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SECTION 1. SHORT TITLE.

This Act may be cited as the ''Prescription Drug Benefit Equity Act
of 1996''.

SEC. 2. EQUITY IN PROVISION OF PRESCRIPTION DRUG COVERAGE.

(a) In General.--No health plan (as defined in section 5(1)) may
provide for mail-order prescription drug coverage (as defined in
section 5(2)) unless the plan also provides non-mail-order prescription
drug coverage consistent with subsection (b).
(b) Equitable Coverage.--A health plan provides non-mail-order
prescription drug coverage consistent with this subsection only if--
(1) benefits under the non-mail-order prescription coverage
are provided for in the case of all drugs and all circumstances
under which benefits are provided under the mail-order
prescription drug coverage;
(2) no deductible or similar cost-sharing is imposed with
respect to benefits under the non-mail-order prescription drug
coverage unless such a deductible or similar cost-sharing is
imposed with respect to benefits under the mail-order
prescription drug coverage; and
(3) the benefits for the non-mail-order coverage assures
payments consistent with either (or both) of the following
subparagraphs:
(A) The dollar amount of payment for prescription
drug coverage is not less than the dollar amount of
benefits provided with respect to the mail-order
coverage for that same coverage.
(B) The cost-sharing (including deductibles,
copayments, or coinsurance) imposed with respect to
non-mail-order coverage that is not greater (as a
percentage of charges or dollar amount, as specified
under the coverage) than the cost-sharing imposed with
respect to the mail-order coverage.
(c) Application to Organizations and Insurers.--A requirement
imposed under this section on a health plan offered by a health
maintenance organization or insurer shall be deemed to be a requirement
imposed on the organization or insurer.

SEC. 3. ENFORCEMENT.

(a) Health Plan Issued by HMOs and Insurers.--
(1) In general.--Each State shall require that each health
plan issued, sold, renewed, offered for sale or operated in
such State by a health maintenance organization meet the
requirements of section 2 pursuant to an enforcement plan filed
by the State with the Secretary of Health and Human Services. A
State shall submit such information as required by such
Secretary demonstrating effective implementation of the State
enforcement plan.
(2) Failure to implement plan.--In the case of the failure
of a State to substantially enforce the requirements of section
2 with respect to health plans as provided for under the State
enforcement plan filed under paragraph (1), the Secretary of
Health and Human Services shall implement an enforcement plan
to enforce such requirements for organizations and insurers in
such State. In the case of a State that fails to substantially
enforce such requirements, each health maintenance organization
and insurer operating in such State shall be subject to civil
enforcement as provided for under sections 502, 504, 506, and
510 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1132, 1134, 1136, and 1140) through the Secretary of
Health and Human Services. The civil penalties contained in
paragraphs (1) and (2) of section 502(c) of such Act (29 U.S.C.
1132(c) (1) and (2)) shall apply to any information required by
such Secretary to be disclosed and reported under this
subsection.
(b) Employee Health Benefit Plans.--With respect to employee health
benefit plans, the Secretary of Labor shall enforce the requirements of
section 2 in the same manner as provided for under sections 502, 504,
506, and 510 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1132, 1134, 1136, and 1140). The civil penalties contained in
paragraphs (1) and (2) of section 502(c) of such Act (29 U.S.C. 1132(c)
(1) and (2)) shall apply to any information required by such Secretary
to be disclosed and reported under this subsection.
(c) Medicaid.--With respect to a health plan described in section
5(1)(C), the requirements of section 2 shall be treated as requirements
of a State plan under title XIX of the Social Security Act.
(d) FEHBP.--With respect to a health plan described in section
5(1)(E), the requirements of section 2 shall be treated as a condition
for contracting with the plan under chapter 89 of title 5, United
States Code.
(e) Medicare HMOs.--With respect to a health plan described in
section 5(1)(F), the requirements of section 2 shall be treated as
requirements of a State plan under section 1876 of the Social Security
Act.
(f) Regulations.--The Secretaries of Labor and Health and Human
Services and the Director of the Office of Personnel Management may
promulgate such regulations as may be necessary or appropriate to carry
out this Act.
(g) Technical Amendment.--Section 508 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1138) is amended by inserting
''and under the Prescription Drug Benefit Equity Act of 1996'' before
the period.

SEC. 4. CONSTRUCTION; PREEMPTION.

