCIATION HEALTH PLANS. 
(a) TREATMENT OF GROUP OR ASSOCIATION OF EM-
PLOYERS.—Section 3(5) of the Employee Retirement In-
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come Security Act of 1974 (29 U.S.C. 1002(5)) is amend-
ed by inserting after ‘‘capacity’’ the following: ‘‘(including, 
for the purpose of establishing or maintaining a group 
health plan, a group or association of employers that satis-
fies the requirements of section 736(a))’’. 
(b) RULES APPLICABLE TO GROUP HEALTH PLANS 
ESTABLISHED AND MAINTAINED BY A GROUP OR ASSO-
CIATION OF EMPLOYERS.— 
(1) IN GENERAL.—Part 7 of subtitle B of title 
I of the Employee Retirement Income Security Act 
of 1974 (29 U.S.C. 1181, et seq.) is amended by 
adding at the end the following: 
‘‘SEC. 736. RULES APPLICABLE TO GROUP HEALTH PLANS 
ESTABLISHED AND MAINTAINED BY A GROUP 
OR ASSOCIATION OF EMPLOYERS. 
‘‘(a) ASSOCIATION HEALTH PLANS.—A group or as-
sociation of employers may maintain a group health plan, 
regardless of whether the employers composing such group 
or association are in the same industry, trade, or profes-
sion, if such group or association satisfies the following 
requirements: 
‘‘(1) 
GROUP
OR
ASSOCIATION
REQUIRE-
MENTS.—The group or association of employers— 
‘‘(A) shall— 
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‘‘(i) have been formed and maintained 
in good faith for purposes other than pro-
viding health insurance coverage through a 
group health plan; 
‘‘(ii) establish a governing board or 
another indicator of formality as described 
in paragraph (2); and 
‘‘(iii) have existed for at least 2 years 
prior to offering a group health plan to the 
employees of such group or association; 
and 
‘‘(iv) make health insurance coverage 
under the group health plan offered by 
such group or association available— 
‘‘(I) to at least 51 employees; 
and 
‘‘(II) to all employees of the em-
ployer members, and any dependents 
of such employees; 
‘‘(B) may only provide health insurance 
coverage through the group health plan of the 
group or association— 
‘‘(i) to an employee of an employer 
member of the group or association or a 
dependent of such an employee; or 
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‘‘(ii) as necessary to comply with part 
6; 
‘‘(C) may include a health insurance issuer 
as an employer member, except that the group 
or association may not— 
‘‘(i) be a health insurance issuer; or 
‘‘(ii) be controlled or owned by a 
health insurance issuer (or a subsidiary or 
affiliate of a health insurance issuer). 
‘‘(D) may not condition the membership of 
an employer in the group or association on any 
health status-related factor (as described in sec-
tion 702(a)(1)) relating to any employee or de-
pendent of any employee of any employer mem-
ber. 
‘‘(2) ORGANIZATIONAL REQUIREMENTS.— 
‘‘(A) GOVERNING BOARD OR FORMAL OR-
GANIZATION OF THE GROUP OR ASSOCIATION.— 
‘‘(i) IN GENERAL.—The group or as-
sociation shall have— 
‘‘(I) 
a 
formal 
organizational 
structure with a governing board and 
by-laws; or 
‘‘(II) another structure or indi-
cator of formality. 
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‘‘(ii) 
REQUIREMENT.—Both 
struc-
tures described in subclauses (I) and (II) 
of clause (i) shall comply with the require-
ments described in subparagraph (B). 
‘‘(B) FORMAL ORGANIZATION STRUCTURE 
OF GROUP OR ASSOCIATION.— 
‘‘(i) IN GENERAL.—The functions and 
activities of the group or association shall 
be controlled by the employer members in 
substance and in fact. 
‘‘(ii) 
CONTROL.—The 
control 
de-
scribed in clause (i) shall be satisfied so 
long as at least 75 percent of the positions 
on the board or other formal organiza-
tional structure are held by employer mem-
bers. 
‘‘(iii) ELECTIONS.—Each position of 
the governing board or other formal orga-
nizational structure shall be subject to 
scheduled elections, as determined by the 
group or association, and each employer- 
member shall be able to cast only one vote 
in each such election. 
‘‘(C) GROUP
HEALTH
PLAN
REQUIRE-
MENTS.— 
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‘‘(i) CONTROL.—The group health 
plan shall be controlled in substance and in 
fact by employer members participating in 
the group health plan. 
‘‘(ii) ELIGIBILITY
VERIFICATION.—A 
plan fiduciary shall verify, on a regular 
basis and pursuant to reasonable moni-
toring procedures as established by the 
plan fiduciary, whether an individual is a 
self-employed individual if such individual 
(or a beneficiary thereof) participates in 
the group health plan on the basis that 
such individual is a self-employed indi-
vidual. 
‘‘(iii) 
INELIGIBLE
SELF-EMPLOYED 
INDIVIDUALS.— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (II) and except as required 
under part 6, in the case that the 
plan fiduciary determines that an in-
dividual who participates in the group 
health plan no longer meets the re-
quirements under a self-employed in-
dividual during a plan year, the group 
health plan shall not make health in-
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surance coverage available to such in-
dividual for any plan year following 
the plan year in which such deter-
mination was made. 
‘‘(II) 
REMEDIAL
ACTION.—If, 
after the plan fiduciary determines 
that an individual described in clause 
(i) is not a self-employed individual, 
the individual furnishes to the plan fi-
duciary evidence proving that such in-
dividual is a self-employed individual, 
such individual shall be eligible to par-
ticipate in the group health plan. 
‘‘(3) DISCRIMINATION AND PRE-EXISTING CON-
DITION PROTECTIONS.—A group health plan estab-
lished and maintained by the group or association of 
employers under this section may not— 
‘‘(A) establish any rule for eligibility (in-
cluding continued eligibility) of any individual 
(including an employee of an employer member 
or a self-employed individual, or a dependent of 
such employee or self-employed individual) to 
enroll for benefits under the terms of the plan 
that discriminates based on any health status- 
related factor that relates to such individual 
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(consistent 
with 
the 
rules 
under 
section 
702(a)(1)); 
‘‘(B) require an individual (including an 
employee of an employer member or a self-em-
ployed individual, or a dependent of such em-
ployee or self-employed individual), as a condi-
tion of enrollment or continued enrollment 
under the plan, to pay a premium or contribu-
tion that is greater than the premium or con-
tribution for a similarly situated individual en-
rolled in the plan based on any health status- 
related factor that relates to such individual 
(consistent 
with 
the 
rules 
under 
section 
702(b)(1)); and 
‘‘(C) deny coverage under such plan on the 
basis of a pre-existing condition (consistent 
with the rules under section 2704 of the Public 
Health Service Act). 
‘‘(b) PREMIUM RATES FOR A GROUP OR ASSOCIA-
TION OF EMPLOYERS.— 
‘‘(1) IN GENERAL.—A group health plan estab-
lished and maintained by a group or association of 
employers that meets that requirements of this sec-
tion may, to the extent not prohibited under State 
law— 
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‘‘(A) establish base premium rates formed 
on an actuarially sound, modified community 
rating methodology that considers the pooling 
of all plan participant claims; and 
‘‘(B) utilize the specific risk profile of each 
employer member of such group or association 
to determine contribution rates for each such 
employer member’s share of a premium by ac-
tuarially adjusting the established base pre-
mium rates. 
‘‘(2) ONLY SELF EMPLOYED INDIVIDUALS.—In 
the case that a group or association is composed 
only of self-employed individuals, the group health 
plan established by such group or association shall— 
‘‘(A) treat all such self-employed individ-
uals as a single risk pool; 
‘‘(B) pool all plan participant claims; and 
‘‘(C) charge each plan participant the 
same premium rate. 
‘‘(c) TREATMENT
OF
SELF-EMPLOYED
INDIVID-
UALS.—For purposes of this section, an individual who is 
a self-employed individual shall be treated as— 
‘‘(1) an employer who may be a member of a 
group or association of employers; 
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‘‘(2) an employee who may participate in a 
group health plan established and maintained by 
such group or association; and 
‘‘(3) a participant of the group health plan in 
which the individual participates, subject to the eligi-
bility determination and monitoring requirements set 
forth in subsection (a)(2)(C)(i). 
‘‘(d) DETERMINATION OF EMPLOYER OR JOINT EM-
PLOYER STATUS.—The provision of health insurance cov-
erage by a group or association of employers may not be 
construed as evidence for establishing an employer or joint 
employer relationship under any Federal or State law. 
‘‘(e) RULES OF CONSTRUCTION.— 
‘‘(1) NO EXEMPTION FROM PHSA.—Nothing in 
this section shall be construed to exempt a group 
health plan (as defined in section 733(a)(1)) offered 
through a group or association of employers from 
the requirements of this part or from the provisions 
of part A of title XXVII of the Public Health Serv-
ice Act as incorporated by reference into this Act 
through section 715. 
‘‘(2) PRIOR OR FUTURE GUIDANCE.—Nothing 
in this section may be construed to limit or other-
wise affect the ability of a group or association of 
employers from establishing a single plan multiple 
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employer welfare arrangement as specified in any 
prior or future guidance issued by the Secretary of 
Labor that provides alternative pathways to quali-
fying as a group or association of employer for pur-
poses of section 3(5). 
‘‘(f) DEFINITIONS.—In this section— 
‘‘(1) EMPLOYER MEMBER.—The term ‘employer 
member’ means— 
‘‘(A) an employer who is a member of such 
group or association of employers and employs 
at least 1 common law employee; or 
‘‘(B) a group made up solely of self-em-
ployed individuals, within which all of the self- 
employed individual members of such group or 
association are aggregated together as a single 
employer member group, provided that such 
group includes at least 20 self-employed indi-
vidual members. 
‘‘(2) SELF-EMPLOYED INDIVIDUAL.—The term 
‘self-employed individual’ means an individual who— 
‘‘(A) does not have any common law em-
ployees; 
‘‘(B) has a bona fide ownership right in a 
trade or business, regardless of whether such 
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trade or business is incorporated or unincor-
porated; 
‘‘(C) earns a wage (as defined in section 
3121(a) of the Internal Revenue Code of 1986) 
or self-employment income (as defined in sec-
tion 1402(b) of such Code) from such trade or 
business; and 
‘‘(D) works at least 10 hours a week, or 40 
hours per month, providing personal services to 
such trade or business.’’. 
(2) CLERICAL AMENDMENT.—The table of con-
tents is amended by inserting after the item relating 
to section 734 the following: 
‘‘735. Standardized reporting format. 
‘‘736. Rules applicable to group health plans established and maintained by a 
group or association of employers.’’. 
SEC. 102. CERTAIN MEDICAL STOP-LOSS INSURANCE OB-
TAINED BY CERTAIN PLAN SPONSORS OF 
GROUP 
HEALTH 
PLANS 
NOT 
INCLUDED 
UNDER THE DEFINITION OF HEALTH INSUR-
ANCE COVERAGE. 
(a) IN GENERAL.—Section 733(b)(1) of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1191b(b)(1)) is amended by adding at the end the 
following sentence: ‘‘Such term shall not include a stop- 
loss policy obtained by a self-insured group health plan 
or a plan sponsor of a group health plan that self-insures 
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the health risks of its plan participants to reimburse the 
plan or sponsor for losses that the plan or sponsor incurs 
in providing health or medical benefits to such plan par-
ticipants in excess of a predetermined level set forth in 
the stop-loss policy obtained by such plan or sponsor.’’. 
(b) EFFECT ON OTHER LAWS.—Section 514(b) of 
the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1144(b)) is amended by adding at the end the 
following: 
‘‘(10) The provisions of this title (including part 7 
relating to group health plans) shall preempt State laws 
insofar as they may now or hereafter prevent an employee 
benefit plan that is a group health plan from insuring 
against the risk of excess or unexpected health plan claims 
losses.’’. 
