[Congressional Record Volume 143, Number 115 (Thursday, September 4, 1997)]
[Senate]
[Pages S8823-S8827]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WELLSTONE:
  S. 1147. 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; 
to the Committee on Labor and Human Resources.


            the substance abuse treatment parity act of 1997

  Mr. WELLSTONE. Mr. President, today I rise to introduce legislation 
that will ensure that private health insurance companies pay for 
substance abuse treatment services at the same level that they pay for 
treatment for other diseases. In other words, it is meant to guarantee 
that insurance coverage for substance abuse treatment is provided in a 
nondiscriminatory manner. This bill, the Substance Abuse Parity Act of 
1997, provides this assurance.

  For too long, the problem of substance abuse has been viewed as a 
moral issue, rather than a disease. A cloak of secrecy has surrounded 
this problem, as people who have this disease are often ashamed and 
afraid to admit their problem, for fear that they will be seen as 
admitting a weakness in character. We have all seen portrayals of 
alcoholics and addicts that are intended to be humorous or derogatory, 
and only reinforce the biases against people who have problems with 
substance abuse. Can you imagine this type of portrayal of someone who 
has a cardiac problem, or who happens to carry a gene that predisposes 
them to diabetes?
  Yet it has been shown that some forms of addiction have a genetic 
basis, and we still try to hide the seriousness of this problem. We 
forget that someone who has a problem with drugs or alcohol can look 
just like the person we see in the mirror, or the person who is sitting 
next to us on a plane. In fact, it is unlikely that any of us have not 
experienced substance abuse within our families or our circle of 
friends.
  The statistics concerning substance abuse are startling. In a recent 
article in Scientific American, December 1996, it was reported that 
excessive alcohol consumption is estimated to cause more than 100,000 
deaths in the United States each year. Of these deaths, 24 percent are 
due to drunken driving, 11 percent are homicides, and 8 percent are 
suicides. Alcohol contributes to cancers of the esophagus, larynx, and 
oral cavity, which account for 17 percent of the deaths. Strokes 
related to alcohol use account for another nine percent of deaths. 
Alcohol causes several other ailments such as cirrhosis of the liver. 
These ailments account for 18 percent of the deaths.
  We know that alcohol and other drugs contribute to other problems as 
well. Addictive substances have the potential for destroying the person 
who is addicted, their family and their other relationships. In a 1993 
Report to Congress on Alcohol and Health, the Secretary of Health and 
Human Services

[[Page S8824]]

stated that ``Alcohol is associated with a substantial proportion of 
human violence, and perpetrators are often under the influence of 
alcohol.'' There are high rates of alcohol and other drug involvement 
in domestic violence and child abuse. For example, in 1987, 64 percent 
of all reported child abuse and neglect cases in the city of New York 
were related to alcohol and other drug abuse. With respect to domestic 
violence, a study of over 2,000 American couples demonstrated that 
rates of domestic violence were almost 15 times higher in households 
where husbands were often drunk as compared to those households in 
which they were never drunk. And, alcohol has been shown to be present 
in over 50 percent of all incidents of domestic violence. In addition, 
substance use itself may result from direct experience with 
interpersonal violence, as demonstrated by a study of 472 women. This 
study showed that 87 percent of alcoholic women had been physically or 
sexually abused as children as compared to 59 percent of the 
nonalcoholic women in the study. We know that over 40 percent of motor 
vehicle crash fatalities are alcohol-related, and that many of the 
alcohol drinkers involved in these crashes have had long standing 
problems with alcohol abuse. It is estimated that over 25 percent of 
emergency department visits may be alcohol related, and that alcohol 
and other drug use accounts for at least 40 percent of hospital 
admissions.
  Data from the 1996 National Household Survey on Drug Abuse, which is 
conducted by the Substance Abuse and Mental Health Services 
Administration, provide the following estimates of substance use in the 
United States:


                                Alcohol

  There were about 9 million current alcohol, including beer, wine, and 
distilled spirits, drinkers under age 21 in 1996. Of these, 4.4 million 
were binge drinkers, including 1.9 million heavy drinkers.


                               Marijuana

  In 1996, an estimated 10.1 million Americans were current, past 
month, marijuana or hashish users. This represents 4.7 percent of the 
population aged 12 and older.
  Marijuana is by far the most prevalent drug used by illicit drug 
users. Approximately three-quarters, 77 percent of current illicit drug 
users were marijuana or hashish users in 1996.


                                Cocaine

  The number of occasional cocaine users, people who used in the past 
year but on fewer than 12 days, was 2.6 million in 1996, similar to 
what it was in 1995. The number of users was down significantly from 
1985, when it was 7.1 million.


