[House Report 118-260]
[From the U.S. Government Publishing Office]


118th Congress    }                                      {      Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                      {     118-260

======================================================================



 
    HEALTH DATA ACCESS, TRANSPARENCY, AND AFFORDABILITY ACT OF 2023

                                _______
                                

November 1, 2023.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Ms. Foxx, from the Committee on Education and the Workforce, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 4527]

    The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 4527) to amend the Employee Retirement 
Income Security Act of 1974 to ensure plan fiduciaries may 
access de-identified information relating to health claims, and 
for other purposes, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Health Data Access, Transparency, and 
Affordability Act of 2023'' or the ``Health DATA Act of 2023''.

SEC. 2. PLAN FIDUCIARY ACCESS TO INFORMATION.

  (a) In General.--Paragraph (2) of section 408(b) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)) is amended 
by adding at the end the following new subparagraph:
          ``(C) No contract or arrangement for services between a group 
        health plan and any other entity, such as a health care 
        provider, network or association of providers, third-party 
        administrator, or pharmacy benefit manager, is reasonable 
        within the meaning of this paragraph unless such contract or 
        agreement--
                  ``(i) allows the responsible plan fiduciary to audit 
                all de-identified claims and encounter information or 
                data described in section 724(a)(1)(B) to--
                          ``(I) ensure that such entity complies with 
                        the terms of the plan and any applicable law; 
                        and
                          ``(II) determine the reasonableness of 
                        compensation paid by the plan; and
                  ``(ii) does not--
                          ``(I) unreasonably limit the number of audits 
                        permitted during a given period of time;
                          ``(II) limit the number of de-identified 
                        claims and encounter information or data that 
                        the responsible plan fiduciary may access 
                        during an audit;
                          ``(III) limit the disclosure of pricing terms 
                        for value based payment arrangements, 
                        including--
                                  ``(aa) payment calculations and 
                                formulas;
                                  ``(bb) quality measures;
                                  ``(cc) contract terms;
                                  ``(dd) payment amounts;
                                  ``(ee) measurement periods for all 
                                incentives; and
                                  ``(ff) other payment methodologies 
                                furnished by a health care provider, 
                                network or association of providers, 
                                third-party administrator, or pharmacy 
                                benefit manager;
                          ``(IV) limit the disclosure of overpayments 
                        and overpayment recovery terms;
                          ``(V) limit the right of the responsible plan 
                        fiduciary to select an auditor;
                          ``(VI) otherwise limit or unduly delay by 
                        greater than 60 days the responsible plan 
                        fiduciary from auditing such information or 
                        data; or
                          ``(VII) charge a fee beyond the reasonable 
                        direct costs to administer the operation of 
                        conducting such audits.''.
  (b) Civil Enforcement.--
          (1) In general.--Subsection (c) of section 502 of such Act 
        (29 U.S.C. 1132) is amended by adding at the end the following 
        new paragraph:
  ``(13) In the case of an agreement between a group health plan and a 
health care provider, network or association of providers, third-party 
administrator, pharmacy benefit manager, or other service provider that 
violates the provisions of section 724, the Secretary may assess a 
civil penalty against such provider, network or association, third-
party administrator, pharmacy benefit manager, or other service 
provider in the amount of $10,000 for each day during which such 
violation continues. Such penalty shall be in addition to other 
penalties as may be prescribed by law.''.
          (2) Conforming amendment.--Paragraph (6) of section 502(a) of 
        such Act is amended by striking ``or (9)'' and inserting ``(9), 
        or (13)''; and
  (c) Existing Provisions Void.--Section 410 of such Act is amended by 
adding at the end the following new subsection:
  ``(c) Any provision in an agreement or instrument shall be void as 
against public policy if such provision--
          ``(1) unduly delays or limits a plan fiduciary from accessing 
        the de-identified claims and encounter information or data 
        described in section 724(a)(1)(B); or
          ``(2) violates the requirements of section 408(b)(2)(C).''.
  (d) Technical Amendment.--Clause (i) of section 408(b)(2)(B) of such 
Act is amended by striking ``this clause'' and inserting ``this 
paragraph''.

SEC. 3. UPDATED ATTESTATION FOR PRICE AND QUALITY INFORMATION.

