[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 595 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 595

  To amend the Public Health Service Act, Employee Retirement Income 
Security Act of 1974, and the Internal Revenue Code of 1986 to provide 
 for nondiscriminatory coverage for substance abuse treatment services 
          under private group and individual health coverage.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 22, 2001

Mr. Wellstone (for himself, Mr. Daschle, and Mr. Inouye) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
  To amend the Public Health Service Act, Employee Retirement Income 
Security Act of 1974, and the Internal Revenue Code of 1986 to provide 
 for nondiscriminatory coverage for substance abuse treatment services 
          under private group and individual health coverage.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fairness in Treatment: The Drug and 
Alcohol Addiction Recovery Act of 2001''.

SEC. 2. PARITY IN SUBSTANCE ABUSE TREATMENT BENEFITS.

    (a) Group Health Plans.--
            (1) Public health service act amendments.--
                    (A) In general.--Subpart 2 of part A of title XXVII 
                of the Public Health Service Act (42 U.S.C. 300gg-4 et 
                seq.) is amended by adding at the end the following:

``SEC. 2707. PARITY IN THE APPLICATION OF TREATMENT LIMITATIONS AND 
              FINANCIAL REQUIREMENTS TO SUBSTANCE ABUSE TREATMENT 
              BENEFITS.

    ``(a) In General.--In the case of a group health plan (or health 
insurance coverage offered in connection with such a plan) that 
provides both medical and surgical benefits and substance abuse 
treatment benefits, the plan or coverage shall not impose treatment 
limitations or financial requirements on the substance abuse treatment 
benefits unless similar limitations or requirements are imposed for 
medical and surgical benefits.
    ``(b) Construction.--Nothing in this section shall be construed--
            ``(1) as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        substance abuse treatment benefits; or
            ``(2) to prevent a group health plan or a health insurance 
        issuer offering group health insurance coverage from 
        negotiating the level and type of reimbursement with a provider 
        for care provided in accordance with this section.
    ``(c) Small Employer Exemption.--
            ``(1) In general.--This section shall not apply to any 
        group health plan (and group health insurance coverage offered 
        in connection with a group health plan) for any plan year of a 
        small employer.
            ``(2) Small employer.--For purposes of paragraph (1), the 
        term `small employer' means, in connection with a group health 
        plan with respect to a calendar year and a plan year, an 
        employer who employed an average of at least 2 but not more 
        than 25 employees on business days during the preceding 
        calendar year and who employs at least 2 employees on the first 
        day of the plan year.
            ``(3) Application of certain rules in determination of 
        employer size.--For purposes of this subsection:
                    ``(A) Application of aggregation rule for 
                employers.--Rules similar to the rules under 
                subsections (b), (c), (m), and (o) of section 414 of 
                the Internal Revenue Code of 1986 shall apply for 
                purposes of treating persons as a single employer.
                    ``(B) Employers not in existence in preceding 
                year.--In the case of an employer which was not in 
                existence throughout the preceding calendar year, the 
                determination of whether such employer is a small 
                employer shall be based on the average number of 
                employees that it is reasonably expected such employer 
                will employ on business days in the current calendar 
                year.
                    ``(C) Predecessors.--Any reference in this 
                subsection to an employer shall include a reference to 
                any predecessor of such employer.
    ``(d) Separate Application to Each Option Offered.--In the case of 
a group health plan that offers a participant or beneficiary two or 
more benefit package options under the plan, the requirements of this 
section shall be applied separately with respect to each such option.
    ``(e) Definitions.--For purposes of this section:
            ``(1) Treatment limitation.--The term `treatment 
        limitation' means, with respect to benefits under a group 
        health plan or health insurance coverage, any day or visit 
        limits imposed on coverage of benefits under the plan or 
        coverage during a period of time.
            ``(2) Financial requirement.--The term `financial 
        requirement' means, with respect to benefits under a group 
        health plan or health insurance coverage, any deductible, 
        coinsurance, or cost-sharing or an annual or lifetime dollar 
        limit imposed with respect to the benefits under the plan or 
        coverage.
            ``(3) Medical or surgical benefits.--The term `medical or 
        surgical benefits' means benefits with respect to medical or 
        surgical services, as defined under the terms of the plan or 
        coverage (as the case may be), but does not include substance 
        abuse treatment benefits.
            ``(4) Substance abuse treatment benefits.--The term 
        `substance abuse treatment benefits' means benefits with 
        respect to substance abuse treatment services.
            ``(5) Substance abuse treatment services.--The term 
        `substance abuse services' means any of the following items and 
        services provided for the treatment of substance abuse:
                    ``(A) Inpatient treatment, including 
                detoxification.
                    ``(B) Non-hospital residential treatment.
                    ``(C) Outpatient treatment, including screening and 
                assessment, medication management, individual, group, 
                and family counseling, and relapse prevention.
                    ``(D) Prevention services, including health 
                education and individual and group counseling to 
                encourage the reduction of risk factors for substance 
                abuse.
            ``(6) Substance abuse.--The term `substance abuse' includes 
        chemical dependency.
    ``(f) Notice.--A group health plan under this part shall comply 
with the notice requirement under section 713(f) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
of this section as if such section applied to such plan.''.
                    (B) Conforming amendment.--Section 2723(c) of the 
                Public Health Service Act (42 U.S.C. 300gg-23(c)) is 
                amended by striking ``section 2704'' and inserting 
                ``sections 2704 and 2707''.
            (2) ERISA amendments.--
                    (A) In general.--Subpart B of part 7 of subtitle B 
                of title I of the Employee Retirement Income Security 
                Act of 1974 (29 U.S.C. 1185 et seq.) is amended by 
                adding at the end the following:

