betes. This results in significantly higher health 
costs for all Americans. 
(3) Staying as healthy as possible often requires 
an individual to change behavior and assume more 
personal responsibility for his or her health. 
(4) Personal responsibility for one’s health 
should include purchasing one’s own private health 
care coverage. 
(5) To accompany this new focus on staying 
healthy and personal responsibility, our government 
must guarantee that all Americans receive private 
affordable health coverage that can never be taken 
away. 
(6) Financing this guarantee should be a 
shared responsibility between individuals, the Gov-
ernment, and employers. 
(7) The $2,200,000,000,000 spent annually on 
American health care must be spent more effectively 
in order to meet this guarantee. 
(8) This guarantee must include easier access 
to understandable information about the quality, 
cost, and effectiveness of health care providers, prod-
ucts, and services. 
(9) The fact that businesses in the United 
States compete globally against businesses whose 
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governments pay for health care, coupled with the 
aging of the American population and the explosive 
growth of preventable health problems, makes the 
status quo in American health care unacceptable. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) ADULT INDIVIDUAL.—The term ‘‘adult indi-
vidual’’ means an individual who— 
(A) is— 
(i) age 19 or older; 
(ii) a resident of a State; 
(iii)(I) a United States citizen; or 
(II) an alien with permanent resi-
dence; 
(iv) not a dependent child; and 
(v) not an alien unlawfully present in 
the United States; and 
(B) in the case of an incarcerated indi-
vidual, such an individual who is incarcerated 
for less than 1 month. 
(2) ALIEN
WITH
PERMANENT
RESIDENCE.— 
The term ‘‘alien with permanent residence’’ has the 
meaning given the term ‘‘qualified alien’’ in section 
431 of the Personal Responsibility and Work Oppor-
tunity Reconciliation Act of 1996 (8 U.S.C. 1641). 
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(3) COVERED INDIVIDUAL.—The term ‘‘covered 
individual’’ means an individual who is enrolled in a 
HAPI plan. 
(4) DEPENDENT CHILD.—The term ‘‘dependent 
child’’ has the meaning given the term ‘‘qualifying 
child’’ in section 152(c) of the Internal Revenue 
Code of 1986. 
(5) HAPI PLAN.—The term ‘‘HAPI plan’’ 
means a Healthy Americans Private Insurance plan 
described under subtitle B of title I. 
(6) HHA.—The term ‘‘HHA’’ means the 
Health Help Agency of a State as described under 
title V. 
(7) HEALTH
INSURANCE
ISSUER.—The term 
‘‘health insurance issuer’’ means an insurance com-
pany, insurance service, or insurance organization 
(including a health maintenance organization, as de-
fined in paragraph (8)) which is licensed to engage 
in the business of insurance in a State and which is 
subject to State law which regulates insurance (with-
in the meaning of section 514(b)(2) of the Employee 
Retirement Income Security Act of 1974). Such 
term does not include a group health plan. 
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(8) HEALTH MAINTENANCE ORGANIZATION.— 
The 
term 
‘‘health 
maintenance 
organization’’ 
means— 
(A) a federally qualified health mainte-
nance organization (as defined in section 
1301(a)), 
(B) an organization recognized under State 
law as a health maintenance organization, or 
(C) a similar organization regulated under 
State law for solvency in the same manner and 
to the same extent as such a health mainte-
nance organization. 
(9) PERSONAL
RESPONSIBILITY
CONTRIBU-
TION.—The term ‘‘personal responsibility contribu-
tion’’ means a payment made by a covered individual 
to a health care provider or a health insurance 
issuer with respect to the provision of health care 
services under a HAPI plan, not including any 
health insurance premium payment. 
(10) 
QUALIFIED
COLLECTIVE
BARGAINING 
AGREEMENT.— 
(A) IN
GENERAL.—The term ‘‘qualified 
collective bargaining agreement’’ means an 
agreement between a qualified collective bar-
gaining employer and an employee organization 
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that represents the employees of such employer 
that is in effect until the date that is the earlier 
of— 
(i) January 1 of the first year which 
is more than 9 years after the date of en-
actment of this Act, or 
(ii) the date the collective bargaining 
agreement expires. 
(B) QUALIFIED COLLECTIVE BARGAINING 
EMPLOYER.—The term ‘‘qualified collective bar-
gaining employer’’ means an employer who pro-
vides health insurance to employees under the 
terms of a collective bargaining agreement 
which is entered into before the date of the en-
actment of this Act. 