  Section 724(a)(3) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1185m(a)(3)) is amended to read as follows:
          ``(3) Attestation.--
                  ``(A) In general.--Subject to subparagraph (C), the 
                fiduciary of a group health plan or issuer offering 
                group health insurance coverage shall annually submit 
                to the Secretary an attestation that such plan or 
                issuer of such coverage is in compliance with the 
                requirements of this subsection. Such attestation shall 
                also include a statement verifying that--
                          ``(i) the information or data described under 
                        subparagraphs (A) and (B) of paragraph (1) is 
                        available upon request and provided to the plan 
                        fiduciary, the plan administrator, or the 
                        issuer in a timely manner; and
                          ``(ii) there are no terms in the agreement 
                        under such paragraph (1) that directly or 
                        indirectly restrict or unduly delay a plan 
                        fiduciary, the plan administrator, or the 
                        issuer from auditing, reviewing, or otherwise 
                        accessing such information.
                  ``(B) Limitation on submission.--Subject to clause 
                (ii), a group health plan or issuer offering group 
                health insurance coverage may not enter into an 
                agreement with a third-party administrator or other 
                service provider to submit the attestation required 
                under subparagraph (A).
                  ``(C) Exception.--In the case of a group health plan 
                or issuer offering group health insurance coverage that 
                is unable to obtain the information or data needed to 
                submit the attestation required under subparagraph (A), 
                such plan or issuer may submit a written statement in 
                lieu of such attestation that includes--
                          ``(i) an explanation of why such plan or 
                        issuer was unsuccessful in obtaining such 
                        information or data, including whether such 
                        plan or issuer was limited or prevented from 
                        auditing, reviewing, or otherwise accessing 
                        such information or data;
                          ``(ii) a description of the efforts made by 
                        the plan fiduciary to remove any gag clause 
                        provisions from the agreement under paragraph 
                        (1); and
                          ``(iii) a description of any response by the 
                        third-party administrator or other service 
                        provider with respect to efforts to comply with 
                        the attestation requirement under subparagraph 
                        (A).''.

SEC. 4. STUDY ON PLAN ASSETS.

  Not later than 1 year after the date of enactment of this Act, the 
Secretary of Labor shall submit to the Committee on Education and the 
Workforce of the House of Representatives a report on the status of de-
identified claims and encounter information or data described in 
section 724(a)(1)(B) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1185m), including information on the following:
          (1) Circumstances under current law where such information or 
        data could be deemed a group health plan asset (as defined 
        under section 3(42) of such Act).
          (2) Whether restrictions on the ability of a plan fiduciary 
        to access such information or data violates a requirement of 
        current law.
          (3) The existing regulatory authority of the Secretary to 
        clarify whether such information or data belongs to a group 
        health plan, rather than a service provider.
          (4) Legislative actions that may be taken to establish that 
        such information or data related to a plan belongs to a group 
        health plan and is handled in the best interests of plan 
        participants and beneficiaries.

                                Purpose

    H.R. 4527, the Health Data Access, Transparency, and 
Affordability Act of 2023 (Health DATA Act of 2023), amends the 
Employee Retirement Income Security Act of 1974 (ERISA)\1\ to 
strengthen existing provisions of law to ensure that group 
health plan fiduciaries may audit plan data held by their 
service providers for purposes of (1) ensuring compliance with 
the terms of the plan and any applicable law and (2) 
determining the reasonableness of compensation paid by the 
plan. By providing transparent access to this information, the 
bill will help plan fiduciaries perform necessary oversight of 
service providers on behalf of plan participants and 
beneficiaries.
---------------------------------------------------------------------------
    \1\29 U.S.C. Sec. 1001 et seq.
---------------------------------------------------------------------------

                            Committee Action


                             116TH CONGRESS

Subcommittee Hearing on Examining Surprise Billing: Protecting Patients 
        from Financial Pain

    On April 2, 2019, the Subcommittee on Health, Employment, 
Labor, and Pensions (HELP) held a hearing entitled ``Examining 
Surprise Billing: Protecting Patients from Financial Pain,'' 
which discussed hospital billing practices, including 
unexpected costs to consumers due, in part, to a lack of 
transparency in health care. Members and witnesses also 
discussed the need for more transparency in employer-sponsored 
plans to ensure plans can make informed decisions. The 
witnesses were Ms. Ilyse Schuman, Senior Vice President, Health 
Policy, American Benefits Council, Washington, D.C.; Dr. Jack 
Hoadley, Research Professor Emeritus, Health Policy Institute, 
Georgetown University Health Policy Institute, McCourt School 
of Public Policy, McLean, Virginia; Mr. Frederick Isasi, 
Executive Director, Families USA, Washington, D.C.; and Ms. 
Christen Linke Young, Fellow, USC-Brookings Schaeffer 
Initiative on Health Policy, Washington, D.C.