                             Hallucinogens

  The rate of current use of hallucinogens among youth age 12-17 has 
nearly doubled in 2 years, 1.1 percent in 1994, 1.7 percent in 1995, 
and 2.0 percent in 1996.


                                 Heroin

  There were an estimated 141,000 new heroin users in 1995, and there 
has been an increasing trend in new heroin use since 1992. A large 
proportion of these recent new users were smoking, snorting, or 
sniffing heroin, and most were under age 26. The rate of heroin 
initiation for the age group 12-17 reached historic levels.
  We know what the problems are, and we can document them. But we have 
done little to treat the problems or prevent them. In order to decrease 
the violence, the domestic violence, child abuse, homicide, suicide, 
the motor vehicle crashes, the cancers and the other illnesses and 
deaths due to alcohol and drug use, we must treat the alcohol and drug 
abuse problems. But right now, even if treatment is available and 
accessible, it is often unaffordable, as many health plans do not pay 
for treatment for substance abuse at the same rate at which they pay 
for treatment of other diseases. This seems counterintuitive, given the 
relationship between substance use and other diseases. It would only 
seem logical that if we are willing to pay for the treatment of 
substance abuse, we would decrease costs of treatment for other 
diseases in the long run, as we would decrease the occurrence of those 
diseases that are related to substance abuse.
  SAMHSA has summarized the importance of substance abuse treatment as 
follows:

       Substance abuse adds substantially to the nation's total 
     health care bill. Numerous studies show that providing 
     adequate and accessible treatment for those with alcohol and 
     illicit drug problems is the most effective method to improve 
     the health of drug abusers and relieve the growing burden of 
     drug-related health care costs. Treatment is a sound, long-
     term and cost-effective investment in America's future.


                 Substance Abuse and Health Care Costs

       Approximately 35 percent of all AIDS cases are related to 
     intravenous drug use, and over 60 percent of all pediatric 
     AIDS cases are related to maternal exposure to HIV through 
     drug use or sex with a drug user.
       On the average, untreated alcoholics generally incur 
     general health care costs that are at least 100 percent 
     higher than those of the non-alcoholic. In the last 12 months 
     before treatment, the alcoholic's costs are close to 300 
     percent higher.
       More than 5 percent (221,000) of the 4 million women who 
     give birth each year use illicit drugs during their 
     pregnancy.
       The Health Insurance Association of America estimates an 
     expenditure of from $48,000 to $150,000 in costs of maternity 
     care, physicians' fees and hospital charges for each delivery 
     that is complicated by substance abuse.
       The number of methamphetamine (speed)-related emergency 
     room episodes increased by 35 percent (from 7,800 to 10,600) 
     between the first half of 1994 and the first half of 1995.


                       Health Care and Treatment

       Chicago's Women's Treatment Center offers a wide variety of 
     residential and outpatient programs for adolescent girls, 
     pregnant women and women with young children. The Center has 
     the only crisis nursery in Chicago, which provides care 24 
     hours a day to the infants and children of women undergoing 
     medically supervised detoxification. As a result of the 
     Women's Treatment Center's focus on responsible parenting, 67 
     drug-free babies have been born to women in treatment.
       Substance abuse treatment reduces overall hospital 
     admission rates by at least 38 percent. Hospital admissions 
     for drug overdose decreased by 58 percent among those who had 
     been treated.
       Ninety-five percent of women reported uncomplicated births, 
     free of illicit drugs, after one year of treatment.
       The state Alcohol and Other Drug Authority in Minnesota has 
     reported that, for chemical dependency clients, the state has 
     saved approximately $22 million in annual health care costs 
     by providing treatment.

  So, it is apparent from these data that substance abuse treatment 
works, and can help reduce health care costs and costs to society. We 
need to ensure that health care insurance providers do not discriminate 
in their coverage of substance abuse treatment services.
  The Substance Abuse Treatment Parity Act of 1997 provides for 
nondiscriminatory coverage of substance abuse treatment services by 
private health insurers. It does not require that substance abuse 
benefits be part of a health benefits package, but establishes a 
requirement for parity in coverage for those plans that offer substance 
abuse coverage.
  Mr. President, my bill would prohibit private insurance providers 
from imposing caps, copayments, and deductibles and day and visit 
limits for substance abuse treatment services that differ from those 
that are described for other covered illnesses. In other words, private 
health insurers must treat substance abuse like any other disease. 
Covered services include inpatient treatment, including detoxification; 
nonhospital residential treatment; outpatient treatment, including 
screening and assessment, medication management, individual, group and 
family counseling and relapse prevention; and prevention services, 
including health education and individual and group counseling to 
encourage the reduction of risk factors for substance abuse.
  Mr. President, the Substance Abuse Treatment Parity Act of 1997 is 
designed to take a large step toward decreasing the problem of 
substance abuse and its consequences. We can't afford not to provide 
this coverage.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1147

       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 ``Substance Abuse Treatment 
     Parity Act of 1997''.