SEC. 103. TREATMENT OF HEALTH REIMBURSEMENT AR-
RANGEMENTS 
INTEGRATED 
WITH 
INDI-
VIDUAL MARKET COVERAGE. 
(a) IN GENERAL.— 
(1) TREATMENT.—Section 9815(b) of the In-
ternal Revenue Code of 1986 is amended— 
(A) by striking ‘‘EXCEPTION.—Notwith-
standing subsection (a)’’ and inserting the fol-
lowing: ‘‘EXCEPTIONS.— 
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‘‘(1) SELF-INSURED GROUP HEALTH PLANS.— 
Notwithstanding subsection (a)’’, and 
(B) by adding at the end the following new 
paragraph: 
‘‘(2) CUSTOM HEALTH OPTION AND INDIVIDUAL 
CARE EXPENSE ARRANGEMENTS.— 
‘‘(A) IN GENERAL.—For purposes of this 
subchapter, a custom health option and indi-
vidual care expense arrangement shall be treat-
ed as meeting the requirements of section 9802 
and sections 2705, 2711, 2713, and 2715 of 
title XXVII of the Public Health Service Act. 
‘‘(B) CUSTOM HEALTH OPTION AND INDI-
VIDUAL
CARE
EXPENSE
ARRANGEMENTS
DE-
FINED.—For purposes of this section, the term 
‘custom health option and individual care ex-
pense arrangement’ means a health reimburse-
ment arrangement— 
‘‘(i) which is an employer-provided 
group health plan funded solely by em-
ployer contributions to provide payments 
or reimbursements for medical care subject 
to a maximum fixed dollar amount for a 
period, 
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‘‘(ii) under which such payments or 
reimbursements may only be made for 
medical care provided during periods dur-
ing which the individual is covered— 
‘‘(I) under individual health in-
surance coverage (other than coverage 
that consists solely of excepted bene-
fits), or 
‘‘(II) under part A and B of title 
XVIII of the Social Security Act or 
part C of such title, 
‘‘(iii) which meets the nondiscrimina-
tion requirements of subparagraph (C), 
‘‘(iv) which meets the substantiation 
requirements of subparagraph (D), and 
‘‘(v) which meets the notice require-
ments of subparagraph (E). 
‘‘(C) NONDISCRIMINATION.— 
‘‘(i) IN
GENERAL.—An arrangement 
meets the requirements of this subpara-
graph if an employer offering such ar-
rangement to an employee within a speci-
fied class of employee— 
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‘‘(I) offers such arrangement to 
all employees within such specified 
class on the same terms, and 
‘‘(II) does not offer any other 
group health plan (other than an ac-
count-based group health plan or a 
group health plan that consists solely 
of excepted benefits) to any employees 
within such specified class. 
In the case of an employer who offers a 
group health plan provided through health 
insurance coverage in the small group mar-
ket (that is subject to section 2701 of the 
Public Health Service Act) to all employees 
within such specified class, subclause (II) 
shall not apply to such group health plan. 
‘‘(ii) 
SPECIFIED
CLASS
OF
EM-
PLOYEE.—For purposes of this subpara-
graph, any of the following may be des-
ignated as a specified class of employee: 
‘‘(I) Full-time employees. 
‘‘(II) Part-time employees. 
‘‘(III) Salaried employees. 
‘‘(IV) Non-salaried employees. 
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‘‘(V) Employees whose primary 
site of employment is in the same rat-
ing area. 
‘‘(VI) Employees who are in-
cluded in a unit of employees covered 
under a collective bargaining agree-
ment to which the employer is subject 
(determined under rules similar to the 
rules of section 105(h)). 
‘‘(VII) Employees who have not 
met a group health plan, or health in-
surance issuer offering group health 
insurance coverage, waiting period re-
quirement that satisfies section 2708 
of the Public Health Service Act. 
‘‘(VIII) Seasonal employees. 
‘‘(IX) Employees who are non-
resident aliens and who receive no 
earned income (within the meaning of 
section 911(d)(2)) from the employer 
which constitutes income from sources 
within the United States (within the 
meaning of section 861(a)(3)). 
‘‘(X) Under such rules as the 
Secretary may prescribe, employees 
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who are hired for temporary place-
ment with an unrelated person that is 
not the common law employer. 
‘‘(XI) Such other classes of em-
ployees as the Secretary may des-
ignate. 
An employer may designate (in such man-
ner as is prescribed by the Secretary) two 
or more of the classes described in the pre-
ceding subclauses as the specified class of 
employees to which the arrangement is of-
fered for purposes of applying this sub-
paragraph. 
‘‘(iii) 
SPECIAL
RULE
FOR
NEW 
HIRES.—An employer may designate pro-
spectively so much of a specified class of 
employees as are hired after a date set by 
the employer. Such subclass of employees 
shall be treated as the specified class for 
purposes of applying clause (i). 
‘‘(iv) RULES FOR DETERMINING TYPE 
OF EMPLOYEE.—For purposes for clause 
(ii), any determination of full-time, part- 
time, or seasonal employment status shall 
be made under rules similar to the rules of 
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section 105(h) or 4980H, whichever the 
employer elects for the plan year. Such 
election shall apply with respect to all em-
ployees of the employer for the plan year. 
‘‘(v) 
PERMITTED
VARIATION.—For 
purposes of clause (i)(I), an arrangement 
shall not fail to be treated as provided on 
the same terms within a specified class 
merely 
because 
the 
maximum 
dollar 
amount of payments and reimbursements 
which may be made under the terms of the 
arrangement for the year with respect to 
each employee within such class— 
‘‘(I) increases as additional de-
pendents of the employee are covered 
under the arrangement, and 
‘‘(II) increases with respect to a 
participant as the age of the partici-
pant increases, but not in excess of an 
amount equal to 300 percent of the 
lowest maximum dollar amount with 
respect to such a participant deter-
mined without regard to age. 
‘‘(D) SUBSTANTIATION REQUIREMENTS.— 
An arrangement meets the requirements of this 
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subparagraph if the arrangement has reason-
able procedures to substantiate— 
‘‘(i) that the participant and any de-
pendents are, or will be, enrolled in cov-
erage described in subparagraph (B)(ii) as 
of the beginning of the plan year of the ar-
rangement (or as of the beginning of cov-
erage under the arrangement in the case of 
an employee who first becomes eligible to 
participate in the arrangement after the 
date notice is given with respect to the 
plan under subparagraph (E) (determined 
without regard to clause (iii) thereof), and 
‘‘(ii) any requests made for payment 
or reimbursement of medical care under 
the arrangement and that the participant 
and any dependents remain so enrolled. 
‘‘(E) NOTICE.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (iii), an arrangement meets 
the requirements of this subparagraph if, 
under the arrangement, each employee eli-
gible to participate is, not later than 60 
days before the beginning of the plan year, 
given written notice of the employee’s 
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rights and obligations under the arrange-
ment which— 
‘‘(I) is sufficiently accurate and 
comprehensive to apprise the employee 
of such rights and obligations, and 
‘‘(II) is written in a manner cal-
culated to be understood by the aver-
age employee eligible to participate. 
‘‘(ii) NOTICE
REQUIREMENTS.—Such 
notice shall include such information as the 
Secretary may by regulation prescribe. 
‘‘(iii) NOTICE
DEADLINE
FOR
CER-
TAIN EMPLOYEES.—In the case of an em-
ployee— 
‘‘(I) who first becomes eligible to 
participate in the arrangement after 
the date notice is given with respect 
to the plan under clause (i) (deter-
mined without regard to this clause), 
or 
‘‘(II) whose employer is first es-
tablished fewer than 120 days before 
the beginning of the first plan year of 
the arrangement, 
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the requirements of this subparagraph 
shall be treated as met if the notice re-
quired under clause (i) is provided not 
later than the date the arrangement may 
take effect with respect to such em-
ployee.’’. 
(2) TREATMENT OF CURRENT RULES RELATING 
TO CERTAIN ARRANGEMENTS.— 
(A) NO INFERENCE.—To the extent not 
inconsistent with the amendments made by this 
subsection— 
(i) no inference shall be made from 
such amendments with respect to the rules 
prescribed in the Federal Register on June 
20, 2019, (84 Fed. Reg. 28888) relating to 
health reimbursement arrangements and 
other account-based group health plans, 
and 
(ii) any reference to custom health op-
tion and individual care expense arrange-
ments shall for purposes of such rules be 
treated as including a reference to indi-
vidual coverage health reimbursement ar-
rangements. 
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(B) OTHER CONFORMING OF RULES.—The 
Secretary of the Treasury, the Secretary of 
Health and Human Services, and the Secretary 
of Labor shall modify such rules as may be nec-
essary to conform to the amendments made by 
this subsection. 
(3) PARTICIPANTS
IN
CHOICE
ARRANGEMENT 
ELIGIBLE FOR PURCHASE OF EXCHANGE INSURANCE 
UNDER
CAFETERIA
PLAN.—Section 125(f)(3) of 
such Code is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) EXCEPTION
FOR
PARTICIPANTS
IN 
CHOICE
ARRANGEMENT.—Subparagraph 
(A) 
shall not apply in the case of an employee par-
ticipating in a custom health option and indi-
vidual care expense arrangement (within the 
meaning of section 9815(b)(2)) offered by the 
employee’s employer.’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to plan years begin-
ning after December 31, 2025. 
(b) INCLUSION OF CHOICE ARRANGEMENT PER-
MITTED BENEFITS ON W–2.— 
(1) IN
GENERAL.—Section 6051(a) of such 
Code is amended by striking ‘‘and’’ at the end of 
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‘‘SEC. 2799A–11. OVERSIGHT OF ENTITIES THAT PROVIDE 
PHARMACY BENEFIT MANAGEMENT SERV-
ICES. 
‘‘(a) IN GENERAL.—For plan years beginning on or 
after the date that is 30 months after the date of enact-
ment of this section (referred to in this subsection and 
subsection (b) as the ‘effective date’), a group health plan 
or a health insurance issuer offering group health insur-
ance coverage, or an entity providing pharmacy benefit 
management services on behalf of such a plan or issuer, 
shall not enter into a contract, including an extension or 
renewal of a contract, entered into on or after the effective 
date, with an applicable entity unless such applicable enti-
ty agrees to— 
‘‘(1) not limit or delay the disclosure of infor-
mation to the group health plan (including such a 
plan offered through a health insurance issuer) in 
such a manner that prevents an entity providing 
pharmacy benefit management services on behalf of 
a group health plan or health insurance issuer offer-
ing group health insurance coverage from making 
the reports described in subsection (b); and 
‘‘(2) provide the entity providing pharmacy ben-
efit management services on behalf of a group health 
plan or health insurance issuer relevant information 
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necessary to make the reports described in sub-
section (b). 
‘‘(b) REPORTS.— 
‘‘(1) IN GENERAL.—For plan years beginning 
on or after the effective date, in the case of any con-
tract between a group health plan or a health insur-
ance issuer offering group health insurance coverage 
offered in connection with such a plan and an entity 
providing pharmacy benefit management services on 
behalf of such plan or issuer, including an extension 
or renewal of such a contract, entered into on or 
after the effective date, the entity providing phar-
macy benefit management services on behalf of such 
a group health plan or health insurance issuer, not 
less frequently than every 6 months (or, at the re-
quest of a group health plan, not less frequently 
than quarterly, and under the same conditions, 
terms, and cost of the semiannual report under this 
subsection), shall submit to the group health plan a 
report in accordance with this section. Each such re-
port shall be made available to such group health 
plan in plain language, in a machine-readable for-
mat, and as the Secretary may determine, other for-
mats. Each such report shall include the information 
described in paragraph (2). 