``SEC. 714. PARITY IN THE APPLICATION OF TREATMENT LIMITATIONS AND 
              FINANCIAL REQUIREMENTS TO SUBSTANCE ABUSE TREATMENT 
              BENEFITS.

    ``(a) In General.--In the case of a group health plan (or health 
insurance coverage offered in connection with such a plan) that 
provides both medical and surgical benefits and substance abuse 
treatment benefits, the plan or coverage shall not impose treatment 
limitations or financial requirements on the substance abuse treatment 
benefits unless similar limitations or requirements are imposed for 
medical and surgical benefits.
    ``(b) Construction.--Nothing in this section shall be construed--
            ``(1) as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        substance abuse treatment benefits; or
            ``(2) to prevent a group health plan or a health insurance 
        issuer offering group health insurance coverage from 
        negotiating the level and type of reimbursement with a provider 
        for care provided in accordance with this section.
    ``(c) Small Employer Exemption.--
            ``(1) In general.--This section shall not apply to any 
        group health plan (and group health insurance coverage offered 
        in connection with a group health plan) for any plan year of a 
        small employer.
            ``(2) Small employer.--For purposes of paragraph (1), the 
        term `small employer' means, in connection with a group health 
        plan with respect to a calendar year and a plan year, an 
        employer who employed an average of at least 2 but not more 
        than 25 employees on business days during the preceding 
        calendar year and who employs at least 2 employees on the first 
        day of the plan year.
            ``(3) Application of certain rules in determination of 
        employer size.--For purposes of this subsection:
                    ``(A) Application of aggregation rule for 
                employers.--Rules similar to the rules under 
                subsections (b), (c), (m), and (o) of section 414 of 
                the Internal Revenue Code of 1986 shall apply for 
                purposes of treating persons as a single employer.
                    ``(B) Employers not in existence in preceding 
                year.--In the case of an employer which was not in 
                existence throughout the preceding calendar year, the 
                determination of whether such employer is a small 
                employer shall be based on the average number of 
                employees that it is reasonably expected such employer 
                will employ on business days in the current calendar 
                year.
                    ``(C) Predecessors.--Any reference in this 
                subsection to an employer shall include a reference to 
                any predecessor of such employer.
    ``(d) Separate Application to Each Option Offered.--In the case of 
a group health plan that offers a participant or beneficiary two or 
more benefit package options under the plan, the requirements of this 
section shall be applied separately with respect to each such option.
    ``(e) Definitions.--For purposes of this section:
            ``(1) Treatment limitation.--The term `treatment 
        limitation' means, with respect to benefits under a group 
        health plan or health insurance coverage, any day or visit 
        limits imposed on coverage of benefits under the plan or 
        coverage during a period of time.
            ``(2) Financial requirement.--The term `financial 
        requirement' means, with respect to benefits under a group 
        health plan or health insurance coverage, any deductible, 
        coinsurance, or cost-sharing or an annual or lifetime dollar 
        limit imposed with respect to the benefits under the plan or 
        coverage.
            ``(3) Medical or surgical benefits.--The term `medical or 
        surgical benefits' means benefits with respect to medical or 
        surgical services, as defined under the terms of the plan or 
        coverage (as the case may be), but does not include substance 
        abuse treatment benefits.
            ``(4) Substance abuse treatment benefits.--The term 
        `substance abuse treatment benefits' means benefits with 
        respect to substance abuse treatment services.
            ``(5) Substance abuse treatment services.--The term 
        `substance abuse services' means any of the following items and 
        services provided for the treatment of substance abuse:
                    ``(A) Inpatient treatment, including 
                detoxification.
                    ``(B) Non-hospital residential treatment.
                    ``(C) Outpatient treatment, including screening and 
                assessment, medication management, individual, group, 
                and family counseling, and relapse prevention.
                    ``(D) Prevention services, including health 
                education and individual and group counseling to 
                encourage the reduction of risk factors for substance 
                abuse.
            ``(6) Substance abuse.--The term `substance abuse' includes 
        chemical dependency.
    ``(f) Notice Under Group Health Plan.--The imposition of the 
requirements of this section shall be treated as a material 
modification in the terms of the plan described in section 102(a)(1), 
for purposes of assuring notice of such requirements under the plan; 
except that the summary description required to be provided under the 
last sentence of section 104(b)(1) with respect to such modification 
shall be provided by not later than 60 days after the first day of the 
first plan year in which such requirements apply.''.
                    (B) Conforming amendments.--
                            (i) Section 731(c) of the Employee 
                        Retirement Income Security Act of 1974 (29 
                        U.S.C. 1191(c)) is amended by striking 
                        ``section 711'' and inserting ``sections 711 
                        and 714''.
                            (ii) Section 732(a) of the Employee 
                        Retirement Income Security Act of 1974 (29 
                        U.S.C. 1191a(a)) is amended by striking 
                        ``section 711'' and inserting ``sections 711 
                        and 714''.
                            (iii) The table of contents in section 1 of 
                        the Employee Retirement Income Security Act of 
                        1974 is amended by inserting after the item 
                        relating to section 713 the following new item:

``Sec. 714. Parity in the application of treatment limitations and 
                            financial requirements to substance abuse 
                            treatment benefits.''.
            (3) Internal revenue code amendments.--
                    (A) In general.--Subchapter B of chapter 100 of the 
                Internal Revenue Code of 1986 is amended by inserting 
                after section 9812, the following:

``SEC. 9813. PARITY IN THE APPLICATION OF TREATMENT LIMITATIONS AND 
              FINANCIAL REQUIREMENTS TO SUBSTANCE ABUSE TREATMENT 
              BENEFITS.

    ``(a) In General.--In the case of a group health plan (or health 
insurance coverage offered in connection with such a plan) that 
provides both medical and surgical benefits and substance abuse 
treatment benefits, the plan or coverage shall not impose treatment 
limitations or financial requirements on the substance abuse treatment 
benefits unless similar limitations or requirements are imposed for 
medical and surgical benefits.
    ``(b) Construction.--Nothing in this section shall be construed--
            ``(1) as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        substance abuse treatment benefits; or
            ``(2) to prevent a group health plan or a health insurance 
        issuer offering group health insurance coverage from 
        negotiating the level and type of reimbursement with a provider 
        for care provided in accordance with this section.
    ``(c) Small Employer Exemption.--
            ``(1) In general.--This section shall not apply to any 
        group health plan (and group health insurance coverage offered 
        in connection with a group health plan) for any plan year of a 
        small employer.
            ``(2) Small employer.--For purposes of paragraph (1), the 
        term `small employer' means, in connection with a group health 
        plan with respect to a calendar year and a plan year, an 
        employer who employed an average of at least 2 but not more 
        than 25 employees on business days during the preceding 
        calendar year and who employs at least 2 employees on the first 
        day of the plan year.
            ``(3) Application of certain rules in determination of 
        employer size.--For purposes of this subsection:
                    ``(A) Application of aggregation rule for 
                employers.--Rules similar to the rules under 
                subsections (b), (c), (m), and (o) of section 414 of 
                the Internal Revenue Code of 1986 shall apply for 
                purposes of treating persons as a single employer.
                    ``(B) Employers not in existence in preceding 
                year.--In the case of an employer which was not in 
                existence throughout the preceding calendar year, the 
                determination of whether such employer is a small 
                employer shall be based on the average number of 
                employees that it is reasonably expected such employer 
                will employ on business days in the current calendar 
                year.
                    ``(C) Predecessors.--Any reference in this 
                subsection to an employer shall include a reference to 
                any predecessor of such employer.
    ``(d) Separate Application to Each Option Offered.--In the case of 
a group health plan that offers a participant or beneficiary two or 
more benefit package options under the plan, the requirements of this 
section shall be applied separately with respect to each such option.
    ``(e) Definitions.--For purposes of this section:
            ``(1) Treatment limitation.--The term `treatment 
        limitation' means, with respect to benefits under a group 
        health plan or health insurance coverage, any day or visit 
        limits imposed on coverage of benefits under the plan or 
        coverage during a period of time.
            ``(2) Financial requirement.--The term `financial 
        requirement' means, with respect to benefits under a group 
        health plan or health insurance coverage, any deductible, 
        coinsurance, or cost-sharing or an annual or lifetime dollar 
        limit imposed with respect to the benefits under the plan or 
        coverage.
            ``(3) Medical or surgical benefits.--The term `medical or 
        surgical benefits' means benefits with respect to medical or 
        surgical services, as defined under the terms of the plan or 
        coverage (as the case may be), but does not include substance 
        abuse treatment benefits.
            ``(4) Substance abuse treatment benefits.--The term 
        `substance abuse treatment benefits' means benefits with 
        respect to substance abuse treatment services.
            ``(5) Substance abuse treatment services.--The term 
        `substance abuse services' means any of the following items and 
        services provided for the treatment of substance abuse:
                    ``(A) Inpatient treatment, including 
                detoxification.
                    ``(B) Non-hospital residential treatment.
                    ``(C) Outpatient treatment, including screening and 
                assessment, medication management, individual, group, 
                and family counseling, and relapse prevention.
                    ``(D) Prevention services, including health 
                education and individual and group counseling to 
                encourage the reduction of risk factors for substance 
                abuse.
            ``(6) Substance abuse.--The term `substance abuse' includes 
        chemical dependency.''.
                    (B) Conforming amendment.--The table of contents 
                for chapter 100 of the Internal Revenue Code of 1986 is 
                amended by inserting after the item relating to section 
                9812 the following new item:

``Sec. 9813. Parity in the application of treatment limitations and 
                            financial requirements to substance abuse 
                            treatment benefits.''.
    (b) Individual Health Insurance.--
            (1) In general.--Part B of title XXVII of the Public Health 
        Service Act (42 U.S.C. 300gg-41 et seq.) is amended by 
        inserting after section 2752 the following:

``SEC. 2753. PARITY IN THE APPLICATION OF TREATMENT LIMITATIONS AND 
              FINANCIAL REQUIREMENTS TO SUBSTANCE ABUSE BENEFITS.

    ``(a) In General.--The provisions of section 2707 (other than 
subsection (e)) shall apply to health insurance coverage offered by a 
health insurance issuer in the individual market in the same manner as 
it applies to health insurance coverage offered by a health insurance 
issuer in connection with a group health plan in the small or large 
group market.
    ``(b) Notice.--A health insurance issuer under this part shall 
comply with the notice requirement under section 713(f) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
referred to in subsection (a) as if such section applied to such issuer 
and such issuer were a group health plan.''.
            (2) Conforming amendment.--Section 2762(b)(2) of the Public 
        Health Service Act (42 U.S.C. 300gg-62(b)(2)) is amended by 
        striking ``section 2751'' and inserting ``sections 2751 and 
        2753''.
    (c) Effective Dates.--
            (1) In general.--Subject to paragraph (3), the amendments 
        made by subsection (a) shall apply with respect to group health 
        plans for plan years beginning on or after January 1, 2002.
            (2) Individual market.--The amendments made by subsection 
        (b) shall apply with respect to health insurance coverage 
        offered, sold, issued, renewed, in effect, or operated in the 
        individual market on or after January 1, 2002.
            (3) Collective bargaining agreements.--In the case of a 
        group health plan maintained pursuant to 1 or more collective 
        bargaining agreements between employee representatives and 1 or 
        more employers ratified before the date of enactment of this 
        Act, the amendments made subsection (a) shall not apply to plan 
        years beginning before the later of--
                    (A) the date on which the last collective 
                bargaining agreements relating to the plan terminates 
                (determined without regard to any extension thereof 
                agreed to after the date of enactment of this Act), or
                    (B) January 1, 2002.
        For purposes of subparagraph (A), any plan amendment made 
        pursuant to a collective bargaining agreement relating to the 
        plan which amends the plan solely to conform to any requirement 
        added by subsection (a) shall not be treated as a termination 
        of such collective bargaining agreement.
    (d) Coordinated Regulations.--Section 104(1) of Health Insurance 
Portability and Accountability Act of 1996 is amended by striking 
``this subtitle (and the amendments made by this subtitle and section 
401)'' and inserting ``the provisions of part 7 of subtitle B of title 
I of the Employee Retirement Income Security Act of 1974, and the 
provisions of parts A and C of title XXVII of the Public Health Service 
Act, and chapter 1000 of the Internal Revenue Code of 1986''.

SEC. 3. PREEMPTION.

    Nothing in the amendments made by this Act shall be construed to 
preempt any provision of State law that provides protections to 
enrollees that are greater than the protections provided under such 
amendments.
                                 <all>