[Congressional Record Volume 145, Number 108 (Wednesday, July 28, 1999)]
[Senate]
[Pages S9529-S9533]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WELLSTONE (for himself, Mr. Kennedy, Mr. Inouye, Mr. 
        Daschle, and Mr. Moynihan):
  S. 1447. 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 service under private group and individual health coverage; 
to the Committee on Health, Education, Labor, and Pensions.


 fairness in treatment--the drug and alcohol addiction recovery act of 
                                  1999

 Mr. WELLSTONE. Mr. President, I rise today to introduce 
legislation that will ensure that private health insurance companies 
cover the costs for drug and alcohol addiction treatment services at 
the same level that they pay for treatment for other diseases. The 
purpose of this bill is to end discrimination in insurance coverage for 
drug and alcohol addiction treatment. This bill, entitled Fairness in 
Treatment: The Drug and Alcohol Addiction Recovery Act of 1999, offers 
the necessary provisions to provide this assurance.
  For too long, the problem of drug and alcohol addiction has been 
viewed as a moral issue, rather than as a disease. Too often, a cloak 
of secrecy has surrounded this problem, causing people who have this 
disease to feel ashamed and afraid to seek treatment for their symptoms 
for fear that they will be seen as admitting to a moral failure, or 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 drug and 
alcohol addiction. I cannot imagine this type of portrayal of someone 
who has another kind of chronic illness, a heart problem, or who 
happens to carry a gene that predisposes them to diabetes.

[[Page S9530]]