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‘‘(2) INFORMATION DESCRIBED.—For purposes 
of paragraph (1), the information described in this 
paragraph is, with respect to drugs covered by a 
group health plan or group health insurance cov-
erage offered by a health insurance issuer in connec-
tion with a group health plan during each reporting 
period— 
‘‘(A) in the case of a group health plan 
that is offered by a specified large employer or 
that is a specified large plan, and is not offered 
as health insurance coverage, or in the case of 
health insurance coverage for which the election 
under paragraph (3) is made for the applicable 
reporting period— 
‘‘(i) a list of drugs for which a claim 
was filed and, with respect to each such 
drug on such list— 
‘‘(I) the contracted compensation 
paid by the group health plan or 
health insurance issuer for each cov-
ered drug (identified by the National 
Drug Code) to the entity providing 
pharmacy benefit management serv-
ices or other applicable entity on be-
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half of the group health plan or health 
insurance issuer; 
‘‘(II) the contracted compensa-
tion paid to the pharmacy, by any en-
tity providing pharmacy benefit man-
agement services or other applicable 
entity on behalf of the group health 
plan or health insurance issuer, for 
each covered drug (identified by the 
National Drug Code); 
‘‘(III) for each such claim, the 
difference between the amount paid 
under subclause (I) and the amount 
paid under subclause (II); 
‘‘(IV) the proprietary name, es-
tablished name or proper name, and 
National Drug Code; 
‘‘(V) for each claim for the drug 
(including original prescriptions and 
refills) and for each dosage unit of the 
drug for which a claim was filed, the 
type of dispensing channel used to 
furnish the drug, including retail, mail 
order, or specialty pharmacy; 
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‘‘(VI) with respect to each drug 
dispensed, for each type of dispensing 
channel (including retail, mail order, 
or specialty pharmacy)— 
‘‘(aa) whether such drug is a 
brand name drug or a generic 
drug, and— 
‘‘(AA) in the case of a 
brand name drug, the whole-
sale acquisition cost, listed 
as cost per days supply and 
cost per dosage unit, on the 
date such drug was dis-
pensed; and 
‘‘(BB) in the case of a 
generic drug, the average 
wholesale price, listed as 
cost per days supply and 
cost per dosage unit, on the 
date such drug was dis-
pensed; and 
‘‘(bb) the total number of— 
‘‘(AA) 
prescription 
claims 
(including 
original 
prescriptions and refills); 
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‘‘(BB) participants and 
beneficiaries for whom a 
claim for such drug was 
filed through the applicable 
dispensing channel; 
‘‘(CC) dosage units and 
dosage units per fill of such 
drug; and 
‘‘(DD) days supply of 
such drug per fill; 
‘‘(VII) the net price per course of 
treatment or single fill, such as a 30- 
day supply or 90-day supply to the 
plan or coverage after rebates, fees, 
alternative discounts, or other remu-
neration received from applicable enti-
ties; 
‘‘(VIII) the total amount of out- 
of-pocket spending by participants 
and beneficiaries on such drug, in-
cluding spending through copayments, 
coinsurance, and deductibles, but not 
including any amounts spent by par-
ticipants and beneficiaries on drugs 
not covered under the plan or cov-
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erage, or for which no claim is sub-
mitted under the plan or coverage; 
‘‘(IX) the total net spending on 
the drug; 
‘‘(X) the total amount received, 
or expected to be received, by the plan 
or issuer from any applicable entity in 
rebates, fees, alternative discounts, or 
other remuneration; 
‘‘(XI) the total amount received, 
or expected to be received, by the enti-
ty providing pharmacy benefit man-
agement services, from applicable en-
tities, in rebates, fees, alternative dis-
counts, or other remuneration from 
such entities— 
‘‘(aa) for claims incurred 
during the reporting period; and 
‘‘(bb) that is related to utili-
zation of such drug or spending 
on such drug; and 
‘‘(XII) to the extent feasible, in-
formation on the total amount of re-
muneration for such drug, including 
copayment assistance dollars paid, co-
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payment cards applied, or other dis-
counts provided by each drug manu-
facturer (or entity administering co-
payment assistance on behalf of such 
drug manufacturer), to the partici-
pants and beneficiaries enrolled in 
such plan or coverage; 
‘‘(ii) a list of each therapeutic class 
(as defined by the Secretary) for which a 
claim was filed under the group health 
plan or health insurance coverage during 
the reporting period, and, with respect to 
each such therapeutic class— 
‘‘(I) the total gross spending on 
drugs in such class before rebates, 
price 
concessions, 
alternative 
dis-
counts, or other remuneration from 
applicable entities; 
‘‘(II) the net spending in such 
class after such rebates, price conces-
sions, alternative discounts, or other 
remuneration from applicable entities; 
‘‘(III) the total amount received, 
or expected to be received, by the enti-
ty providing pharmacy benefit man-
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agement services, from applicable en-
tities, in rebates, fees, alternative dis-
counts, or other remuneration from 
such entities— 
‘‘(aa) for claims incurred 
during the reporting period; and 
‘‘(bb) that is related to utili-
zation of drugs or drug spending; 
‘‘(IV) the average net spending 
per 30-day supply and per 90-day 
supply by the plan or by the issuer 
with respect to such coverage and its 
participants and beneficiaries, among 
all drugs within the therapeutic class 
for which a claim was filed during the 
reporting period; 
‘‘(V) the number of participants 
and beneficiaries who filled a prescrip-
tion for a drug in such class, includ-
ing the National Drug Code for each 
such drug; 
‘‘(VI) if applicable, a description 
of the formulary tiers and utilization 
mechanisms (such as prior authoriza-
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tion or step therapy) employed for 
drugs in that class; and 
‘‘(VII) the total out-of-pocket 
spending under the plan or coverage 
by participants and beneficiaries, in-
cluding spending through copayments, 
coinsurance, and deductibles, but not 
including any amounts spent by par-
ticipants and beneficiaries on drugs 
not covered under the plan or cov-
erage or for which no claim is sub-
mitted under the plan or coverage; 
‘‘(iii) with respect to any drug for 
which gross spending under the group 
health plan or health insurance coverage 
exceeded $10,000 during the reporting pe-
riod or, in the case that gross spending 
under the group health plan or coverage 
exceeded $10,000 during the reporting pe-
riod with respect to fewer than 50 drugs, 
with respect to the 50 prescription drugs 
with the highest spending during the re-
porting period— 
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‘‘(I) a list of all other drugs in 
the same therapeutic class as such 
drug; 
‘‘(II) if applicable, the rationale 
for the formulary placement of such 
drug in that therapeutic category or 
class, selected from a list of standard 
rationales established by the Sec-
retary, in consultation with stake-
holders; and 
‘‘(III) any change in formulary 
placement compared to the prior plan 
year; and 
‘‘(iv) in the case that such plan or 
issuer (or an entity providing pharmacy 
benefit management services on behalf of 
such plan or issuer) has an affiliated phar-
macy or pharmacy under common owner-
ship, including mandatory mail and spe-
cialty home delivery programs, retail and 
mail auto-refill programs, and cost-sharing 
assistance incentives funded by an entity 
providing pharmacy benefit services— 
‘‘(I) an explanation of any ben-
efit design parameters that encourage 
VerDate Sep 11 2014 
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or require participants and bene-
ficiaries in the plan or coverage to fill 
prescriptions at mail order, specialty, 
or retail pharmacies; 
‘‘(II) the percentage of total pre-
scriptions dispensed by such phar-
macies to participants or beneficiaries 
in such plan or coverage; and 
‘‘(III) a list of all drugs dis-
pensed by such pharmacies to partici-
pants or beneficiaries enrolled in such 
plan or coverage, and, with respect to 
each drug dispensed— 
‘‘(aa) the amount charged, 
per dosage unit, per 30-day sup-
ply, or per 90-day supply (as ap-
plicable) to the plan or issuer, 
and to participants and bene-
ficiaries; 
‘‘(bb) the median amount 
charged to such plan or issuer, 
and the interquartile range of the 
costs, per dosage unit, per 30- 
day supply, and per 90-day sup-
ply, including amounts paid by 
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the 
participants 
and 
bene-
ficiaries, when the same drug is 
dispensed by other pharmacies 
that are not affiliated with or 
under common ownership with 
the entity and that are included 
in the pharmacy network of such 
plan or coverage; 
‘‘(cc) the lowest cost per 
dosage unit, per 30-day supply 
and per 90-day supply, for each 
such drug, including amounts 
charged to the plan or coverage 
and to participants and bene-
ficiaries, that is available from 
any pharmacy included in the 
network of such plan or coverage; 
and 
‘‘(dd) the net acquisition 
cost per dosage unit, per 30-day 
supply, and per 90-day supply, if 
such drug is subject to a max-
imum price discount; and 
‘‘(B) with respect to any group health 
plan, including group health insurance coverage 
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offered in connection with such a plan, regard-
less of whether the plan or coverage is offered 
by a specified large employer or whether it is a 
specified large plan— 
‘‘(i) a summary document for the 
group health plan that includes such infor-
mation described in clauses (i) through (iv) 
of subparagraph (A), as specified by the 
Secretary through guidance, program in-
struction, or otherwise (with no require-
ment of notice and comment rulemaking), 
that the Secretary determines useful to 
group health plans for purposes of select-
ing pharmacy benefit management serv-
ices, such as an estimated net price to 
group health plan and participant or bene-
ficiary, a cost per claim, the fee structure 
or reimbursement model, and estimated 
cost per participant or beneficiary; 
‘‘(ii) a summary document for plans 
and issuers to provide to participants and 
beneficiaries, which shall be made available 
to participants or beneficiaries upon re-
quest to their group health plan (including 
in the case of group health insurance cov-
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erage offered in connection with such a 
plan), that— 
‘‘(I) contains such information 
described in clauses (iii), (iv), (v), and 
(vi), as applicable, as specified by the 
Secretary through guidance, program 
instruction, or otherwise (with no re-
quirement of notice and comment 
rulemaking) that the Secretary deter-
mines useful to participants or bene-
ficiaries in better understanding the 
plan or coverage or benefits under 
such plan or coverage; 
‘‘(II) contains only aggregate in-
formation; and 
‘‘(III) states that participants 
and beneficiaries may request specific, 
claims-level information required to be 
furnished under subsection (c) from 
the group health plan or health insur-
ance issuer; 
‘‘(iii) with respect to drugs covered by 
such plan or coverage during such report-
ing period— 
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‘‘(I) the total net spending by the 
plan or coverage for all such drugs; 
‘‘(II) the total amount received, 
or expected to be received, by the plan 
or issuer from any applicable entity in 
rebates, fees, alternative discounts, or 
other remuneration; and 
‘‘(III) to the extent feasible, in-
formation on the total amount of re-
muneration for such drugs, including 
copayment assistance dollars paid, co-
payment cards applied, or other dis-
counts provided by each drug manu-
facturer (or entity administering co-
payment assistance on behalf of such 
drug manufacturer) to participants 
and beneficiaries; 
‘‘(iv) amounts paid directly or indi-
rectly in rebates, fees, or any other type of 
compensation 
(as 
defined 
in 
section 
408(b)(2)(B)(ii)(dd)(AA) of the Employee 
Retirement Income Security Act) to bro-
kerage firms, brokers, consultants, advi-
sors, or any other individual or firm, for— 
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‘‘(I) the referral of the group 
health plan’s or health insurance 
issuer’s business to an entity pro-
viding pharmacy benefit management 
services, including the identity of the 
recipient of such amounts; 
‘‘(II) consideration of the entity 
providing pharmacy benefit manage-
ment services by the group health 
plan or health insurance issuer; or 
‘‘(III) the retention of the entity 
by the group health plan or health in-
surance issuer; 
‘‘(v) an explanation of any benefit de-
sign parameters that encourage or require 
participants and beneficiaries in such plan 
or coverage to fill prescriptions at mail 
order, specialty, or retail pharmacies that 
are affiliated with or under common own-
ership with the entity providing pharmacy 
benefit management services under such 
plan or coverage, including mandatory mail 
and specialty home delivery programs, re-
tail and mail auto-refill programs, and 
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cost-sharing assistance incentives directly 
or indirectly funded by such entity; and 
‘‘(vi) total gross spending on all drugs 
under the plan or coverage during the re-
porting period. 