(11) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of Health and Human Services. 
(12) STATE.—The term ‘‘State’’ means each of 
the several States of the United States, the District 
of Columbia, the Commonwealth of Puerto Rico, the 
Virgin Islands, American Samoa, Guam, the Com-
monwealth of the Northern Mariana Islands, and 
other territories of the United States. 
(13) STATE OF RESIDENCE.—The term ‘‘State 
of residence’’, with respect to an individual, means 
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the State in which the individual has primary resi-
dence. 
TITLE I—HEALTHY AMERICANS 
PRIVATE INSURANCE PLANS 
Subtitle A—Guaranteed Private 
Coverage 
SEC. 101. GUARANTEE OF HEALTHY AMERICANS PRIVATE 
INSURANCE COVERAGE. 
Not later than the date that is 4 years after the date 
of enactment of this Act, each adult individual shall have 
the opportunity to purchase a Healthy Americans Private 
Insurance plan that meets the requirements of subtitle B, 
(referred to in this Act as ‘‘HAPI plan’’) for such indi-
vidual and the dependent children of such individual. 
SEC. 102. INDIVIDUAL RESPONSIBILITY TO ENROLL IN A 
HEALTHY AMERICANS PRIVATE INSURANCE 
PLAN. 
(a) INDIVIDUAL RESPONSIBILITY.— 
(1) ADULT
INDIVIDUALS.—Each adult indi-
vidual shall have the responsibility to enroll in a 
HAPI plan offered through the HHA of the adult 
individual’s State of residence, unless the adult indi-
vidual— 
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(A) provides evidence of receipt of coverage 
under, or enrollment in a health plan offered 
through— 
(i) the Medicare program under title 
XVIII of the Social Security Act; 
(ii) a health insurance plan offered by 
the Department of Defense; 
(iii) an employee benefit plan through 
a former employer; 
(iv) a qualified collective bargaining 
agreement; 
(v) the Department of Veterans Af-
fairs; or 
(vi) the Indian Health Service; or 
(B) is opposed to health plan coverage for 
religious reasons, including an individual who 
declines health plan coverage due to a reliance 
on healing using spiritual means through prayer 
alone. 
(2) DEPENDENT CHILDREN.—Each adult indi-
vidual shall have the responsibility to enroll each de-
pendent child of the adult individual in a HAPI plan 
offered through the HHA of the adult individual’s 
State of residence, unless the adult individual— 
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(A) provides evidence that the dependent 
child is enrolled in a health plan offered 
through a program described in paragraph 
(1)(A); or 
(B) is described in paragraph (1)(B). 
(3) VERIFICATION OF RELIGIOUS EXCEPTION.— 
Each State shall develop guidelines for determining 
and verifying the individuals who qualify for the ex-
ception under paragraph (1)(B). 
(b) PENALTY
FOR FAILURE TO PURCHASE COV-
ERAGE.— 
(1) PENALTY.— 
(A) IN GENERAL.—In the case of an indi-
vidual described in subparagraph (B), such in-
dividual shall be subject to a late enrollment 
penalty in an amount determined under sub-
paragraph (C). 
(B) INDIVIDUALS SUBJECT TO PENALTY.— 
An individual described in this subparagraph is 
an adult individual for whom there is a contin-
uous period of 63 days or longer, beginning on 
the applicable date (as defined in subparagraph 
(E)) and ending on the date of enrollment in a 
HAPI plan, during all of which the individual— 
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(i) was not covered under a HAPI 
plan or a health plan offered through a 
program described in paragraph (1)(A) of 
section 102(a); and 
(ii) was not described in paragraph 
(1)(B) of such section. 
(C) AMOUNT OF PENALTY.— 
(i) IN GENERAL.—The amount deter-
mined under this subparagraph for an in-
dividual is an amount equal to the sum 
of— 
(I) the number of uncovered 
months multiplied by the weighted av-
erage of the monthly premium for 
HAPI plans of the same class of cov-
erage as the individual’s in the appli-
cable coverage area (determined with-
out regard to any subsidy under sec-
tion 121); and 
(II) 15 percent of the amount de-
termined under subclause (I). 