Subcommittee Hearing on Making Health Care More Affordable: Lowering 
        Drug Prices and Increasing Transparency

    On September 26, 2019, the HELP Subcommittee held a hearing 
entitled ``Making Health Care More Affordable: Lowering Drug 
Prices and Increasing Transparency,'' which examined the impact 
of rising prescription drug prices on workers and businesses 
and the need for greater transparency. Members and witnesses 
discussed how information on Pharmacy Benefit Managers' (PBMs) 
price negotiations with drug manufacturers are not provided to 
consumers. The witnesses were Mr. Frederick Isasi, Executive 
Director, Families USA, Washington, D.C.; Mr. David Mitchell, 
Founder, Patients for Affordable Drugs, Washington, D.C.; Ms. 
Bari Talente, Executive Vice President, National Multiple 
Sclerosis Society, Washington, D.C.; Dr. Mariana Socal, 
Assistant Scientist, Johns Hopkins University Bloomberg School 
of Public Health, Department of Health Policy and Management, 
Baltimore, Maryland; Mr. Christopher Holt, Director of Health 
Care Policy, American Action Forum, Washington, D.C.; and Dr. 
Craig Garthwaite, Associate Professor of Strategy, Northwestern 
University Kellogg School of Management, Evanston, Illinois.

Full Committee Markup of H.R. 5800, the Ban Surprise Billing Act

    On February 11, 2020, the Committee met to mark up H.R. 
5800, the Ban Surprise Billing Act, introduced by then-Chairman 
Bobby Scott (D-VA-3) and then-Ranking Member Foxx (R-NC-5). The 
legislation protected participants in employer-provided health 
plans from exorbitant out-of-network costs and included 
provisions improving transparency with respect to group health 
plan service providers, including those providing brokerage and 
consulting services. The Committee favorably reported the bill, 
as amended, by a recorded vote of 32 yeas and 13 nays.

                             117TH CONGRESS

Subcommittee Hearing on Lower Drug Costs Now: Expanding Access to 
        Affordable Health Care

    On May 5, 2021, the HELP Subcommittee held a hearing 
entitled ``Lower Drug Costs Now: Expanding Access to Affordable 
Health Care,'' which examined the causes of rising health care 
costs. The witnesses were Dr. Douglas Holtz-Eakin, President, 
American Action Forum, Washington, D.C.; Mr. Frederick Isasi, 
Executive Director, Families USA, Washington, D.C.; Mr. David 
Mitchell, Founder, Patients for Affordable Drugs, Washington, 
D.C.; and Dr. Mariana Socal, Assistant Scientist, Johns Hopkins 
University Bloomberg School of Public Health, Baltimore, 
Maryland. The hearing included discussion regarding how the 
lack of PBM transparency contributes to higher costs for plans 
and consumers.

Full Committee Hearing reviewing the President's Fiscal Year 2023 
        Budget Proposal for the Department of Health and Human Services

    On April 6, 2022, the Committee held a hearing entitled 
``Examining the Policies and Priorities of the U.S. Department 
of Health and Human Services.'' The sole witness was the 
Honorable Xavier Becerra, Secretary of the U.S. Department of 
Health and Human Services (HHS), Washington, D.C. The lack of 
transparency in PBMs' activities and the impacts on health 
plans was discussed at the hearing.

                             118TH CONGRESS

Subcommittee Hearing on Reducing Health Care Costs for Working 
        Americans and Their Families

    On April 26, 2023, the HELP Subcommittee held a hearing 
entitled ``Reducing Health Care Costs for Working Americans and 
Their Families,'' which examined hospital billing practices, 
the need for increased transparency in health care, and 
lowering costs by expanding oversight of PBMs. Witnesses were 
Mr. Joel White, President, Council for Affordable Health 
Coverage, Washington, D.C.; Mrs. Tracy Watts, Senior Partner, 
Mercer, Washington, D.C.; Ms. Marcie Strouse, Partner, Capitol 
Benefits Group, Des Moines, Iowa; and Ms. Sabrina Corlette, 
J.D., Research Professor and Co-Director, Center on Health 
Insurance Reforms, Georgetown University McCourt School of 
Public Policy, Washington, D.C.

Full Committee Hearing Examining the President's Fiscal Year 2024 
        Budget Proposal for the Department of Health and Human Services

    On June 13, 2023, the Committee held a hearing entitled 
``Examining the Policies and Priorities of the U.S. Department 
of Health and Human Services.'' The sole witness was the 
Honorable Xavier Becerra, Secretary of HHS, Washington, D.C. 
Secretary Becerra spoke to the need for improved transparency 
of PBMs' activities.