‘‘(3) OPT-IN FOR GROUP HEALTH INSURANCE 
COVERAGE OFFERED BY A SPECIFIED LARGE EM-
PLOYER OR THAT IS A SPECIFIED LARGE PLAN.—In 
the case of group health insurance coverage offered 
in connection with a group health plan that is of-
fered by a specified large employer or is a specified 
large plan, such group health plan may, on an an-
nual basis, for plan years beginning on or after the 
date that is 30 months after the date of enactment 
of this section, elect to require an entity providing 
pharmacy benefit management services on behalf of 
the health insurance issuer to submit to such group 
health plan a report that includes all of the informa-
tion described in paragraph (2)(A), in addition to 
the information described in paragraph (2)(B). 
‘‘(4) PRIVACY REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—An entity providing 
pharmacy benefit management services on be-
half of a group health plan or a health insur-
ance issuer offering group health insurance cov-
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erage shall report information under paragraph 
(1) in a manner consistent with the privacy reg-
ulations promulgated under section 13402(a) of 
the Health Information Technology for Eco-
nomic and Clinical Health Act and consistent 
with the privacy regulations promulgated under 
the Health Insurance Portability and Account-
ability Act of 1996 in part 160 and subparts A 
and E of part 164 of title 45, Code of Federal 
Regulations (or successor regulations) (referred 
to in this paragraph as the ‘HIPAA privacy 
regulations’) and shall restrict the use and dis-
closure of such information according to such 
privacy regulations and such HIPAA privacy 
regulations. 
‘‘(B) ADDITIONAL REQUIREMENTS.— 
‘‘(i) IN
GENERAL.—An entity pro-
viding pharmacy benefit management serv-
ices on behalf of a group health plan or 
health insurance issuer offering group 
health insurance coverage that submits a 
report under paragraph (1) shall ensure 
that such report contains only summary 
health information, as defined in section 
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164.504(a) of title 45, Code of Federal 
Regulations (or successor regulations). 
‘‘(ii) RESTRICTIONS.—In carrying out 
this subsection, a group health plan shall 
comply with section 164.504(f) of title 45, 
Code of Federal Regulations (or a suc-
cessor regulation), and a plan sponsor shall 
act in accordance with the terms of the 
agreement described in such section. 
‘‘(C) RULE OF CONSTRUCTION.— 
‘‘(i) Nothing in this section shall be 
construed to modify the requirements for 
the creation, receipt, maintenance, or 
transmission of protected health informa-
tion under the HIPAA privacy regulations. 
‘‘(ii) Nothing in this section shall be 
construed to affect the application of any 
Federal or State privacy or civil rights law, 
including the HIPAA privacy regulations, 
the Genetic Information Nondiscrimination 
Act of 2008 (Public Law 110–233) (in-
cluding the amendments made by such 
Act), the Americans with Disabilities Act 
of 1990 (42 U.S.C. 12101 et seq.), section 
504 of the Rehabilitation Act of 1973 (29 
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U.S.C. 794), section 1557 of the Patient 
Protection and Affordable Care Act (42 
U.S.C. 18116), title VI of the Civil Rights 
Act of 1964 (42 U.S.C. 2000d), and title 
VII of the Civil Rights Act of 1964 (42 
U.S.C. 2000e). 
‘‘(D) WRITTEN NOTICE.—Each plan year, 
group health plans, including with respect to 
group health insurance coverage offered in con-
nection with a group health plan, shall provide 
to each participant or beneficiary written notice 
informing the participant or beneficiary of the 
requirement for entities providing pharmacy 
benefit management services on behalf of the 
group health plan or health insurance issuer of-
fering group health insurance coverage to sub-
mit reports to group health plans under para-
graph (1), as applicable, which may include in-
corporating such notification in plan documents 
provided to the participant or beneficiary, or 
providing individual notification. 
‘‘(E) LIMITATION
TO
BUSINESS
ASSOCI-
ATES.—A group health plan receiving a report 
under paragraph (1) may disclose such informa-
tion only to the entity from which the report 
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was received or to that entity’s business associ-
ates as defined in section 160.103 of title 45, 
Code of Federal Regulations (or successor regu-
lations) or as permitted by the HIPAA privacy 
regulations. 
‘‘(F) CLARIFICATION REGARDING PUBLIC 
DISCLOSURE
OF
INFORMATION.—Nothing in 
this section shall prevent an entity providing 
pharmacy benefit management services on be-
half of a group health plan or health insurance 
issuer offering group health insurance coverage, 
from placing reasonable restrictions on the pub-
lic disclosure of the information contained in a 
report described in paragraph (1), except that 
such plan, issuer, or entity may not— 
‘‘(i) restrict disclosure of such report 
to the Department of Health and Human 
Services, the Department of Labor, or the 
Department of the Treasury; or 
‘‘(ii) prevent disclosure for the pur-
poses of subsection (c), or any other public 
disclosure requirement under this section. 
‘‘(G) LIMITED
FORM
OF
REPORT.—The 
Secretary shall define through rulemaking a 
limited form of the report under paragraph (1) 
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required with respect to any group health plan 
established by a plan sponsor that is, or is af-
filiated with, a drug manufacturer, drug whole-
saler, or other direct participant in the drug 
supply chain, in order to prevent anti-competi-
tive behavior. 
‘‘(5) STANDARD FORMAT AND REGULATIONS.— 
‘‘(A) IN
GENERAL.—Not later than 18 
months after the date of enactment of this sec-
tion, the Secretary shall specify through rule-
making a standard format for entities providing 
pharmacy benefit management services on be-
half of group health plans and health insurance 
issuers offering group health insurance cov-
erage, to submit reports required under para-
graph (1). 
‘‘(B) 
ADDITIONAL
REGULATIONS.—Not 
later than 18 months after the date of enact-
ment of this section, the Secretary shall, 
through rulemaking, promulgate any other final 
regulations necessary to implement the require-
ments of this section. In promulgating such 
regulations, the Secretary shall, to the extent 
practicable, align the reporting requirements 
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under this section with the reporting require-
ments under section 2799A–10. 
‘‘(c) REQUIREMENT TO PROVIDE INFORMATION TO 
PARTICIPANTS OR BENEFICIARIES.—A group health plan, 
including with respect to group health insurance coverage 
offered in connection with a group health plan, upon re-
quest of a participant or beneficiary, shall provide to such 
participant or beneficiary— 
‘‘(1) the summary document described in sub-
section (b)(2)(B)(ii); and 
‘‘(2) the information described in subsection 
(b)(2)(A)(i)(III) with respect to a claim made by or 
on behalf of such participant or beneficiary. 
‘‘(d) ENFORCEMENT.— 
‘‘(1) IN GENERAL.—The Secretary shall enforce 
this section. The enforcement authority under this 
subsection shall apply only with respect to group 
health plans (including group health insurance cov-
erage offered in connection with such a plan) to 
which the requirements of subparts I and II of part 
A and part D apply in accordance with section 2722, 
and with respect to entities providing pharmacy ben-
efit management services on behalf of such plans 
and applicable entities providing services on behalf 
of such plans. 
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‘‘(2) FAILURE TO PROVIDE INFORMATION.—A 
group health plan, a health insurance issuer offering 
group health insurance coverage, an entity providing 
pharmacy benefit management services on behalf of 
such a plan or issuer, or an applicable entity pro-
viding services on behalf of such a plan or issuer 
that violates subsection (a); an entity providing 
pharmacy benefit management services on behalf of 
such a plan or issuer that fails to provide the infor-
mation required under subsection (b); or a group 
health plan that fails to provide the information re-
quired under subsection (c), shall be subject to a 
civil monetary penalty in the amount of $10,000 for 
each day during which such violation continues or 
such information is not disclosed or reported. 
‘‘(3) FALSE INFORMATION.—A health insurance 
issuer, an entity providing pharmacy benefit man-
agement services, or a third party administrator pro-
viding services on behalf of such issuer offered by a 
health insurance issuer that knowingly provides false 
information under this section shall be subject to a 
civil monetary penalty in an amount not to exceed 
$100,000 for each item of false information. Such 
civil monetary penalty shall be in addition to other 
penalties as may be prescribed by law. 
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‘‘(4) PROCEDURE.—The provisions of section 
1128A of the Social Security Act, other than sub-
sections (a) and (b) and the first sentence of sub-
section (c)(1) of such section shall apply to civil 
monetary penalties under this subsection in the 
same manner as such provisions apply to a penalty 
or proceeding under such section. 
‘‘(5) WAIVERS.—The Secretary may waive pen-
alties under paragraph (2), or extend the period of 
time for compliance with a requirement of this sec-
tion, for an entity in violation of this section that 
has made a good-faith effort to comply with the re-
quirements in this section. 
‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to permit a health insurance issuer, 
group health plan, entity providing pharmacy benefit man-
agement services on behalf of a group health plan or 
health insurance issuer, or other entity to restrict disclo-
sure to, or otherwise limit the access of, the Secretary to 
a report described in subsection (b)(1) or information re-
lated to compliance with subsections (a), (b), (c), or (d) 
by such issuer, plan, or entity. 
‘‘(f) DEFINITIONS.—In this section: 
‘‘(1) APPLICABLE ENTITY.—The term ‘applica-
ble entity’ means— 
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‘‘(A) an applicable group purchasing orga-
nization, drug manufacturer, distributor, whole-
saler, rebate aggregator (or other purchasing 
entity designed to aggregate rebates), or associ-
ated third party; 
‘‘(B) any subsidiary, parent, affiliate, or 
subcontractor of a group health plan, health in-
surance issuer, entity that provides pharmacy 
benefit management services on behalf of such 
a plan or issuer, or any entity described in sub-
paragraph (A); or 
‘‘(C) such other entity as the Secretary 
may specify through rulemaking. 
‘‘(2) APPLICABLE GROUP PURCHASING ORGANI-
ZATION.—The term ‘applicable group purchasing or-
ganization’ means a group purchasing organization 
that is affiliated with or under common ownership 
with an entity providing pharmacy benefit manage-
ment services. 
‘‘(3) CONTRACTED COMPENSATION.—The term 
‘contracted compensation’ means the sum of any in-
gredient cost and dispensing fee for a drug (inclusive 
of the out-of-pocket costs to the participant or bene-
ficiary), or another analogous compensation struc-
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ture that the Secretary may specify through regula-
tions. 
‘‘(4) GROSS
SPENDING.—The term ‘gross 
spending’, with respect to prescription drug benefits 
under a group health plan or health insurance cov-
erage, means the amount spent by a group health 
plan or health insurance issuer on prescription drug 
benefits, calculated before the application of rebates, 
fees, alternative discounts, or other remuneration. 
‘‘(5) NET SPENDING.—The term ‘net spending’, 
with respect to prescription drug benefits under a 
group health plan or health insurance coverage, 
means the amount spent by a group health plan or 
health insurance issuer on prescription drug bene-
fits, calculated after the application of rebates, fees, 
alternative discounts, or other remuneration. 
‘‘(6) PLAN SPONSOR.—The term ‘plan sponsor’ 
has the meaning given such term in section 3(16)(B) 
of the Employee Retirement Income Security Act of 
1974. 
‘‘(7) REMUNERATION.—The term ‘remunera-
tion’ has the meaning given such term by the Sec-
retary through rulemaking, which shall be reevalu-
ated by the Secretary every 5 years. 
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‘‘(8) SPECIFIED LARGE EMPLOYER.—The term 
‘specified large employer’ means, in connection with 
a group health plan (including group health insur-
ance coverage offered in connection with such a 
plan) established or maintained by a single em-
ployer, with respect to a calendar year or a plan 
year, as applicable, an employer who employed an 
average of at least 100 employees on business days 
during the preceding calendar year or plan year and 
who employs at least 1 employee on the first day of 
the calendar year or plan year. 