(ii) UNCOVERED MONTH DEFINED.— 
For purposes of this subsection, the term 
‘‘uncovered month’’ means, with respect to 
an individual, any month beginning on or 
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after the applicable date (as defined in 
subparagraph (E)) unless the individual 
can demonstrate that the individual— 
(I) was covered under a HAPI 
plan or a health plan offered through 
a program described in paragraph 
(1)(A) of section 102(a) for any por-
tion of such month; or 
(II) was described in paragraph 
(1)(B) of such section for any portion 
of such month. 
A month shall not be treated as an uncov-
ered month if the individual has already 
paid a late enrollment penalty under this 
subsection for such month or if the indi-
vidual was incarcerated for the entire 
month. 
(D) PAYMENT.—Payment of any late en-
rollment penalty by an individual under this 
subsection shall be made to the HHA of the in-
dividual’s State of residence under procedures 
established by the State. 
(E) APPLICABLE
DATE.—In this para-
graph, the term ‘‘applicable date’’ means the 
earlier of— 
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(i) the day after the end of the State’s 
first open enrollment period for HAPI 
plans (during which all adult individuals 
are eligible to enroll); and 
(ii) the day after the end of the first 
enrollment period for a fallback HAPI plan 
in the State. 
(2) WAIVER.—An HHA of a State may reduce 
or waive the amount of any late enrollment penalty 
applicable to an individual under this subsection if 
payment of such penalty would constitute a hardship 
(determined under procedures established by the 
State). 
(3) ENFORCEMENT.—Each State shall deter-
mine appropriate mechanisms, which may not in-
clude revocation or ineligibility for coverage under a 
HAPI plan, to enforce the responsibility of each 
adult individual to purchase HAPI plan coverage for 
such individual and any dependent children of such 
individual under subsection (a). 
(c) OTHER INSURANCE COVERAGE.—Nothing in this 
Act shall be construed to prohibit an individual from en-
rolling in a health insurance plan that is not a HAPI plan. 
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Subtitle B—Standards for Healthy 
Americans 
Private 
Insurance 
Coverage 
SEC. 111. HEALTHY AMERICANS PRIVATE INSURANCE 
PLANS. 
(a) OPTIONS.—A State HHA— 
(1) shall require that at least 2 HAPI plans 
that comply with the requirements of subsection (b), 
be offered through the HHA to each individual in 
the State; 
(2) shall require the offering of 1 or more 
HAPI plans that include coverage for benefits, 
items, or services in addition to the standardized 
benefits, items, or services required under subsection 
(b) for HAPI plans if— 
(A) such additional benefits, items, and 
services build upon the standardized benefits 
package; 
(B) a list of such additional benefits, 
items, or services, and the prices applicable to 
such additional benefits, items, and services, is 
displayed in a manner that is separate from the 
description of the standardized benefits, items, 
or services required under the plan under this 
section (and consistent with the manner in 
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which such items are displayed by medigap poli-
cies) and that enables a consumer to identify 
such additional benefits, items, and services and 
the cost associated with such; and 
(C) no premium subsidies are available 
under subtitle C for any portion of the pre-
miums for a HAPI plan that are attributable to 
such additional benefits, items, or services; and 
(3) may permit the offering of 1 or more actu-
arially equivalent HAPI plans through the HHA as 
provided for in subsection (c). 
(b) STANDARDIZED COVERAGE REQUIREMENTS FOR 
HAPI PLANS.— 
(1) IN
GENERAL.—Each HAPI plan offered 
through an HHA shall— 
(A) provide benefits for health care items 
and services that are actuarially equivalent or 
greater in value than the benefits offered as of 
January 1, 2007, under the Blue Cross/Blue 
Shield Standard Plan provided under the Fed-
eral Employees Health Benefit Program under 
chapter 89 of title 5, United States Code, in-
cluding coverage of an initial primary care as-
sessment and annual physical examinations; 
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(B) provide benefits for wellness programs 
and incentives to promote the use of such pro-
grams; 
(C) provide coverage for catastrophic med-
ical events that result in out-of-pocket costs for 
an individual or family if lifetime limits are ex-
hausted; 
(D) designate a health care provider, such 
as a primary care physician, nurse practitioner, 
or other qualified health provider, to monitor 
the health and health care of a covered individ-
uals (such provider shall be known as the 
‘‘health home’’ of the covered individual); 
(E) ensure that, as part of the first visit 
with a primary care physician or the health 
home of a covered individual, such provider and 
individual determine a care plan to maximize 
the health of the individual through wellness 
and prevention activities; 
(F) provide benefits for comprehensive dis-
ease prevention, early detection, disease man-
agement, and chronic condition management 
that meets minimum standards developed by 
the Secretary; 
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(G) provide for the application of personal 
responsibility contribution requirements with re-
spect to covered benefits in a manner that may 
be similar to the cost sharing requirements ap-
plied as of January 1, 2007, under the Blue 
Cross/Blue Shield Standard Plan provided 
under the Federal Employees Health Benefit 
Program under chapter 89 of title 5, United 
States Code, except that no contributions shall 
be required for— 
(i) preventive items or services; and 
(ii) early detection, disease manage-
ment, or chronic pain treatment items or 
services; and 
(H) comply with the requirements of sec-
tion 112. 