Subcommittee Hearing on Competition and Transparency: The Pathway 
        Forward for a Stronger Health Care Market

    On June 21, 2023, the HELP Subcommittee held a hearing 
entitled ``Competition and Transparency: The Pathway Forward 
for a Stronger Health Care Market,'' which examined the need to 
improve competition and transparency in health care, including 
with respect to the activities of PBMs and third-party 
administrators (TPAs). The witnesses were Dr. Gloria Sachdev, 
President and CEO, Employers' Forum of Indiana, Carmel, 
Indiana; Ms. Sophia Tripoli, Senior Director of Health Policy 
and Director of the Center for Affordable Whole-Person Care, 
Families USA, Washington, D.C.; Mr. Greg Baker, CEO, 
AffirmedRx, Louisville, Kentucky; Ms. Christine Monahan, 
Assistant Research Professor, Center on Health Insurance 
Reforms, Georgetown University McCourt School of Public Policy, 
Washington, D.C.; and Mr. Juan Carlos ``JC'' Scott, President 
and CEO, Pharmaceutical Care Management Association, 
Washington, D.C.

Full Committee Markup of H.R. 4527, the Health DATA Act

    On July 11, 2023, Rep. Lori Chavez-DeRemer (R-OR-5) 
introduced H.R. 4527, the Health DATA Act, with Reps. Mark 
Takano (D-CA-39) and Kathy Manning (D-NC-6) as original 
cosponsors. On July 12, 2023, the Committee met to mark up H.R. 
4527 and reported it favorably, as amended, to the House of 
Representatives by a vote of 38 yeas and 1 nay. The Committee 
adopted an Amendment in the Nature of a Substitute offered by 
Rep. Chavez-DeRemer, which made technical changes to H.R. 4527.

                            Committee Views


                STRENGTHENING THE GAG CLAUSE PROHIBITION

    Transparency requirements were enacted as part of the 
Consolidated Appropriations Act, 2021 (CAA).\2\ The CAA added 
Section 724 to ERISA,\3\ prohibiting gag clauses in contracts 
between health plans and issuers, health care providers, 
networks of providers, TPAs, and other service providers that 
restrict the plan or issuer from: obtaining cost or quality of 
care information; accessing de-identified claims data; or 
sharing information or data with a business associate. Plans 
and issuers must submit an annual attestation to the 
Departments of Labor, HHS, and the Treasury (jointly the tri-
agencies) that they have complied with this requirement. In 
February, the tri-agencies issued guidance on the CAA's 
transparency provisions\4\ and created a website for the 
submission of attestations to the Centers for Medicare and 
Medicaid Services.\5\
---------------------------------------------------------------------------
    \2\Pub. L. No. 116-260 (2020).
    \3\Parallel provisions were added to Section 9824 of the Internal 
Revenue Code and Section 2799A-9 of the Public Health Service Act.
    \4\https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-
activities/resource-center/faqs/aca-part-57.pdf.
    \5\https://www.cms.gov/cciio/programs-and-initiatives/other-
insurance-protections/gag-clause-prohibition-compliance.
---------------------------------------------------------------------------
    Despite the changes made by the CAA, plan fiduciaries 
report they have not been able to obtain information that 
should be available under ERISA Section 724. Service providers, 
such as TPAs and PBMs, reportedly continue to erect barriers 
that limit plan fiduciaries from having full access to this 
data. Common restrictions include limitations on audits--such 
as the number and frequency of audits--that effectively make 
the data inaccessible.
    The responsibility under Section 724 is also misaligned; 
the prohibition on gag clauses is placed on the plan or issuer 
rather than on the service provider. The tri-agencies' guidance 
has compounded this problem by allowing service providers to 
submit the attestation on behalf of plans, even allowing for a 
single submission on behalf of multiple plans.
    During the HELP Subcommittee's June 21, 2023, hearing on 
``Competition and Transparency: The Pathway Forward for a 
Stronger Health Care Market,'' Ms. Monahan encouraged Congress 
to examine ways to expand the gag clause prohibitions included 
in the CAA; Ms. Monahan also noted that TPAs currently are not 
required to eliminate gag clauses, placing the onus on 
employers to try to negotiate contracts without gag clauses.\6\ 
Ms. Sachdev highlighted that PBMs and TPAs often delay relaying 
information back to plan fiduciaries.\7\ She also spoke of 
successful efforts made in Indiana to combat these practices.
---------------------------------------------------------------------------
    \6\https://edworkforce.house.gov/uploadedfiles/
monahan_testimony.pdf.
    \7\https://edworkforce.house.gov/uploadedfiles/
sachdev_testimony.pdf.
---------------------------------------------------------------------------