‘‘(9) SPECIFIED LARGE PLAN.—The term ‘spec-
ified large plan’ means a group health plan (includ-
ing group health insurance coverage offered in con-
nection with such a plan) established or maintained 
by a plan sponsor described in clause (ii) or (iii) of 
section 3(16)(B) of the Employee Retirement In-
come Security Act of 1974 that had an average of 
at least 100 participants on business days during 
the preceding calendar year or plan year, as applica-
ble. 
‘‘(10) WHOLESALE
ACQUISITION
COST.—The 
term ‘wholesale acquisition cost’ has the meaning 
given such term in section 1847A(c)(6)(B) of the 
Social Security Act.’’; and 
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(2) in section 2723 (42 U.S.C. 300gg–22)— 
(A) in subsection (a)— 
(i) in paragraph (1), by inserting 
‘‘(other than section 2799A–11)’’ after 
‘‘part D’’; and 
(ii) in paragraph (2), by inserting 
‘‘(other than section 2799A–11)’’ after 
‘‘part D’’; and 
(B) in subsection (b)— 
(i) in paragraph (1), by inserting 
‘‘(other than section 2799A–11)’’ after 
‘‘part D’’; 
(ii) in paragraph (2)(A), by inserting 
‘‘(other than section 2799A–11)’’ after 
‘‘part D’’; and 
(iii) in paragraph (2)(C)(ii), by insert-
ing ‘‘(other than section 2799A–11)’’ after 
‘‘part D’’. 
(b) EMPLOYEE RETIREMENT INCOME SECURITY ACT 
OF 1974.— 
(1) IN GENERAL.—Subtitle B of title I of the 
Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1021 et seq.) is amended— 
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(A) in subpart B of part 7 (29 U.S.C. 
1185 et seq.), by adding at the end the fol-
lowing: 
‘‘SEC. 726. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR-
MACY BENEFIT MANAGEMENT SERVICES. 
‘‘(a) IN GENERAL.—For plan years beginning on or 
after the date that is 30 months after the date of enact-
ment of this section (referred to in this subsection and 
subsection (b) as the ‘effective date’), a group health plan 
or a health insurance issuer offering group health insur-
ance coverage, or an entity providing pharmacy benefit 
management services on behalf of such a plan or issuer, 
shall not enter into a contract, including an extension or 
renewal of a contract, entered into on or after the effective 
date, with an applicable entity unless such applicable enti-
ty agrees to— 
‘‘(1) not limit or delay the disclosure of infor-
mation to the group health plan (including such a 
plan offered through a health insurance issuer) in 
such a manner that prevents an entity providing 
pharmacy benefit management services on behalf of 
a group health plan or health insurance issuer offer-
ing group health insurance coverage from making 
the reports described in subsection (b); and 
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‘‘(2) provide the entity providing pharmacy ben-
efit management services on behalf of a group health 
plan or health insurance issuer relevant information 
necessary to make the reports described in sub-
section (b). 
‘‘(b) REPORTS.— 
‘‘(1) IN GENERAL.—For plan years beginning 
on or after the effective date, in the case of any con-
tract between a group health plan or a health insur-
ance issuer offering group health insurance coverage 
offered in connection with such a plan and an entity 
providing pharmacy benefit management services on 
behalf of such plan or issuer, including an extension 
or renewal of such a contract, entered into on or 
after the effective date, the entity providing phar-
macy benefit management services on behalf of such 
a group health plan or health insurance issuer, not 
less frequently than every 6 months (or, at the re-
quest of a group health plan, not less frequently 
than quarterly, and under the same conditions, 
terms, and cost of the semiannual report under this 
subsection), shall submit to the group health plan a 
report in accordance with this section. Each such re-
port shall be made available to such group health 
plan in plain language, in a machine-readable for-
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pharmacy benefit management serv-
ices or other applicable entity on be-
half of the group health plan or health 
insurance issuer; 
‘‘(II) the contracted compensa-
tion paid to the pharmacy, by any en-
tity providing pharmacy benefit man-
agement services or other applicable 
entity on behalf of the group health 
plan or health insurance issuer, for 
each covered drug (identified by the 
National Drug Code); 
‘‘(III) for each such claim, the 
difference between the amount paid 
under subclause (I) and the amount 
paid under subclause (II); 
‘‘(IV) the proprietary name, es-
tablished name or proper name, and 
National Drug Code; 
‘‘(V) for each claim for the drug 
(including original prescriptions and 
refills) and for each dosage unit of the 
drug for which a claim was filed, the 
type of dispensing channel used to 
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furnish the drug, including retail, mail 
order, or specialty pharmacy; 
‘‘(VI) with respect to each drug 
dispensed, for each type of dispensing 
channel (including retail, mail order, 
or specialty pharmacy)— 
‘‘(aa) whether such drug is a 
brand name drug or a generic 
drug, and— 
‘‘(AA) in the case of a 
brand name drug, the whole-
sale acquisition cost, listed 
as cost per days supply and 
cost per dosage unit, on the 
date such drug was dis-
pensed; and 
‘‘(BB) in the case of a 
generic drug, the average 
wholesale price, listed as 
cost per days supply and 
cost per dosage unit, on the 
date such drug was dis-
pensed; and 
‘‘(bb) the total number of— 
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‘‘(AA) 
prescription 
claims 
(including 
original 
prescriptions and refills); 
‘‘(BB) participants and 
beneficiaries for whom a 
claim for such drug was 
filed through the applicable 
dispensing channel; 
‘‘(CC) dosage units and 
dosage units per fill of such 
drug; and 
‘‘(DD) days supply of 
such drug per fill; 
‘‘(VII) the net price per course of 
treatment or single fill, such as a 30- 
day supply or 90-day supply to the 
plan or coverage after rebates, fees, 
alternative discounts, or other remu-
neration received from applicable enti-
ties; 
‘‘(VIII) the total amount of out- 
of-pocket spending by participants 
and beneficiaries on such drug, in-
cluding spending through copayments, 
coinsurance, and deductibles, but not 
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including any amounts spent by par-
ticipants and beneficiaries on drugs 
not covered under the plan or cov-
erage, or for which no claim is sub-
mitted under the plan or coverage; 
‘‘(IX) the total net spending on 
the drug; 
‘‘(X) the total amount received, 
or expected to be received, by the plan 
or issuer from any applicable entity in 
rebates, fees, alternative discounts, or 
other remuneration; 
‘‘(XI) the total amount received, 
or expected to be received, by the enti-
ty providing pharmacy benefit man-
agement services, from applicable en-
tities, in rebates, fees, alternative dis-
counts, or other remuneration from 
such entities— 
‘‘(aa) for claims incurred 
during the reporting period; and 
‘‘(bb) that is related to utili-
zation of such drug or spending 
on such drug; and 
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‘‘(XII) to the extent feasible, in-
formation on the total amount of re-
muneration for such drug, including 
copayment assistance dollars paid, co-
payment cards applied, or other dis-
counts provided by each drug manu-
facturer (or entity administering co-
payment assistance on behalf of such 
drug manufacturer), to the partici-
pants and beneficiaries enrolled in 
such plan or coverage; 
‘‘(ii) a list of each therapeutic class 
(as defined by the Secretary) for which a 
claim was filed under the group health 
plan or health insurance coverage during 
the reporting period, and, with respect to 
each such therapeutic class— 
‘‘(I) the total gross spending on 
drugs in such class before rebates, 
price 
concessions, 
alternative 
dis-
counts, or other remuneration from 
applicable entities; 
‘‘(II) the net spending in such 
class after such rebates, price conces-
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sions, alternative discounts, or other 
remuneration from applicable entities; 
‘‘(III) the total amount received, 
or expected to be received, by the enti-
ty providing pharmacy benefit man-
agement services, from applicable en-
tities, in rebates, fees, alternative dis-
counts, or other remuneration from 
such entities— 
‘‘(aa) for claims incurred 
during the reporting period; and 
‘‘(bb) that is related to utili-
zation of drugs or drug spending; 
‘‘(IV) the average net spending 
per 30-day supply and per 90-day 
supply by the plan or by the issuer 
with respect to such coverage and its 
participants and beneficiaries, among 
all drugs within the therapeutic class 
for which a claim was filed during the 
reporting period; 
‘‘(V) the number of participants 
and beneficiaries who filled a prescrip-
tion for a drug in such class, includ-
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ing the National Drug Code for each 
such drug; 
‘‘(VI) if applicable, a description 
of the formulary tiers and utilization 
mechanisms (such as prior authoriza-
tion or step therapy) employed for 
drugs in that class; and 
‘‘(VII) the total out-of-pocket 
spending under the plan or coverage 
by participants and beneficiaries, in-
cluding spending through copayments, 
coinsurance, and deductibles, but not 
including any amounts spent by par-
ticipants and beneficiaries on drugs 
not covered under the plan or cov-
erage or for which no claim is sub-
mitted under the plan or coverage; 
‘‘(iii) with respect to any drug for 
which gross spending under the group 
health plan or health insurance coverage 
exceeded $10,000 during the reporting pe-
riod or, in the case that gross spending 
under the group health plan or coverage 
exceeded $10,000 during the reporting pe-
riod with respect to fewer than 50 drugs, 
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with respect to the 50 prescription drugs 
with the highest spending during the re-
porting period— 
‘‘(I) a list of all other drugs in 
the same therapeutic class as such 
drug; 
‘‘(II) if applicable, the rationale 
for the formulary placement of such 
drug in that therapeutic category or 
class, selected from a list of standard 
rationales established by the Sec-
retary, in consultation with stake-
holders; and 
‘‘(III) any change in formulary 
placement compared to the prior plan 
year; and 
‘‘(iv) in the case that such plan or 
issuer (or an entity providing pharmacy 
benefit management services on behalf of 
such plan or issuer) has an affiliated phar-
macy or pharmacy under common owner-
ship, including mandatory mail and spe-
cialty home delivery programs, retail and 
mail auto-refill programs, and cost sharing 
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assistance incentives funded by an entity 
providing pharmacy benefit services— 
‘‘(I) an explanation of any ben-
efit design parameters that encourage 
or require participants and bene-
ficiaries in the plan or coverage to fill 
prescriptions at mail order, specialty, 
or retail pharmacies; 
‘‘(II) the percentage of total pre-
scriptions dispensed by such phar-
macies to participants or beneficiaries 
in such plan or coverage; and 
‘‘(III) a list of all drugs dis-
pensed by such pharmacies to partici-
pants or beneficiaries enrolled in such 
plan or coverage, and, with respect to 
each drug dispensed— 
‘‘(aa) the amount charged, 
per dosage unit, per 30-day sup-
ply, or per 90-day supply (as ap-
plicable) to the plan or issuer, 
and to participants and bene-
ficiaries; 
‘‘(bb) the median amount 
charged to such plan or issuer, 
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and the interquartile range of the 
costs, per dosage unit, per 30- 
day supply, and per 90-day sup-
ply, including amounts paid by 
the 
participants 
and 
bene-
ficiaries, when the same drug is 
dispensed by other pharmacies 
that are not affiliated with or 
under common ownership with 
the entity and that are included 
in the pharmacy network of such 
plan or coverage; 
‘‘(cc) the lowest cost per 
dosage unit, per 30-day supply 
and per 90-day supply, for each 
such drug, including amounts 
charged to the plan or coverage 
and to participants and bene-
ficiaries, that is available from 
any pharmacy included in the 
network of such plan or coverage; 
and 
‘‘(dd) the net acquisition 
cost per dosage unit, per 30-day 
supply, and per 90-day supply, if 
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such drug is subject to a max-
imum price discount; and 
‘‘(B) with respect to any group health 
plan, including group health insurance coverage 
offered in connection with such a plan, regard-
less of whether the plan or coverage is offered 
by a specified large employer or whether it is a 
specified large plan— 
‘‘(i) a summary document for the 
group health plan that includes such infor-
mation described in clauses (i) through (iv) 
of subparagraph (A), as specified by the 
Secretary through guidance, program in-
struction, or otherwise (with no require-
ment of notice and comment rulemaking), 
that the Secretary determines useful to 
group health plans for purposes of select-
ing pharmacy benefit management serv-
ices, such as an estimated net price to 
group health plan and participant or bene-
ficiary, a cost per claim, the fee structure 
or reimbursement model, and estimated 
cost per participant or beneficiary; 
‘‘(ii) a summary document for plans 
and issuers to provide to participants and 
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beneficiaries, which shall be made available 
to participants or beneficiaries upon re-
quest to their group health plan (including 
in the case of group health insurance cov-
erage offered in connection with such a 
plan), that— 
‘‘(I) contains such information 
described in clauses (iii), (iv), (v), and 
(vi), as applicable, as specified by the 
Secretary through guidance, program 
instruction, or otherwise (with no re-
quirement of notice and comment 
rulemaking) that the Secretary deter-
mines useful to participants or bene-
ficiaries in better understanding the 
plan or coverage or benefits under 
such plan or coverage; 
‘‘(II) contains only aggregate in-
formation; and 
‘‘(III) states that participants 
and beneficiaries may request specific, 
claims-level information required to be 
furnished under subsection (c) from 
the group health plan or health insur-
ance issuer; 
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‘‘(iii) with respect to drugs covered by 
such plan or coverage during such report-
ing period— 
‘‘(I) the total net spending by the 
plan or coverage for all such drugs; 
‘‘(II) the total amount received, 
or expected to be received, by the plan 
or issuer from any applicable entity in 
rebates, fees, alternative discounts, or 
other remuneration; and 
‘‘(III) to the extent feasible, in-
formation on the total amount of re-
muneration for such drugs, including 
copayment assistance dollars paid, co-
payment cards applied, or other dis-
counts provided by each drug manu-
facturer (or entity administering co-
payment assistance on behalf of such 
drug manufacturer) to participants 
and beneficiaries; 
‘‘(iv) amounts paid directly or indi-
rectly in rebates, fees, or any other type of 
compensation 
(as 
defined 
in 
section 
408(b)(2)(B)(ii)(dd)(AA)) 
to 
brokerage 
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firms, brokers, consultants, advisors, or 
any other individual or firm, for— 
‘‘(I) the referral of the group 
health plan’s or health insurance 
issuer’s business to an entity pro-
viding pharmacy benefit management 
services, including the identity of the 
recipient of such amounts; 
‘‘(II) consideration of the entity 
providing pharmacy benefit manage-
ment services by the group health 
plan or health insurance issuer; or 
‘‘(III) the retention of the entity 
by the group health plan or health in-
surance issuer; 
‘‘(v) an explanation of any benefit de-
sign parameters that encourage or require 
participants and beneficiaries in such plan 
or coverage to fill prescriptions at mail 
order, specialty, or retail pharmacies that 
are affiliated with or under common own-
ership with the entity providing pharmacy 
benefit management services under such 
plan or coverage, including mandatory mail 
and specialty home delivery programs, re-
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tail and mail auto-refill programs, and 
cost-sharing assistance incentives directly 
or indirectly funded by such entity; and 
‘‘(vi) total gross spending on all drugs 
under the plan or coverage during the re-
porting period. 