(2) DETERMINATION
OF
BENEFITS
BY
SEC-
RETARY.—Not later than 1 year after the date of 
enactment of this Act, the Secretary shall promul-
gate guidelines concerning the benefits, items, and 
services that are covered under paragraph (1). 
(3) COVERAGE FOR FAMILY PLANNING.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), a health insurance issuer 
shall make available supplemental coverage for 
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abortion services that may be purchased in con-
junction with enrollment in a HAPI plan or an 
actuarially equivalent healthy American plan. 
(B) RELIGIOUS AND MORAL EXCEPTION.— 
Nothing in this paragraph shall be construed to 
require a health insurance issuer affiliated with 
a religious institution to provide the coverage 
described in subparagraph (A). 
(4) RULE OF CONSTRUCTION.—Nothing in this 
subsection shall be construed to prohibit a HAPI 
plan from providing coverage for benefits, items, and 
services in addition to the coverage required under 
this subsection. No premium subsidies shall be avail-
able under subtitle C for any portion of the pre-
miums for a HAPI plan that are attributable to 
such additional benefits, items, or services. 
(c) ACTUARIALLY EQUIVALENT HEALTHY AMERICAN 
PLANS.—Each actuarially equivalent healthy American 
plan offered through an HHA shall— 
(1) cover all treatments, items, services, and 
providers at least to the same extent as those cov-
ered under a HAPI plan that— 
(A) shall include coverage for— 
(i) preventive items and services (in-
cluding well baby care and well child care 
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and appropriate immunizations) and dis-
ease management services; 
(ii) inpatient and outpatient hospital 
services; 
(iii) physicians’ surgical and medical 
services; and 
(iv) laboratory and x-ray services; and 
(B) may include additional supplemental 
benefits to the extent approved by the State 
and provided for in advance in the plan con-
tract; and 
(2) ensure that no personal responsibility con-
tribution requirements are applied for prevention 
and chronic disease management benefits, items, or 
services. 
(d) PREMIUMS AND RATING REQUIREMENTS.— 
(1) CLASSES OF COVERAGE.—With respect to a 
HAPI plan, a health insurance issuer shall provide 
for the following classes of coverage: 
(A) Coverage of an individual. 
(B) Coverage of a married couple or do-
mestic partnership (as determined by a State) 
without dependent children. 
(C) Coverage of an adult individual with 1 
or more dependent children. 
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(D) Coverage of a married couple or do-
mestic partnership (as determined by a State) 
with 1 or more dependent children. 
(2) DETERMINATIONS OF PREMIUMS.—With re-
spect to each class of coverage described in para-
graph (1), a health insurance issuer shall determine 
the premium amount for a HAPI plan using ad-
justed community rating principals, as described in 
paragraphs (3) and (4) established by the State. 
States may permit premium variations based only on 
geography, tobacco use, and family size. A State 
may determine to have no variation. 
(3) REWARDS.—A State shall permit a health 
insurance issuer to provide premium discounts and 
other incentives to enrollees based on the participa-
tion of such enrollees in wellness, chronic disease 
management, and other programs designed to im-
prove the health of the enrollees. 
(4) LIMITATION.—A health insurance issuer 
shall not consider age, gender, industry, health sta-
tus, or claims experience in determining premiums 
under this subsection. 
(e) APPLICATION OF STATE MANDATE LAWS.—State 
benefit mandate laws that would otherwise be applicable 
to HAPI plans shall be preempted. 
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SEC. 112. SPECIFIC COVERAGE REQUIREMENTS. 