     SEC. 2. PARITY IN SUBSTANCE ABUSE TREATMENT BENEFITS.

       (a) Group Health Plans.--
       (1) Public health service act amendments.--(A) Subpart 2 of 
     part A of title XXVII of the Public Health Service Act (as 
     added by section 604(a) of the Newborns' and Mothers' Health 
     Protection Act of 1996 and

[[Page S8825]]

     amended by section 703(a) of the Mental Health Parity Act of 
     1996) is amended by adding at the end the following new 
     section:

     ``SEC. 2706. 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) Exemptions.--
       ``(1) Small employer exemption.--
       ``(A) 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.
       ``(B) Small employer.--For purposes of subparagraph (A), 
     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 50 employees on business days during the preceding 
     calendar year and who employs at least 2 employees on the 
     first day of the plan year.
       ``(C) Application of certain rules in determination of 
     employer size.--For purposes of this paragraph--
       ``(i) 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.
       ``(ii) 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.
       ``(iii) Predecessors.--Any reference in this paragraph to 
     an employer shall include a reference to any predecessor of 
     such employer.
       ``(2) Increased cost exemption.--This section shall not 
     apply with respect to a group health plan (or health 
     insurance coverage offered in connection with a group health 
     plan) if the application of this section to such plan (or to 
     such coverage) results in an increase in the cost under the 
     plan (or for such coverage) of at least 1 percent.
       ``(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.
       ``(g) Sunset.--This section shall not apply to benefits for 
     services furnished on or after September 30, 2002.''.
       (B) Section 2723(c) of such Act (42 U.S.C. 300gg-23(c)), as 
     amended by section 604(b)(2) of Public Law 104-204, is 
     amended by striking ``section 2704'' and inserting ``sections 
     2704 and 2706''.
       (2) ERISA amendments.--(A) Subpart B of part 7 of subtitle 
     B of title I of the Employee Retirement Income Security Act 
     of 1974 (as added by section 603(a) of the Newborns' and 
     Mothers' Health Protection Act of 1996 and amended by section 
     702(a) of the Mental Health Parity Act of 1996) is amended by 
     adding at the end the following new section:

     ``SEC. 713. 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) Exemptions.--
       ``(1) Small employer exemption.--
       ``(A) 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.
       ``(B) Small employer.--For purposes of subparagraph (A), 
     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 50 employees on business days during the preceding 
     calendar year and who employs at least 2 employees on the 
     first day of the plan year.
       ``(C) Application of certain rules in determination of 
     employer size.--For purposes of this paragraph--
       ``(i) 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.
       ``(ii) 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.
       ``(iii) Predecessors.--Any reference in this paragraph to 
     an employer shall include a reference to any predecessor of 
     such employer.
       ``(2) Increased cost exemption.--This section shall not 
     apply with respect to a group health plan (or health 
     insurance coverage offered in connection with a group health 
     plan) if the application of this section to such plan (or to 
     such coverage) results in an increase in the cost under the 
     plan (or for such coverage) of at least 1 percent.
       ``(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.

[[Page S8826]]

       ``(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.
       ``(g) Sunset.--This section shall not apply to benefits for 
     services furnished on or after September 30, 2002.''.
       (B) Section 731(c) of such Act (29 U.S.C. 1191(c)), as 
     amended by section 603(b)(1) of Public Law 104-204, is 
     amended by striking ``section 711'' and inserting ``sections 
     711 and 713''.
       (C) Section 732(a) of such Act (29 U.S.C. 1191a(a)), as 
     amended by section 603(b)(2) of Public Law 104-204, is 
     amended by striking ``section 711'' and inserting ``sections 
     711 and 713''.
       (D) The table of contents in section 1 of such Act is 
     amended by inserting after the item relating to section 712 
     the following new item:

``Sec. 713. Parity in the application of treatment limitations and 
              financial requirements to substance abuse treatment 
              benefits.''.

       (3) Internal revenue code amendments.--(A) Subtitle K of 
     the Internal Revenue Code of 1986 (as added by section 401(a) 
     of the Health Insurance Portability and Accountability Act of 
     1996) is amended--
       (i) by striking all that precedes section 9801 and 
     inserting the following:
              ``Subtitle K--Group Health Plan Requirements
``Chapter 100. Group health plan requirements.

             ``CHAPTER 100--GROUP HEALTH PLAN REQUIREMENTS

``Subchapter A. Requirements relating to portability, access, and 
              renewability.
``Subchapter B. Other requirements.
``Subchapter C. General provisions.