‘‘(3) OPT-IN FOR GROUP HEALTH INSURANCE 
COVERAGE OFFERED BY A SPECIFIED LARGE EM-
PLOYER OR THAT IS A SPECIFIED LARGE PLAN.—In 
the case of group health insurance coverage offered 
in connection with a group health plan that is of-
fered by a specified large employer or is a specified 
large plan, such group health plan may, on an an-
nual basis, for plan years beginning on or after the 
date that is 30 months after the date of enactment 
of this section, elect to require an entity providing 
pharmacy benefit management services on behalf of 
the health insurance issuer to submit to such group 
health plan a report that includes all of the informa-
tion described in paragraph (2)(A), in addition to 
the information described in paragraph (2)(B). 
‘‘(4) PRIVACY REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—An entity providing 
pharmacy benefit management services on be-
half of a group health plan or a health insur-
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ance issuer offering group health insurance cov-
erage shall report information under paragraph 
(1) in a manner consistent with the privacy reg-
ulations promulgated under section 13402(a) of 
the Health Information Technology for Eco-
nomic and Clinical Health Act (42 U.S.C. 
17932(a)) and consistent with the privacy regu-
lations promulgated under the Health Insur-
ance Portability and Accountability Act of 1996 
in part 160 and subparts A and E of part 164 
of title 45, Code of Federal Regulations (or suc-
cessor regulations) (referred to in this para-
graph as the ‘HIPAA privacy regulations’) and 
shall restrict the use and disclosure of such in-
formation according to such privacy regulations 
and such HIPAA privacy regulations. 
‘‘(B) ADDITIONAL REQUIREMENTS.— 
‘‘(i) IN
GENERAL.—An entity pro-
viding pharmacy benefit management serv-
ices on behalf of a group health plan or 
health insurance issuer offering group 
health insurance coverage that submits a 
report under paragraph (1) shall ensure 
that such report contains only summary 
health information, as defined in section 
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164.504(a) of title 45, Code of Federal 
Regulations (or successor regulations). 
‘‘(ii) RESTRICTIONS.—In carrying out 
this subsection, a group health plan shall 
comply with section 164.504(f) of title 45, 
Code of Federal Regulations (or a suc-
cessor regulation), and a plan sponsor shall 
act in accordance with the terms of the 
agreement described in such section. 
‘‘(C) RULE OF CONSTRUCTION.— 
‘‘(i) Nothing in this section shall be 
construed to modify the requirements for 
the creation, receipt, maintenance, or 
transmission of protected health informa-
tion under the HIPAA privacy regulations. 
‘‘(ii) Nothing in this section shall be 
construed to affect the application of any 
Federal or State privacy or civil rights law, 
including the HIPAA privacy regulations, 
the Genetic Information Nondiscrimination 
Act of 2008 (Public Law 110–233) (in-
cluding the amendments made by such 
Act), the Americans with Disabilities Act 
of 1990 (42 U.S.C. 12101 et seq.), section 
504 of the Rehabilitation Act of 1973 (29 
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U.S.C. 794), section 1557 of the Patient 
Protection and Affordable Care Act (42 
U.S.C. 18116), title VI of the Civil Rights 
Act of 1964 (42 U.S.C. 2000d), and title 
VII of the Civil Rights Act of 1964 (42 
U.S.C. 2000e). 
‘‘(D) WRITTEN NOTICE.—Each plan year, 
group health plans, including with respect to 
group health insurance coverage offered in con-
nection with a group health plan, shall provide 
to each participant or beneficiary written notice 
informing the participant or beneficiary of the 
requirement for entities providing pharmacy 
benefit management services on behalf of the 
group health plan or health insurance issuer of-
fering group health insurance coverage to sub-
mit reports to group health plans under para-
graph (1), as applicable, which may include in-
corporating such notification in plan documents 
provided to the participant or beneficiary, or 
providing individual notification. 
‘‘(E) LIMITATION
TO
BUSINESS
ASSOCI-
ATES.—A group health plan receiving a report 
under paragraph (1) may disclose such informa-
tion only to the entity from which the report 
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was received or to that entity’s business associ-
ates as defined in section 160.103 of title 45, 
Code of Federal Regulations (or successor regu-
lations) or as permitted by the HIPAA privacy 
regulations. 
‘‘(F) CLARIFICATION REGARDING PUBLIC 
DISCLOSURE
OF
INFORMATION.—Nothing in 
this section shall prevent an entity providing 
pharmacy benefit management services on be-
half of a group health plan or health insurance 
issuer offering group health insurance coverage, 
from placing reasonable restrictions on the pub-
lic disclosure of the information contained in a 
report described in paragraph (1), except that 
such plan, issuer, or entity may not— 
‘‘(i) restrict disclosure of such report 
to the Department of Health and Human 
Services, the Department of Labor, or the 
Department of the Treasury; or 
‘‘(ii) prevent disclosure for the pur-
poses of subsection (c), or any other public 
disclosure requirement under this section. 
‘‘(G) LIMITED
FORM
OF
REPORT.—The 
Secretary shall define through rulemaking a 
limited form of the report under paragraph (1) 
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required with respect to any group health plan 
established by a plan sponsor that is, or is af-
filiated with, a drug manufacturer, drug whole-
saler, or other direct participant in the drug 
supply chain, in order to prevent anti-competi-
tive behavior. 
‘‘(5) STANDARD FORMAT AND REGULATIONS.— 
‘‘(A) IN
GENERAL.—Not later than 18 
months after the date of enactment of this sec-
tion, the Secretary shall specify through rule-
making a standard format for entities providing 
pharmacy benefit management services on be-
half of group health plans and health insurance 
issuers offering group health insurance cov-
erage, to submit reports required under para-
graph (1). 
‘‘(B) 
ADDITIONAL
REGULATIONS.—Not 
later than 18 months after the date of enact-
ment of this section, the Secretary shall, 
through rulemaking, promulgate any other final 
regulations necessary to implement the require-
ments of this section. In promulgating such 
regulations, the Secretary shall, to the extent 
practicable, align the reporting requirements 
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under this section with the reporting require-
ments under section 725. 
‘‘(c) REQUIREMENT TO PROVIDE INFORMATION TO 
PARTICIPANTS OR BENEFICIARIES.—A group health plan, 
including with respect to group health insurance coverage 
offered in connection with a group health plan, upon re-
quest of a participant or beneficiary, shall provide to such 
participant or beneficiary— 
‘‘(1) the summary document described in sub-
section (b)(2)(B)(ii); and 
‘‘(2) the information described in subsection 
(b)(2)(A)(i)(III) with respect to a claim made by or 
on behalf of such participant or beneficiary. 
‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to permit a health insurance issuer, 
group health plan, entity providing pharmacy benefit man-
agement services on behalf of a group health plan or 
health insurance issuer, or other entity to restrict disclo-
sure to, or otherwise limit the access of, the Secretary to 
a report described in subsection (b)(1) or information re-
lated to compliance with subsections (a), (b), or (c) of this 
section or section 502(c)(13) by such issuer, plan, or enti-
ty. 
‘‘(e) DEFINITIONS.—In this section: 
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‘‘(1) APPLICABLE ENTITY.—The term ‘applica-
ble entity’ means— 
‘‘(A) an applicable group purchasing orga-
nization, drug manufacturer, distributor, whole-
saler, rebate aggregator (or other purchasing 
entity designed to aggregate rebates), or associ-
ated third party; 
‘‘(B) any subsidiary, parent, affiliate, or 
subcontractor of a group health plan, health in-
surance issuer, entity that provides pharmacy 
benefit management services on behalf of such 
a plan or issuer, or any entity described in sub-
paragraph (A); or 
‘‘(C) such other entity as the Secretary 
may specify through rulemaking. 
‘‘(2) APPLICABLE GROUP PURCHASING ORGANI-
ZATION.—The term ‘applicable group purchasing or-
ganization’ means a group purchasing organization 
that is affiliated with or under common ownership 
with an entity providing pharmacy benefit manage-
ment services. 
‘‘(3) CONTRACTED COMPENSATION.—The term 
‘contracted compensation’ means the sum of any in-
gredient cost and dispensing fee for a drug (inclusive 
of the out-of-pocket costs to the participant or bene-
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ficiary), or another analogous compensation struc-
ture that the Secretary may specify through regula-
tions. 
‘‘(4) GROSS
SPENDING.—The term ‘gross 
spending’, with respect to prescription drug benefits 
under a group health plan or health insurance cov-
erage, means the amount spent by a group health 
plan or health insurance issuer on prescription drug 
benefits, calculated before the application of rebates, 
fees, alternative discounts, or other remuneration. 
‘‘(5) NET SPENDING.—The term ‘net spending’, 
with respect to prescription drug benefits under a 
group health plan or health insurance coverage, 
means the amount spent by a group health plan or 
health insurance issuer on prescription drug bene-
fits, calculated after the application of rebates, fees, 
alternative discounts, or other remuneration. 