(a) IN GENERAL.—Each HAPI plan offered through 
a HHA shall— 
(1) provide for increased portability through 
limitations on the application of preexisting condi-
tion exclusions, in a manner similar to that provided 
for under section 2701 of the Public Health Service 
Act (42 U.S.C. 300gg), as such section existed on 
the day before the date of enactment of this Act, ex-
cept that the State shall develop procedures to en-
sure that preexisting exclusion limitations do not 
apply to new enrollees who had no applicable cred-
itable coverage immediately prior to the first enroll-
ment period; 
(2) provide for the guaranteed availability of 
coverage to prospective enrollees in a manner similar 
to that provided for under section 2711 of the Pub-
lic Health Service Act (42 U.S.C. 300gg–11), as 
such section existed on the day before the date of 
enactment of this Act; 
(3) provide for the guaranteed renewability of 
coverage in a manner similar to that provided for 
under section 2712 of the Public Health Service Act 
(42 U.S.C. 300gg–12), as such section existed on 
the day before the date of enactment of this Act, ex-
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cept that the prohibition on market reentry provided 
for under such section shall be deemed to be 2 years; 
(4) prohibit discrimination against individual 
enrollees and prospective enrollees based on health 
status in a manner similar to that provided for 
under section 2702 of the Public Health Service Act 
(42 U.S.C. 300gg–1), as such section existed on the 
day before the date of enactment of this Act; 
(5) provide coverage protections for enrollees 
who are mothers and newborns in a manner similar 
to that provided for under section 2704 of the Pub-
lic Health Service Act (42 U.S.C. 300gg–3), as such 
section existed on the day before the date of enact-
ment of this Act; 
(6) provide for full parity in the application of 
certain limits to mental health benefits in a manner 
similar to that provided for under section 2705 of 
the Public Health Service Act (42 U.S.C. 300gg–4), 
as such section would be in effect if the amendments 
described in subsection (c) had been made; 
(7) provide coverage for reconstructive surgery 
following a mastectomy in a manner similar to that 
provided for under section 2706 of the Public 
Health Service Act (42 U.S.C. 300gg–5), as such 
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section existed on the day before the date of enact-
ment of this Act; and 
(8) prohibit discrimination on the basis of ge-
netic information, as provided for under subsection 
(b). 
(b) GENETIC NONDISCRIMINATION.— 
(1) PROHIBITION ON GENETIC INFORMATION AS 
A CONDITION OF ELIGIBILITY.—A HAPI plan shall 
not establish rules for the eligibility (including con-
tinued eligibility) of any individual to enroll in cov-
erage under the plan based on genetic information 
(including information about a request for or receipt 
of genetic services by an individual or family mem-
ber of such individual). 
(2) PROHIBITION ON GENETIC INFORMATION IN 
SETTING PREMIUM RATES.—A HAPI plan shall not 
adjust premium or personal responsibility contribu-
tion amounts for an individual on the basis of ge-
netic information concerning the individual or a fam-
ily member of the individual (including information 
about a request for or receipt of genetic services by 
an individual or family member of such individual). 
(3) GENETIC TESTING.— 
(A) LIMITATION ON REQUESTING OR RE-
QUIRING
GENETIC
TESTING.—A HAPI plan 
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shall not request or require an individual or a 
family member of such individual to undergo a 
genetic test. 
(B) RULE OF CONSTRUCTION.—Nothing in 
this subsection shall be construed to— 
(i) limit the authority of a health care 
professional who is providing health care 
services with respect to an individual to re-
quest that such individual or a family 
member of such individual undergo a ge-
netic test; 
(ii) limit the authority of a health care 
professional who is employed by or affili-
ated with a HAPI plan and who is pro-
viding health care services to an individual 
as part of a bona fide wellness program to 
notify such individual of the availability of 
a genetic test or to provide information to 
such individual regarding such genetic test; 
or 
(iii) authorize or permit a health care 
professional to require that an individual 
undergo a genetic test. 
(c) 
AMENDMENTS
PROVIDING
FULL
MENTAL 
HEALTH PARITY.—For purposes of subsection (a)(6), the 
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amendments to section 2705 of the Public Health Service 
Act (42 U.S.C. 300gg–5) referred to in such subsection 
are as follows: 
(1) EXTENSION
OF
PARITY
TO
TREATMENT 
LIMITS
AND
BENEFICIARY
FINANCIAL
REQUIRE-
MENTS.—In such section— 
(A) in subsection (a), add at the end the 
following new paragraphs: 
‘‘(3) TREATMENT LIMITS.— 
‘‘(A) NO TREATMENT LIMIT.—If the plan 
or coverage does not include a treatment limit 
(as defined in subparagraph (D)) on substan-
tially all medical and surgical benefits in any 
category of items or services (specified in sub-
paragraph (C)), the plan or coverage may not 
impose any treatment limit on mental health 
and substance-related disorder benefits that are 
classified in the same category of items or serv-
ices. 