   ``Subchapter A--Requirements Relating to Portability, Access, and 
                              Renewability

``Sec. 9801. Increased portability through limitation on preexisting 
              condition exclusions.
``Sec. 9802. Prohibiting discrimination against individual participants 
              and beneficiaries based on health status.
``Sec. 9803. Guaranteed renewability in multiemployer plans and certain 
              multiple employer welfare arrangements.'',
       (ii) by redesignating sections 9804, 9805, and 9806 as 
     sections 9831, 9832, and 9833, respectively,
       (iii) by inserting before section 9831 (as so redesignated) 
     the following:

                   ``Subchapter C--General Provisions

``Sec. 9831. General exceptions.
``Sec. 9832. Definitions.
``Sec. 9833. Regulations.'', and
       (iv) by inserting after section 9803 the following:

                   ``Subchapter B--Other Requirements

``Sec. 9811. Parity in the application of treatment limitations and 
              financial requirements to substance abuse treatment 
              benefits.

     ``SEC. 9811. 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) Exemptions.--
       ``(1) Small employer exemption.--
       ``(A) 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.
       ``(B) Small employer.--For purposes of subparagraph (A), 
     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 50 employees on business days during the preceding 
     calendar year and who employs at least 2 employees on the 
     first day of the plan year.
       ``(C) Application of certain rules in determination of 
     employer size.--For purposes of this paragraph--
       ``(i) 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.
       ``(ii) 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.
       ``(iii) Predecessors.--Any reference in this paragraph to 
     an employer shall include a reference to any predecessor of 
     such employer.
       ``(2) Increased cost exemption.--This section shall not 
     apply with respect to a group health plan (or health 
     insurance coverage offered in connection with a group health 
     plan) if the application of this section to such plan (or to 
     such coverage) results in an increase in the cost under the 
     plan (or for such coverage) of at least 1 percent.
       ``(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) Sunset.--This section shall not apply to benefits for 
     services furnished on or after September 30, 2002.''.
       (B) Conforming Amendments.--
       (i) Chapter 100 of such Code (as added by section 401 of 
     the Health Insurance Portability and Accountability Act of 
     1996 and as previously amended by this section) is further 
     amended--
       (I) in the last sentence of section 9801(c)(1), by striking 
     ``section 9805(c)'' and inserting ``section 9832(c)'';
       (II) in section 9831(b), by striking ``9805(c)(1)'' and 
     inserting ``9832(c)(1)'';
       (III) in section 9831(c)(1), by striking ``9805(c)(2)'' and 
     inserting ``9832(c)(2)'';
       (IV) in section 9831(c)(2), by striking ``9805(c)(3)'' and 
     inserting ``9832(c)(3)''; and
       (V) in section 9831(c)(3), by striking ``9805(c)(4)'' and 
     inserting ``9832(c)(4)''.
       (ii) Section 4980D of such Code (as added by section 402 of 
     the Health Insurance Portability and Accountability Act of 
     1996) is amended--
       (I) in subsection (c)(3)(B)(i)(I), by striking 
     ``9805(d)(3)'' and inserting ``9832(d)(3)'';
       (II) in subsection (d)(1), by inserting ``(other than a 
     failure attributable to section 9811)'' after ``on any 
     failure'';
       (III) in subsection (d)(3), by striking ``9805'' and 
     inserting ``9832'';
       (IV) in subsection (f)(1), by striking ``9805(a)'' and 
     inserting ``9832(a)''.
       (iii) The table of subtitles for such Code is amended by 
     striking the item relating to subtitle K (as added by section 
     401(b) of the Health Insurance Portability and Accountability 
     Act of 1996) and inserting the following new item:

``Subtitle K. Group health plan requirements.''

       (b) Individual Health Insurance.--(1) Part B of title XXVII 
     of the Public Health Service Act (as added by section 605(a) 
     of the Newborn's and Mother's Health Protection

[[Page S8827]]

     Act of 1996) is amended by inserting after section 2751 the 
     following new section:

     ``SEC. 2752. PARITY IN THE APPLICATION OF TREATMENT 
                   LIMITATIONS AND FINANCIAL REQUIREMENTS TO 
                   SUBSTANCE ABUSE BENEFITS.

       ``(a) In General.--The provisions of section 2706 (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) Section 2762(b)(2) of such Act (42 U.S.C. 300gg-
     62(b)(2)), as added by section 605(b)(3)(B) of Public Law 
     104-204, is amended by striking ``section 2751'' and 
     inserting ``sections 2751 and 2752''.
       (c) Effective Dates.--(1) 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, 1999.
       (2) The amendment 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 such date.
       (3) 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, 1999.

     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''.
                                 ______