(a) In General.--Nothing in this Act shall be construed as
preventing a health plan from--
(1) restricting the drugs for which benefits are provided
under the plan, or
(2) imposing a limitation on the amount of benefits
provided with respect to such coverage or the cost-sharing that
may be imposed with respect to such coverage,
so long as such restrictions and limitations are consistent with this
Act.
(b) Preemption of State Law.--
(1) In general.--Subject to paragraph (2), nothing in this
Act shall be construed to prevent a State from establishing,
implementing, or continuing in effect standards and
requirements--
(A) not prescribed in this Act; or
(B) related to the provision of prescription drug
coverage that are consistent with, and are not in
direct conflict with, this Act and provide greater
protection or benefit to participants, beneficiaries,
or individuals.
(2) Rule of construction.--Nothing in paragraph (1) shall
be construed to affect or modify the provisions of section 514
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1144).

SEC. 5. DEFINITIONS.

In this Act:
(1) Health plan.--The term ''health plan'' means--
(A) an employee welfare benefit plan to the extent
that the plan provides medical care to employees or
their dependents (as defined under the terms of the
plan) directly or through insurance, reimbursement, or
otherwise, and includes a group health plan (within the
meaning of section 5000(b)(1) of the Internal Revenue
Code of 1986);
(B) benefits consisting of medical care (provided
directly, through insurance or reimbursement, or
otherwise and whether or not provided to a group,
association, or individual) under any hospital or
medical service policy or certificate, hospital or
medical service plan contract, or health maintenance
organization group contract offered by an insurer or a
health maintenance organization;
(C) a State medical assistance plan under title XIX
of the Social Security Act;
(D) a medicare supplemental policy under section
1882 of the Social Security Act;
(E) a health plan under chapter 89 of title 5,
United States Code; and
(F) benefits provided under a risk-sharing contract
under section 1876 of the Social Security Act.
(2) Mail-order prescription drug coverage.--The term
''mail-order prescription drug coverage'' means provision of
benefits for prescription drugs and biologicals that are
delivered directly to beneficiaries through the mail or similar
means.
(3) Non-mail-order prescription drug coverage.--The term
''non-mail-order prescription drug coverage'' means the
provision of benefits for prescription drugs and biologicals
through one or more local pharmacies.
(4) Local pharmacy.--The term ''local pharmacy'' means,
with respect to a prescription drug or biological and a
beneficiary, an establishment that is authorized to dispense
such drug or biological and that is located within such
distance (not to exceed 5 miles in the case of a beneficiary
residing in an urban area or 10 miles in the case of a
beneficiary residing in a non-urban area) of the residence of
such beneficiary, as the Secretary of Health and Human Services
shall prescribe.
(5) Employee health benefit plan.--The term ''employee
health benefit plan'' means any employee welfare benefit plan,
governmental plan, or church plan (as defined under paragraphs
(1), (32), and (33) of section 3 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002 (1), (32), and
(33))), that provides or pays for health benefits (such as
provider and hospital benefits) for participants and
beneficiaries (as defined in such section) whether--
(A) directly;
(B) through a health plan offered by a health
maintenance organization or insurer; or
(C) otherwise.
Such term includes any health benefit plan under section 5(e)
of the Peace Corps Act (22 U.S.C. 2504(e)).
(6) Health maintenance organization; hmo.--The terms
''health maintenance organization'' and ''HMO'' mean--
(A) a federally qualified health maintenance
organization (as defined in section 1301(a) of the
Public Health Service Act (42 U.S.C. 300e(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 maintenance organization,
if it is subject to State law which regulates insurance (within
the meaning of section 514(b)(2) of the Employee Retirement
Income Security Act of 1974).
(7) Insurer.--The term ''insurer'' means an insurance
company, insurance service, or insurance organization which is
licensed to engage in the business of insurance in a State and
which is subject to State law which regulates insurance (within
the meaning of section 514(b)(2)(A) of the Employee Retirement
Income Security Act of 1974).
(8) State.--The term ''State'' means each of the several
States, the District of Columbia, Puerto Rico, the United
States Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.

SEC. 6. EFFECTIVE DATE.

This Act shall apply to coverage provided under--
(1) health plans described in section 5(1)(A), for plan
years beginning more than 6 months after the date of the
enactment of this Act, or
(2) other health plans, for contract years beginning more
than 6 months after the date of the enactment of this Act.
Prescription Drug Benefit Equity Act of 1996 - Prohibits a health plan from providing mail-order prescription drug coverage without also providing non-mail-order prescription drug coverage meeting benefit and cost-sharing requirements. Provides for enforcement.