‘‘(B) TREATMENT LIMIT.—If the plan or 
coverage includes a treatment limit on substan-
tially all medical and surgical benefits in any 
category of items or services, the plan or cov-
erage may not impose such a treatment limit on 
mental health and substance-related disorder 
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benefits for items and services within such cat-
egory that are more restrictive than the pre-
dominant treatment limit that is applicable to 
medical and surgical benefits for items and 
services within such category. 
‘‘(C) CATEGORIES
OF
ITEMS
AND
SERV-
ICES FOR APPLICATION OF TREATMENT LIMITS 
AND
BENEFICIARY
FINANCIAL
REQUIRE-
MENTS.—For purposes of this paragraph and 
paragraph (4), there shall be the following four 
categories of items and services for benefits, 
whether medical and surgical benefits or mental 
health and substance-related disorder benefits, 
and all medical and surgical benefits and all 
mental health and substance related benefits 
shall be classified into one of the following cat-
egories: 
‘‘(i) INPATIENT, IN-NETWORK.—Items 
and services furnished on an inpatient 
basis and within a network of providers es-
tablished or recognized under such plan or 
coverage. 
‘‘(ii) INPATIENT, OUT-OF-NETWORK.— 
Items and services furnished on an inpa-
tient basis and outside any network of pro-
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viders established or recognized under such 
plan or coverage. 
‘‘(iii) OUTPATIENT, 
IN-NETWORK.— 
Items and services furnished on an out-
patient basis and within a network of pro-
viders established or recognized under such 
plan or coverage. 
‘‘(iv) 
OUTPATIENT, 
OUT-OF-NET-
WORK.—Items and services furnished on 
an outpatient basis and outside any net-
work of providers established or recognized 
under such plan or coverage. 
‘‘(D) TREATMENT
LIMIT
DEFINED.—For 
purposes of this paragraph, the term ‘treatment 
limit’ means, with respect to a plan or coverage, 
limitation on the frequency of treatment, num-
ber of visits or days of coverage, or other simi-
lar limit on the duration or scope of treatment 
under the plan or coverage. 
‘‘(E) PREDOMINANCE.—For purposes of 
this subsection, a treatment limit or financial 
requirement with respect to a category of items 
and services is considered to be predominant if 
it is the most common or frequent of such type 
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of limit or requirement with respect to such cat-
egory of items and services. 
‘‘(4) 
BENEFICIARY
FINANCIAL
REQUIRE-
MENTS.— 
‘‘(A) NO
BENEFICIARY
FINANCIAL
RE-
QUIREMENT.—If the plan or coverage does not 
include a beneficiary financial requirement (as 
defined in subparagraph (C)) on substantially 
all medical and surgical benefits within a cat-
egory of items and services (specified in para-
graph (3)(C)), the plan or coverage may not im-
pose such a beneficiary financial requirement on 
mental health and substance-related disorder 
benefits for items and services within such cat-
egory. 
‘‘(B) BENEFICIARY
FINANCIAL
REQUIRE-
MENT.— 
‘‘(i) TREATMENT
OF
DEDUCTIBLES, 
OUT-OF-POCKET LIMITS, AND SIMILAR FI-
NANCIAL REQUIREMENTS.—If the plan or 
coverage includes a deductible, a limitation 
on out-of-pocket expenses, or similar bene-
ficiary financial requirement that does not 
apply separately to individual items and 
services on substantially all medical and 
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surgical benefits within a category of items 
and services, the plan or coverage shall 
apply such requirement (or, if there is 
more than one such requirement for such 
category of items and services, the pre-
dominant requirement for such category) 
both to medical and surgical benefits with-
in such category and to mental health and 
substance-related disorder benefits within 
such category and shall not distinguish in 
the application of such requirement be-
tween such medical and surgical benefits 
and such mental health and substance-re-
lated disorder benefits. 