  It has been shown that some forms of addiction have a genetic basis, 
and yet we still try to deny the serious medical nature of this 
disease. We think of those with this disease as somehow different from 
us. 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 at work or on the subway, or like someone in our own 
family. In fact, it is likely that most of us know someone who has 
experienced drug and alcohol addiction, within our families or our 
circle of friends or coworkers.
  Alcoholism and drug addiction are painful, private struggles with 
staggering public costs. A study prepared by The Lewin Group for the 
National Institute on Drug Abuse and the National Institute on Alcohol 
Abuse and Alcoholism, estimated that the total economic cost of alcohol 
and drug abuse to be $246 billion for 1992. Of this cost, $98 billion 
was due to drug addiction to illicit drugs and other drugs taken for 
non-medical purposes. This estimate includes addiction treatment and 
prevention costs, as well as costs associated with related illnesses, 
reduced job productivity or lost earnings, and other costs to society 
such as crime and social welfare programs. The study also determined 
that these costs are borne primarily by governments (46 percent), 
followed by those who abuse drugs and members of their households (44 
percent). According to this same study, private health and life 
insurance companies bear only 3.2 percent of the costs of drug abuse 
and 10.2 percent of the costs of alcohol abuse.
  The health effects resulting from alcohol addiction can be very 
serious, even fatal. A 1996 article in Scientific American estimated 
that excessive alcohol consumption causes more than 100,000 deaths in 
the U.S. each year. Of these deaths, twenty-four per cent are due to 
drunken driving, eleven percent are homicides, and eight percent are 
suicides. Alcohol contributes to cancers of the esophagus, larynx, and 
oral cavity, which account for seventeen percent of these 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 eighteen percent of the deaths.
  We know that addiction to 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. We know, for example, that fetal alcohol syndrome is the 
leading known cause of mental retardation. If the woman who was 
addicted to alcohol could receive proper treatment, fetal alcohol 
syndrome for her baby would be 100 percent preventable, and more than 
12,000 infants born in the U.S. each year would not suffer from fetal 
alcohol syndrome, with its irreversible physical and mental damage. We 
know too of the devastation caused by addiction when violence between 
people is one of the consequences. A 1998 SAMHSA report outlined the 
links between domestic violence and substance abuse. We know from 
clinical reports that 25-50% of men who commit acts of domestic 
violence also have substance abuse problems. The report recognized the 
link between the victim of abuse and use of alcohol and drugs, and 
recommended that after the woman's safety has been addressed, the next 
step would be to help with providing treatment for her addiction as a 
step toward independence and health, and toward the prevention of the 
consequences for the children who suffer the same abuse either 
directly, or indirectly by witnessing spousal violence.
  People who have the disease of addiction can be found throughout our 
society. According to the 1997 National Household Survey on Drug Abuse 
published by SAMHSA, nearly 73 percent of all illegal drug users in the 
United States are employed. This number represents 6.7 million full-
time workers and 1.6 million part-time workers. Although many of these 
workers could and should have insurance benefits that would cover 
treatment for this disease, they do not.
  In addition to the health problems resulting from the failure to 
treat the illness, there are other serious consequences affecting the 
workplace, such as lost productivity, high employee turnover, low 
employee morale, mistakes, accidents, and increased worker's 
compensation insurance and health insurance premiums--all results of 
untreated addiction problems. Whether you are a corporate CEO or a 
small business owner, there are simple, effective steps that can be 
taken--including providing insurance coverage for this disease, ready 
access to treatment, and workplace policies that support treatment--
that can reduce these human and economic costs.
  We know from the outstanding research conducted at NIH, through the 
National Institute on Drug Abuse and the National Institute on Alcohol 
Abuse and Alcoholism, that treatment for drug and alcohol addiction can 
be effective. That is the major finding from a NIDA-sponsored 
nationwide study of drug abuse treatment outcomes. The Drug Abuse 
Treatment Outcome Study (DATOS) tracked 10,000 people in nearly 100 
treatment programs in 11 cities who entered treatment for addiction 
between 1991 and 1993. Results showed that for all four treatment types 
studied, there were reductions in the use of cocaine, heroin, and 
marijuana after treatment. Moreover, treatment resulted in other 
positive changes in behavior, such as fewer psychological symptoms and 
increased work productivity.
  We must do more to prevent this illness and to treat those who are 
addicted to drugs and alcohol. Over the past few years, the principle 
of parity in insurance coverage for alcohol and drug rehabilitation and 
treatment has received the strong support of the White House, ONDCP 
Director General Barry McCaffrey, Former Surgeon General C. Everett 
Koop, Former President and Mrs. Gerald Ford, the U.S. Conference of 
Mayors, Kaiser Permanente Health Plans, and many leading figures in 
medicine, business, government, journalism, and entertainment who have 
successfully fought the battle of addiction with the help of treatment. 
Hearings held last year by the Senate Appropriations Committee and the 
Committee on Health, Education, Labor, and Pensions highlighted the 
recent major advances in scientific information about the disease; the 
biological causes of addiction; the effectiveness and low cost of 
treatment; and many painful, personal stories of people, including 
children, who have been denied treatment.
  We know that the failure of insurance companies to provide treatment 
can sometimes have devastating results. The New York Times recently 
highlighted the tragic suicide of a young man who desperately sought 
inpatient treatment care for his drug addiction and fought for 8 months 
to have the plan authorize the treatment that was in fact included in 
as part of his benefits. The authorization came through--but too late--
he had died three weeks earlier from a drug overdose. This kind of 
denial of care for addiction treatment is not at all unique--the 1998 
Hay Group Report on Employer Health Care Dollars Spent on Substance 
Abuse showed that from 1988 through 1998 the value of substance abuse 
treatment benefits decreased by 74.5%, as compared to a 11.5% decrease 
for overall health care benefits.
  Addiction to alcohol and drugs is a disease that affects the brain, 
the body, and the spirit. We must provide adequate opportunities for 
the treatment of addiction in order to help those who are suffering and 
to prevent the health and social problems that it causes. This 
legislation will take an important step in this direction by requiring 
that health insurance plans eliminate discrimination for addiction 
treatment. The costs for this are very low. A 1999 study by the Rand 
Corporation found that the cost to managed care health plans is now 
only about $5 per person per year for unlimited substance abuse 
treatment benefits to employees of big companies. A 1997 Milliman and 
Robertson study found that complete substance abuse treatment parity 
would increase per capita health insurance premiums by only one half of 
one percent, or less than $1 per member per month--without even 
considering any of the obvious savings that will result from treatment. 
Several studies have shown that for every $1 spent on treatment, more 
than $7 is saved in other health care expenses, and that these savings 
are in addition to the financial and other benefits of increased 
productivity, as well as participation in family and community life. 
Providing

[[Page S9531]]

treatment for addiction also saves millions of dollars in the criminal 
justice system. But for treatment to be effective and helpful 
throughout our society all systems of care--including private insurance 
plans--must share this responsibility.
  This legislation does not mandate that health insurers offer 
substance addiction treatment benefits. What it does is prohibit 
discrimination by health plans who offer substance addiction treatment 
from placing unfair and life-threatening limitations on caps, access, 
or financial requirements for addiction treatment that are different 
from other medical and surgical services.
  We must move forward now to vigorously address the serious and life-
threatening problem of drug and alcohol addiction in our country. It is 
long past time that insurance companies do their fair share in bearing 
the responsibility for treating this disease.
  I ask that the full text of the bill be printed in the Record.
  The bill follows:

                                S. 1447

       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 1999''.

     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.

[[Page S9532]]

       ``(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, 
     2000.
       (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, 2000.
       (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, 2000.
     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

[[Page S9533]]

     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.
                                 ______