Liability for, enforcement of, and civil monetary penalties for parity violations

(a)

PHSA

(1)

In general

Section 2726(a) of the Public Health Service Act (42 U.S.C. 300gg–26(a)) is amended by adding at the end the following:

(9)

Service provider liability

In the case of a violation of this section by a group health plan or a health insurance issuer offering group or individual health insurance coverage—(A)a plan sponsor or a service provider, including any third-party administrator, managed behavioral health organization, or entity providing pharmacy benefit management services, of such plan or coverage that causes or contributes to such violation shall also be liable for such violation; and(B)the Secretary shall have the discretion to determine the percentage of liability of between the plan, issuer, sponsor, and service provider, as applicable.

(2)

Enforcement

Section 2723 of the Public Health Service Act (42 U.S.C. 300gg–22) is amended—(A)in subsection (a)—(i)in paragraph (1), by adding at the end the following: In the case of the requirements of subsection (a) of section 2726 with respect to parity in mental health and substance use disorder benefits, each State may require that plan sponsors or service providers, including any third-party administrator, managed behavioral health organization, or entity providing pharmacy benefit management services, of such coverage meet such requirements.; and(ii)in paragraph (2), by inserting , plan sponsors, or service providers, including any third-party administrator, managed behavioral health organization, or entity providing pharmacy benefit management services, after health insurance issuers; and(B)in subsection (b)(3)—(i) in the heading, by striking

genetic information

and inserting

genetic information and parity in mental health and substance use disorder benefits

; and(ii) in subparagraph (A), by striking any failure and all that follows through in connection with the plan. and inserting the following: “any failure of a health insurance issuer or a plan sponsor or any participation in such failure by a service provider, including any third-party administrator, managed behavioral health organization, or entity providing pharmacy benefit management services, in connection with a group health plan—

(i)to meet the requirements of subsection (a)(1)(F), (b)(3), (c), or (d) of section 2702 or section 2701 or 2702(b)(1) with respect to genetic information; or(ii)to meet the requirements of subsection (a) of section 2726 with respect to parity in mental health and substance use disorder benefits.

(b)

ERISA

(1)

In general

Section 712(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185a(a)) is amended by adding at the end the following:

(9)

Service provider liability

In the case of a violation of this section by a group health plan or a health insurance issuer offering group health insurance coverage—(A)a plan sponsor or a service provider, including any third-party administrator, managed behavioral health organization, or entity providing pharmacy benefit management services, of such plan or coverage that causes or contributes to such violation shall also be liable for such violation; and(B)the Secretary shall have the discretion to determine the percentage of liability of between the plan, issuer, sponsor, and service provider, as applicable.

(2)

Enforcement

Section 502 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132) is amended—(A)in subsection (a), by striking paragraph (6) and inserting the following:

(6)by the Secretary to collect any civil penalty under this section

;

(B)in subsection (b)(3)—(i)by striking subsections (c)(9) and (a)(6) and inserting subsections (c)(9), (c)(10), and (a)(6); and(ii)by striking under subsection (c)(9)) and inserting under subsections (c)(9) and (c)(10)), and except with respect to enforcement by the Secretary of section 712; and(C)in subsection (c)(10)—(i) in the heading, by striking

use of genetic information

and inserting

use of genetic information and parity in mental health and substance use disorder benefits

; and(ii) in subparagraph (A)—(I)by striking any plan sponsor of a group health plan and inserting any plan sponsor or service provider, including any third-party administrator, managed behavioral health organization, or entity providing pharmacy benefit management services, of a group health plan; and(II)by striking for any failure and all that follows through in connection with the plan. and inserting the following: “for any failure by such sponsor or issuer, or by participation in such failure by a service provider, in connection with the plan—

(i)to meet the requirements of subsection (a)(1)(F), (b)(3), (c), or (d) of section 702 or section 701 or 702(b)(1) with respect to genetic information; or(ii)to meet the requirements of subsection (a) of section 712 with respect to parity in mental health and substance use disorder benefits.

(c)

IRC

(1)

In general

Section 9812(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following:

(9)

Service provider liability

In the case of a violation of this section by a group health plan—(A)a plan sponsor or a service provider, including any third-party administrator, managed behavioral health organization, or entity providing pharmacy benefit management services, of such plan that causes or contributes to such violation shall also be liable for such violation; and(B)the Secretary shall have the discretion to determine the percentage of liability of between the plan, sponsor, and service provider, as applicable.

(2)

Enforcement

Section 4980D of such Code is amended by adding at the end the following new subsection:

(g)

Application to service providers

In the case of a failure of a group health plan to meet the requirements of section 9812, any reference in this section to such group health plan (and the reference in subsection (e)(1) to the employer) shall be treated as including a reference to any person made liable for such failure by section 9812(a)(9).

(d)

Effective date

The amendments made by this section (other than the amendments made by subparagraphs (A) and (B) of subsection (b)(2)) shall apply with respect to plan years beginning after the date that is 1 year after the date of enactment of this Act.