‘‘(ii) OTHER
FINANCIAL
REQUIRE-
MENTS.—If the plan or coverage includes a 
beneficiary financial requirement not de-
scribed in clause (i) on substantially all 
medical and surgical benefits within a cat-
egory of items and services, the plan or 
coverage may not impose such financial re-
quirement on mental health and substance- 
related disorder benefits for items and 
services within such category in a way that 
is more costly to the participant or bene-
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ficiary than the predominant beneficiary fi-
nancial requirement applicable to medical 
and surgical benefits for items and services 
within such category. 
‘‘(C) BENEFICIARY
FINANCIAL
REQUIRE-
MENT DEFINED.—For purposes of this para-
graph, the term ‘beneficiary financial require-
ment’ includes, with respect to a plan or cov-
erage, any deductible, coinsurance, co-payment, 
other cost sharing, and limitation on the total 
amount that may be paid by a participant or 
beneficiary with respect to benefits under the 
plan or coverage, but does not include the appli-
cation of any aggregate lifetime limit or annual 
limit.’’; and 
(B) in subsection (b)— 
(i) strike ‘‘construed—’’ and all that 
follows through ‘‘(1) as requiring’’ and in-
sert ‘‘construed as requiring’’; 
(ii) by strike ‘‘; or’’ and insert a pe-
riod; and 
(iii) by strike paragraph (2). 
(2) EXPANSION TO SUBSTANCE-RELATED DIS-
ORDER BENEFITS AND REVISION OF DEFINITION.— 
In such section— 
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(A) strike ‘‘mental health benefits’’ and in-
sert ‘‘mental health and substance-related dis-
order benefits’’ each place it appears; and 
(B) in paragraph (4) of subsection (e)— 
(i) strike ‘‘MENTAL
HEALTH
BENE-
FITS’’ and insert ‘‘MENTAL HEALTH AND 
SUBSTANCE-RELATED
DISORDER
BENE-
FITS’’; 
(ii) strike ‘‘benefits with respect to 
mental health services’’ and insert ‘‘bene-
fits with respect to services for mental 
health conditions or substance-related dis-
orders’’; and 
(iii) strike ‘‘, but does not include 
benefits with respect to treatment of sub-
stances abuse or chemical dependency’’. 
(3) AVAILABILITY
OF
PLAN
INFORMATION 
ABOUT CRITERIA FOR MEDICAL NECESSITY.—In sub-
section (a) of such section, as amended by para-
graph (1)(A), add at the end the following new para-
graph: 
‘‘(5) AVAILABILITY OF PLAN INFORMATION.— 
The criteria for medical necessity determinations 
made under the plan with respect to mental health 
and substance-related disorder benefits (or the 
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health insurance coverage offered in connection with 
the plan with respect to such benefits) shall be made 
available by the plan administrator (or the health in-
surance issuer offering such coverage) to any cur-
rent or potential participant, beneficiary, or con-
tracting provider upon request. The reason for any 
denial under the plan (or coverage) of reimburse-
ment or payment for services with respect to mental 
health and substance-related disorder benefits in the 
case of any participant or beneficiary shall, upon re-
quest, be made available by the plan administrator 
(or the health insurance issuer offering such cov-
erage) to the participant or beneficiary.’’. 
(4) MINIMUM
BENEFIT
REQUIREMENTS.—In 
subsection (a) of such section, add at the end the 
following new paragraph: 
‘‘(6) MINIMUM SCOPE OF COVERAGE AND EQ-
UITY IN OUT-OF-NETWORK BENEFITS.— 
‘‘(A) 
MINIMUM
SCOPE
OF
MENTAL 
HEALTH AND SUBSTANCE-RELATED DISORDER 
BENEFITS.—In the case of a group health plan 
(or health insurance coverage offered in connec-
tion with such a plan) that provides any mental 
health and substance-related disorder benefits, 
the plan or coverage shall include benefits for 
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any mental health condition or substance-re-
lated disorder for which benefits are provided 
under the benefit plan option offered under 
chapter 89 of title 5, United States Code, with 
the highest average enrollment as of the begin-
ning of the most recent year beginning on or 
before the beginning of the plan year involved. 
‘‘(B) EQUITY
IN
COVERAGE
OF
OUT-OF- 
NETWORK BENEFITS.— 
‘‘(i) IN GENERAL.—In the case of a 
plan or coverage that provides both med-
ical and surgical benefits and mental 
health and substance-related disorder bene-
fits, if medical and surgical benefits are 
provided for substantially all items and 
services in a category specified in clause 
(ii) furnished outside any network of pro-
viders established or recognized under such 
plan or coverage, the mental health and 
substance-related disorder benefits shall 
also be provided for items and services in 
such category furnished outside any net-
work of providers established or recognized 
under such plan or coverage in accordance 
with the requirements of this section. 