‘‘(6) PLAN SPONSOR.—The term ‘plan sponsor’ 
has the meaning given such term in section 
3(16)(B). 
‘‘(7) REMUNERATION.—The term ‘remunera-
tion’ has the meaning given such term by the Sec-
retary through rulemaking, which shall be reevalu-
ated by the Secretary every 5 years. 
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‘‘(8) SPECIFIED LARGE EMPLOYER.—The term 
‘specified large employer’ means, in connection with 
a group health plan (including group health insur-
ance coverage offered in connection with such a 
plan) established or maintained by a single em-
ployer, with respect to a calendar year or a plan 
year, as applicable, an employer who employed an 
average of at least 100 employees on business days 
during the preceding calendar year or plan year and 
who employs at least 1 employee on the first day of 
the calendar year or plan year. 
‘‘(9) SPECIFIED LARGE PLAN.—The term ‘spec-
ified large plan’ means a group health plan (includ-
ing group health insurance coverage offered in con-
nection with such a plan) established or maintained 
by a plan sponsor described in clause (ii) or (iii) of 
section 3(16)(B) that had an average of at least 100 
participants on business days during the preceding 
calendar year or plan year, as applicable. 
‘‘(10) WHOLESALE
ACQUISITION
COST.—The 
term ‘wholesale acquisition cost’ has the meaning 
given such term in section 1847A(c)(6)(B) of the 
Social 
Security 
Act 
(42 
U.S.C. 
1395w– 
3a(c)(6)(B)).’’; 
(B) in section 502 (29 U.S.C. 1132)— 
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(i) in subsection (a)(6), by striking 
‘‘or (9)’’ and inserting ‘‘(9), or (13)’’; 
(ii) in subsection (b)(3), by striking 
‘‘under subsection (c)(9)’’ and inserting 
‘‘under paragraphs (9) and (13) of sub-
section (c)’’; and 
(iii) in subsection (c), by adding at 
the end the following: 
‘‘(13) SECRETARIAL ENFORCEMENT AUTHORITY 
RELATING TO OVERSIGHT OF PHARMACY BENEFIT 
MANAGEMENT SERVICES.— 
‘‘(A) FAILURE
TO
PROVIDE
INFORMA-
TION.—The Secretary may impose a penalty 
against a plan administrator of a group health 
plan, a health insurance issuer offering group 
health insurance coverage, or an entity pro-
viding pharmacy benefit management services 
on behalf of such a plan or issuer, or an appli-
cable entity (as defined in section 726(f)) that 
violates section 726(a); an entity providing 
pharmacy benefit management services on be-
half of such a plan or issuer that fails to pro-
vide the information required under section 
726(b); or any person who causes a group 
health plan to fail to provide the information 
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required under section 726(c), in the amount of 
$10,000 for each day during which such viola-
tion continues or such information is not dis-
closed or reported. 
‘‘(B) FALSE
INFORMATION.—The Sec-
retary may impose a penalty against a plan ad-
ministrator of a group health plan, a health in-
surance issuer offering group health insurance 
coverage, an entity providing pharmacy benefit 
management services, or an applicable entity 
(as defined in section 726(f)) that knowingly 
provides false information under section 726, in 
an amount not to exceed $100,000 for each 
item of false information. Such penalty shall be 
in addition to other penalties as may be pre-
scribed by law. 
‘‘(C) WAIVERS.—The Secretary may waive 
penalties under subparagraph (A), or extend 
the period of time for compliance with a re-
quirement of this section, for an entity in viola-
tion of section 726 that has made a good-faith 
effort to comply with the requirements of sec-
tion 726.’’; and 
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(C) 
in 
section 
732(a) 
(29 
U.S.C. 
1191a(a)), by striking ‘‘section 711’’ and in-
serting ‘‘sections 711 and 726’’. 
(2) CLERICAL AMENDMENT.—The table of con-
tents in section 1 of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1001 et seq.) 
is amended by inserting after the item relating to 
section 725 the following new item: 
‘‘Sec. 726. Oversight of entities that provide pharmacy benefit management 
services.’’. 
(c) INTERNAL REVENUE CODE OF 1986.— 
(1) IN GENERAL.—Chapter 100 of the Internal 
Revenue Code of 1986 is amended by adding at the 
end of subchapter B the following: 
‘‘SEC. 9826. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR-
MACY BENEFIT MANAGEMENT SERVICES. 
‘‘(a) IN GENERAL.—For plan years beginning on or 
after the date that is 30 months after the date of enact-
ment of this section (referred to in this subsection and 
subsection (b) as the ‘effective date’), a group health plan, 
or an entity providing pharmacy benefit management serv-
ices on behalf of such a plan, shall not enter into a con-
tract, including an extension or renewal of a contract, en-
tered into on or after the effective date, with an applicable 
entity unless such applicable entity agrees to— 
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‘‘(1) not limit or delay the disclosure of infor-
mation to the group health plan in such a manner 
that prevents an entity providing pharmacy benefit 
management services on behalf of a group health 
plan from making the reports described in sub-
section (b); and 
‘‘(2) provide the entity providing pharmacy ben-
efit management services on behalf of a group health 
plan relevant information necessary to make the re-
ports described in subsection (b). 
‘‘(b) REPORTS.— 
‘‘(1) IN GENERAL.—For plan years beginning 
on or after the effective date, in the case of any con-
tract between a group health plan and an entity pro-
viding pharmacy benefit management services on be-
half of such plan, including an extension or renewal 
of such a contract, entered into on or after the effec-
tive date, the entity providing pharmacy benefit 
management services on behalf of such a group 
health plan, not less frequently than every 6 months 
(or, at the request of a group health plan, not less 
frequently than quarterly, and under the same con-
ditions, terms, and cost of the semiannual report 
under this subsection), shall submit to the group 
health plan a report in accordance with this section. 
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Each such report shall be made available to such 
group health plan in plain language, in a machine- 
readable format, and as the Secretary may deter-
mine, other formats. Each such report shall include 
the information described in paragraph (2). 
‘‘(2) INFORMATION DESCRIBED.—For purposes 
of paragraph (1), the information described in this 
paragraph is, with respect to drugs covered by a 
group health plan during each reporting period— 
‘‘(A) in the case of a group health plan 
that is offered by a specified large employer or 
that is a specified large plan, and is not offered 
as health insurance coverage, or in the case of 
health insurance coverage for which the election 
under paragraph (3) is made for the applicable 
reporting period— 
‘‘(i) a list of drugs for which a claim 
was filed and, with respect to each such 
drug on such list— 
‘‘(I) the contracted compensation 
paid by the group health plan for each 
covered drug (identified by the Na-
tional Drug Code) to the entity pro-
viding pharmacy benefit management 
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services or other applicable entity on 
behalf of the group health plan; 
‘‘(II) the contracted compensa-
tion paid to the pharmacy, by any en-
tity providing pharmacy benefit man-
agement services or other applicable 
entity on behalf of the group health 
plan, for each covered drug (identified 
by the National Drug Code); 
‘‘(III) for each such claim, the 
difference between the amount paid 
under subclause (I) and the amount 
paid under subclause (II); 
‘‘(IV) the proprietary name, es-
tablished name or proper name, and 
National Drug Code; 
‘‘(V) for each claim for the drug 
(including original prescriptions and 
refills) and for each dosage unit of the 
drug for which a claim was filed, the 
type of dispensing channel used to 
furnish the drug, including retail, mail 
order, or specialty pharmacy; 
‘‘(VI) with respect to each drug 
dispensed, for each type of dispensing 
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claim for such drug was 
filed through the applicable 
dispensing channel; 
‘‘(CC) dosage units and 
dosage units per fill of such 
drug; and 
‘‘(DD) days supply of 
such drug per fill; 
‘‘(VII) the net price per course of 
treatment or single fill, such as a 30- 
day supply or 90-day supply to the 
plan after rebates, fees, alternative 
discounts, or other remuneration re-
ceived from applicable entities; 
‘‘(VIII) the total amount of out- 
of-pocket spending by participants 
and beneficiaries on such drug, in-
cluding spending through copayments, 
coinsurance, and deductibles, but not 
including any amounts spent by par-
ticipants and beneficiaries on drugs 
not covered under the plan, or for 
which no claim is submitted under the 
plan; 
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‘‘(IX) the total net spending on 
the drug; 
‘‘(X) the total amount received, 
or expected to be received, by the plan 
from any applicable entity in rebates, 
fees, alternative discounts, or other 
remuneration; 
‘‘(XI) the total amount received, 
or expected to be received, by the enti-
ty providing pharmacy benefit man-
agement services, from applicable en-
tities, in rebates, fees, alternative dis-
counts, or other remuneration from 
such entities— 
‘‘(aa) for claims incurred 
during the reporting period; and 
‘‘(bb) that is related to utili-
zation of such drug or spending 
on such drug; and 
‘‘(XII) to the extent feasible, in-
formation on the total amount of re-
muneration for such drug, including 
copayment assistance dollars paid, co-
payment cards applied, or other dis-
counts provided by each drug manu-
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facturer (or entity administering co-
payment assistance on behalf of such 
drug manufacturer), to the partici-
pants and beneficiaries enrolled in 
such plan; 
‘‘(ii) a list of each therapeutic class 
(as defined by the Secretary) for which a 
claim was filed under the group health 
plan during the reporting period, and, with 
respect to each such therapeutic class— 
‘‘(I) the total gross spending on 
drugs in such class before rebates, 
price 
concessions, 
alternative 
dis-
counts, or other remuneration from 
applicable entities; 
‘‘(II) the net spending in such 
class after such rebates, price conces-
sions, alternative discounts, or other 
remuneration from applicable entities; 
‘‘(III) the total amount received, 
or expected to be received, by the enti-
ty providing pharmacy benefit man-
agement services, from applicable en-
tities, in rebates, fees, alternative dis-
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counts, or other remuneration from 
such entities— 
‘‘(aa) for claims incurred 
during the reporting period; and 
‘‘(bb) that is related to utili-
zation of drugs or drug spending; 
‘‘(IV) the average net spending 
per 30-day supply and per 90-day 
supply by the plan and its partici-
pants and beneficiaries, among all 
drugs within the therapeutic class for 
which a claim was filed during the re-
porting period; 
‘‘(V) the number of participants 
and beneficiaries who filled a prescrip-
tion for a drug in such class, includ-
ing the National Drug Code for each 
such drug; 
‘‘(VI) if applicable, a description 
of the formulary tiers and utilization 
mechanisms (such as prior authoriza-
tion or step therapy) employed for 
drugs in that class; and 
‘‘(VII) the total out-of-pocket 
spending under the plan by partici-
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pants and beneficiaries, including 
spending through copayments, coin-
surance, and deductibles, but not in-
cluding any amounts spent by partici-
pants and beneficiaries on drugs not 
covered under the plan or for which 
no claim is submitted under the plan; 
‘‘(iii) with respect to any drug for 
which gross spending under the group 
health plan exceeded $10,000 during the 
reporting period or, in the case that gross 
spending under the group health plan ex-
ceeded $10,000 during the reporting pe-
riod with respect to fewer than 50 drugs, 
with respect to the 50 prescription drugs 
with the highest spending during the re-
porting period— 
‘‘(I) a list of all other drugs in 
the same therapeutic class as such 
drug; 
‘‘(II) if applicable, the rationale 
for the formulary placement of such 
drug in that therapeutic category or 
class, selected from a list of standard 
rationales established by the Sec-
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retary, in consultation with stake-
holders; and 
‘‘(III) any change in formulary 
placement compared to the prior plan 
year; and 
‘‘(iv) in the case that such plan (or an 
entity providing pharmacy benefit manage-
ment services on behalf of such plan) has 
an affiliated pharmacy or pharmacy under 
common ownership, including mandatory 
mail and specialty home delivery programs, 
retail and mail auto-refill programs, and 
cost sharing assistance incentives funded 