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‘‘(ii) CATEGORIES
OF
ITEMS
AND 
SERVICES.—For purposes of clause (i), 
there shall be the following three categories 
of items and services for benefits, whether 
medical and surgical benefits or mental 
health and substance-related disorder bene-
fits, and all medical and surgical benefits 
and all mental health and substance-re-
lated disorder benefits shall be classified 
into one of the following categories: 
‘‘(I) EMERGENCY.—Items and 
services, whether furnished on an in-
patient or outpatient basis, required 
for the treatment of an emergency 
medical condition (including an emer-
gency condition relating to mental 
health 
and 
substance-related 
dis-
orders). 
‘‘(II) 
INPATIENT.—Items 
and 
services not described in subclause (I) 
furnished on an inpatient basis. 
‘‘(III) OUTPATIENT.—Items and 
services not described in subclause (I) 
furnished on an outpatient basis.’’. 
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(5) REVISION
OF
INCREASED
COST
EXEMP-
TION.—Amend paragraph (2) of subsection (c) of 
such section to read as follows: 
‘‘(2) INCREASED COST EXEMPTION.— 
‘‘(A) IN
GENERAL.—With respect to a 
group health plan (or health insurance coverage 
offered in connection with such a plan), if the 
application of this section to such plan (or cov-
erage) results in an increase for the plan year 
involved of the actual total costs of coverage 
with respect to medical and surgical benefits 
and mental health and substance-related dis-
order benefits under the plan (as determined 
and certified under subparagraph (C)) by an 
amount that exceeds the applicable percentage 
described in subparagraph (B) of the actual 
total plan costs, the provisions of this section 
shall not apply to such plan (or coverage) dur-
ing the following plan year, and such exemption 
shall apply to the plan (or coverage) for 1 plan 
year. 
‘‘(B) APPLICABLE PERCENTAGE.—With re-
spect to a plan (or coverage), the applicable 
percentage described in this paragraph shall 
be— 
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‘‘(i) 2 percent in the case of the first 
plan year which begins after the date of 
the enactment of the Paul Wellstone Men-
tal Health and Addiction Equity Act of 
2007; and 
‘‘(ii) 1 percent in the case of each 
subsequent plan year. 
‘‘(C) DETERMINATIONS BY ACTUARIES.— 
Determinations as to increases in actual costs 
under a plan (or coverage) for purposes of this 
subsection shall be made by a qualified actuary 
who is a member in good standing of the Amer-
ican Academy of Actuaries. Such determina-
tions shall be certified by the actuary and be 
made available to the general public. 
‘‘(D) 6-MONTH
DETERMINATIONS.—If a 
group health plan (or a health insurance issuer 
offering coverage in connection with such a 
plan) seeks an exemption under this paragraph, 
determinations under subparagraph (A) shall be 
made after such plan (or coverage) has com-
plied with this section for the first 6 months of 
the plan year involved. 
‘‘(E) NOTIFICATION.—A group health plan 
under this part shall comply with the notice re-
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quirement under section 712(c)(2)(E) of the 
Employee Retirement Income Security Act of 
1974 with respect to the a modification of men-
tal health and substance-related disorder bene-
fits as permitted under this paragraph as if 
such section applied to such plan.’’. 
(6) CHANGE IN EXCLUSION FOR SMALLEST EM-
PLOYERS.—In subsection (c)(1)(B) of such section— 
(A) insert ‘‘(or 1 in the case of an em-
ployer residing in a State that permits small 
groups to include a single individual)’’ after ‘‘at 
least 2’’ the first place it appears; and 
(B) strike ‘‘and who employs at least 2 
employees on the first day of the plan year’’. 
(7) ELIMINATION
OF
SUNSET
PROVISION.— 
Strike subsection (f) of such section. 
(8) 
CLARIFICATION
REGARDING
PREEMP-
TION.—In such section, insert after subsection (e) 
the following new subsection: 
‘‘(f) PREEMPTION, RELATION TO STATE LAWS.— 
‘‘(1) IN
GENERAL.—Nothing in this section 
shall be construed to preempt any State law that 
provides greater consumer protections, benefits, 
methods of access to benefits, rights or remedies 
that are greater than the protections, benefits, meth-
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