by an entity providing pharmacy benefit 
services— 
‘‘(I) an explanation of any ben-
efit design parameters that encourage 
or require participants and bene-
ficiaries in the plan to fill prescrip-
tions at mail order, specialty, or retail 
pharmacies; 
‘‘(II) the percentage of total pre-
scriptions dispensed by such phar-
macies to participants or beneficiaries 
in such plan; and 
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‘‘(III) a list of all drugs dis-
pensed by such pharmacies to partici-
pants or beneficiaries enrolled in such 
plan, and, with respect to each drug 
dispensed— 
‘‘(aa) the amount charged, 
per dosage unit, per 30-day sup-
ply, or per 90-day supply (as ap-
plicable) to the plan, and to par-
ticipants and beneficiaries; 
‘‘(bb) the median amount 
charged to such plan, and the 
interquartile range of the costs, 
per dosage unit, per 30-day sup-
ply, and per 90-day supply, in-
cluding amounts paid by the par-
ticipants and beneficiaries, when 
the same drug is dispensed by 
other pharmacies that are not af-
filiated with or under common 
ownership with the entity and 
that are included in the phar-
macy network of such plan; 
‘‘(cc) the lowest cost per 
dosage unit, per 30-day supply 
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and per 90-day supply, for each 
such drug, including amounts 
charged to the plan and to par-
ticipants and beneficiaries, that 
is available from any pharmacy 
included in the network of such 
plan; and 
‘‘(dd) the net acquisition 
cost per dosage unit, per 30-day 
supply, and per 90-day supply, if 
such drug is subject to a max-
imum price discount; and 
‘‘(B) with respect to any group health 
plan, regardless of whether the plan is offered 
by a specified large employer or whether it is a 
specified large plan— 
‘‘(i) a summary document for the 
group health plan that includes such infor-
mation described in clauses (i) through (iv) 
of subparagraph (A), as specified by the 
Secretary through guidance, program in-
struction, or otherwise (with no require-
ment of notice and comment rulemaking), 
that the Secretary determines useful to 
group health plans for purposes of select-
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ing pharmacy benefit management serv-
ices, such as an estimated net price to 
group health plan and participant or bene-
ficiary, a cost per claim, the fee structure 
or reimbursement model, and estimated 
cost per participant or beneficiary; 
‘‘(ii) a summary document for plans 
to provide to participants and beneficiaries, 
which shall be made available to partici-
pants or beneficiaries upon request to their 
group health plan, that— 
‘‘(I) contains such information 
described in clauses (iii), (iv), (v), and 
(vi), as applicable, as specified by the 
Secretary through guidance, program 
instruction, or otherwise (with no re-
quirement of notice and comment 
rulemaking) that the Secretary deter-
mines useful to participants or bene-
ficiaries in better understanding the 
plan or benefits under such plan; 
‘‘(II) contains only aggregate in-
formation; and 
‘‘(III) states that participants 
and beneficiaries may request specific, 
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claims-level information required to be 
furnished under subsection (c) from 
the group health plan; 
‘‘(iii) with respect to drugs covered by 
such plan during such reporting period— 
‘‘(I) the total net spending by the 
plan for all such drugs; 
‘‘(II) the total amount received, 
or expected to be received, by the plan 
from any applicable entity in rebates, 
fees, alternative discounts, or other 
remuneration; and 
‘‘(III) to the extent feasible, in-
formation on the total amount of re-
muneration for such drugs, including 
copayment assistance dollars paid, co-
payment cards applied, or other dis-
counts provided by each drug manu-
facturer (or entity administering co-
payment assistance on behalf of such 
drug manufacturer) to participants 
and beneficiaries; 
‘‘(iv) amounts paid directly or indi-
rectly in rebates, fees, or any other type of 
compensation 
(as 
defined 
in 
section 
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408(b)(2)(B)(ii)(dd)(AA) of the Employee 
Retirement 
Income 
Security 
Act 
(29 
U.S.C. 1108(b)(2)(B)(ii)(dd)(AA))) to bro-
kerage firms, brokers, consultants, advi-
sors, or any other individual or firm, for— 
‘‘(I) the referral of the group 
health plan’s business to an entity 
providing pharmacy benefit manage-
ment services, including the identity 
of the recipient of such amounts; 
‘‘(II) consideration of the entity 
providing pharmacy benefit manage-
ment services by the group health 
plan; or 
‘‘(III) the retention of the entity 
by the group health plan; 
‘‘(v) an explanation of any benefit de-
sign parameters that encourage or require 
participants and beneficiaries in such plan 
to fill prescriptions at mail order, specialty, 
or retail pharmacies that are affiliated with 
or under common ownership with the enti-
ty providing pharmacy benefit management 
services under such plan, including manda-
tory mail and specialty home delivery pro-
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100 
grams, retail and mail auto-refill pro-
grams, and cost-sharing assistance incen-
tives directly or indirectly funded by such 
entity; and 
‘‘(vi) total gross spending on all drugs 
under the plan during the reporting period. 
‘‘(3) OPT-IN FOR GROUP HEALTH INSURANCE 
COVERAGE OFFERED BY A SPECIFIED LARGE EM-
PLOYER OR THAT IS A SPECIFIED LARGE PLAN.—In 
the case of group health insurance coverage offered 
in connection with a group health plan that is of-
fered by a specified large employer or is a specified 
large plan, such group health plan may, on an an-
nual basis, for plan years beginning on or after the 
date that is 30 months after the date of enactment 
of this section, elect to require an entity providing 
pharmacy benefit management services on behalf of 
the health insurance issuer to submit to such group 
health plan a report that includes all of the informa-
tion described in paragraph (2)(A), in addition to 
the information described in paragraph (2)(B). 
‘‘(4) PRIVACY REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—An entity providing 
pharmacy benefit management services on be-
half of a group health plan shall report infor-
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101 
mation under paragraph (1) in a manner con-
sistent with the privacy regulations promul-
gated under section 13402(a) of the Health In-
formation Technology for Economic and Clin-
ical Health Act (42 U.S.C. 17932(a)) and con-
sistent with the privacy regulations promul-
gated under the Health Insurance Portability 
and Accountability Act of 1996 in part 160 and 
subparts A and E of part 164 of title 45, Code 
of Federal Regulations (or successor regula-
tions) (referred to in this paragraph as the 
‘HIPAA privacy regulations’) and shall restrict 
the use and disclosure of such information ac-
cording to such privacy regulations and such 
HIPAA privacy regulations. 
‘‘(B) ADDITIONAL REQUIREMENTS.— 
‘‘(i) IN
GENERAL.—An entity pro-
viding pharmacy benefit management serv-
ices on behalf of a group health plan that 
submits a report under paragraph (1) shall 
ensure that such report contains only sum-
mary health information, as defined in sec-
tion 164.504(a) of title 45, Code of Fed-
eral Regulations (or successor regulations). 
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102 
‘‘(ii) RESTRICTIONS.—In carrying out 
this subsection, a group health plan shall 
comply with section 164.504(f) of title 45, 
Code of Federal Regulations (or a suc-
cessor regulation), and a plan sponsor shall 
act in accordance with the terms of the 
agreement described in such section. 
‘‘(C) RULE OF CONSTRUCTION.— 
‘‘(i) Nothing in this section shall be 
construed to modify the requirements for 
the creation, receipt, maintenance, or 
transmission of protected health informa-
tion under the HIPAA privacy regulations. 
‘‘(ii) Nothing in this section shall be 
construed to affect the application of any 
Federal or State privacy or civil rights law, 
including the HIPAA privacy regulations, 
the Genetic Information Nondiscrimination 
Act of 2008 (Public Law 110–233) (in-
cluding the amendments made by such 
Act), the Americans with Disabilities Act 
of 1990 (42 U.S.C. 12101 et seq.), section 
504 of the Rehabilitation Act of 1973 (29 
U.S.C. 794), section 1557 of the Patient 
Protection and Affordable Care Act (42 
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103 
U.S.C. 18116), title VI of the Civil Rights 
Act of 1964 (42 U.S.C. 2000d), and title 
VII of the Civil Rights Act of 1964 (42 
U.S.C. 2000e). 
‘‘(D) WRITTEN NOTICE.—Each plan year, 
group health plans shall provide to each partici-
pant or beneficiary written notice informing the 
participant or beneficiary of the requirement for 
entities providing pharmacy benefit manage-
ment services on behalf of the group health 
plan to submit reports to group health plans 
under paragraph (1), as applicable, which may 
include incorporating such notification in plan 
documents provided to the participant or bene-
ficiary, or providing individual notification. 
‘‘(E) LIMITATION
TO
BUSINESS
ASSOCI-
ATES.—A group health plan receiving a report 
under paragraph (1) may disclose such informa-
tion only to the entity from which the report 
was received or to that entity’s business associ-
ates as defined in section 160.103 of title 45, 
Code of Federal Regulations (or successor regu-
lations) or as permitted by the HIPAA privacy 
regulations. 
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104 
‘‘(F) CLARIFICATION REGARDING PUBLIC 
DISCLOSURE
OF
INFORMATION.—Nothing in 
this section shall prevent an entity providing 
pharmacy benefit management services on be-
half of a group health plan, from placing rea-
sonable restrictions on the public disclosure of 
the information contained in a report described 
in paragraph (1), except that such plan or enti-
ty may not— 
‘‘(i) restrict disclosure of such report 
to the Department of Health and Human 
Services, the Department of Labor, or the 
Department of the Treasury; or 
‘‘(ii) prevent disclosure for the pur-
poses of subsection (c), or any other public 
disclosure requirement under this section. 
‘‘(G) LIMITED
FORM
OF
REPORT.—The 
Secretary shall define through rulemaking a 
limited form of the report under paragraph (1) 
required with respect to any group health plan 
established by a plan sponsor that is, or is af-
filiated with, a drug manufacturer, drug whole-
saler, or other direct participant in the drug 
supply chain, in order to prevent anti-competi-
tive behavior. 
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105 
‘‘(5) STANDARD FORMAT AND REGULATIONS.— 
‘‘(A) IN
GENERAL.—Not later than 18 
months after the date of enactment of this sec-
tion, the Secretary shall specify through rule-
making a standard format for entities providing 
pharmacy benefit management services on be-
half of group health plans, to submit reports re-
quired under paragraph (1). 
‘‘(B) 
ADDITIONAL
REGULATIONS.—Not 
later than 18 months after the date of enact-
ment of this section, the Secretary shall, 
through rulemaking, promulgate any other final 
regulations necessary to implement the require-
ments of this section. In promulgating such 
regulations, the Secretary shall, to the extent 
practicable, align the reporting requirements 
under this section with the reporting require-
ments under section 9825. 
‘‘(c) REQUIREMENT TO PROVIDE INFORMATION TO 
PARTICIPANTS OR BENEFICIARIES.—A group health plan, 
upon request of a participant or beneficiary, shall provide 
to such participant or beneficiary— 
‘‘(1) the summary document described in sub-
section (b)(2)(B)(ii); and 
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106 
‘‘(2) the information described in subsection 
(b)(2)(A)(i)(III) with respect to a claim made by or 
on behalf of such participant or beneficiary. 
‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to permit a health insurance issuer, 
group health plan, entity providing pharmacy benefit man-
agement services on behalf of a group health plan or 
health insurance issuer, or other entity to restrict disclo-
sure to, or otherwise limit the access of, the Secretary to 
a report described in subsection (b)(1) or information re-
lated to compliance with subsections (a), (b), or (c) of this 
section or section 4980D(g) by such issuer, plan, or entity. 
‘‘(e) DEFINITIONS.—In this section: 
‘‘(1) APPLICABLE ENTITY.—The term ‘applica-
ble entity’ means— 
‘‘(A) an applicable group purchasing orga-
nization, drug manufacturer, distributor, whole-
saler, rebate aggregator (or other purchasing 
entity designed to aggregate rebates), or associ-
ated third party; 
‘‘(B) any subsidiary, parent, affiliate, or 
subcontractor of a group health plan, health in-
surance issuer, entity that provides pharmacy 
benefit management services on behalf of such 
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