                   H.R. 4527, HEALTH DATA ACT OF 2023

    H.R. 4527 eliminates any ambiguity in the CAA's 
requirements and ensures that the provisions function 
consistent with congressional intent. H.R. 4527 ensures the 
information that should be available to plan fiduciaries under 
ERISA Section 724 is available by prohibiting barriers that 
limit access to this data. H.R. 4527 will empower plan 
fiduciaries to access and use data and information that is 
necessary to monitor their agreements with service providers in 
order to provide higher quality and more affordable coverage in 
group health plans.

                  H.R. 4527 Section-by-Section Summary


Section 1. Short title

    Section 1 provides that the short title is ``Health Data 
Access, Transparency and Affordability Act (Health DATA Act).''

Section 2. Strengthening the gag clause

    Section 2(a) amends ERISA to provide that any contract or 
arrangement between a group health plan and any other entity 
(such as a health care provider, TPA, or PBM) is not reasonable 
within the meaning of the 408(b)(2) prohibited transaction 
exemption unless the responsible plan fiduciary is permitted to 
audit all de-identified claims and encounter information. A 
contract may not contain provisions that would:
           Limit the number of audits permitted during 
        a period of time;
           Limit the number of claims and encounter 
        data that a fiduciary may access during an audit;
           Limit the disclosure of pricing terms for 
        value-based arrangements;
           Limit the disclosure of overpayments and 
        overpayment recovery terms;
           Limit the right of the fiduciary to select 
        an auditor;
           Delay the fiduciary by more than 60 days 
        from auditing the information and data; or
           Charge a fee beyond the reasonable direct 
        costs to conduct the audit.
    Section 2(b) authorizes the Secretary of Labor to assess a 
civil monetary penalty against an entity that violates the 
Health DATA Act of $10,000 per day for each day the violation 
continues.

Section 3. Attestation

    Section 3 of the Health DATA Act strengthens the gag clause 
attestation by requiring that the group health plan attestation 
include a statement verifying that the information is available 
upon request, is issued in a timely manner, and does not delay 
the fiduciary from auditing the information. Section 3 also 
includes a safeguard that prevents a TPA from submitting the 
attestation on behalf of the plan, with an alternative 
submission option available in cases in which the plan or 
issuer is unable to submit the attestation.

Section 4. Study on plan assets

    Section 4 requires the Secretary of Labor to submit a 
report to the Committee on Education and the Workforce of the 
House of Representatives on de-identified claims and encounter 
data, whether this data could be deemed a plan asset under 
ERISA, and whether the data belongs to a group health plan 
rather than a service provider.

              Application of Law to the Legislative Branch


                       Explanation of Amendments

    The amendments, including the amendment in the nature of a 
substitute, are explained in the body of this report.

              Application of Law to the Legislative Branch

    Section 102(b)3 of Public Law 104-1 requires a description 
of the application of this bill to the legislative branch. H.R. 
4527 takes important steps to preserve and expand access to 
affordable, high-quality health care by ensuring that group 
health plan fiduciaries have effective access to plan data. 
H.R. 4527 is applicable only to group health plans subject to 
ERISA and therefore does not affect the legislative branch.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended 
by Section 101(a)(2) of the Unfunded Mandates Reform Act of 
1995, Pub. L. No. 104-4), the Committee adopts as its own the 
cost estimate prepared by the Congressional Budget Office (CBO) 
pursuant to section 402 of the Congressional Budget and 
Impoundment Control Act of 1974.

                           Earmark Statement

    H.R. 4527 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI of the Rules of the House of 
Representatives.

                            Roll Call Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee Report to include for 
each record vote on a motion to report the measure or matter 
and on any amendments offered to the measure or matter the 
total number of votes for and against and the names of the 
Members voting for and against.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

         Statement of General Performance Goals and Objectives

    In accordance with clause (3)(c) of rule XIII of the Rules 
of the House of Representatives, the goal of H.R. 4527 is to 
preserve and expand access to affordable, high-quality health 
care by ensuring that plan fiduciaries have effective access to 
de-identified claims and encounter information for their group 
health plans.

                    Duplication of Federal Programs

    No provision of H.R. 4527 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the committee's oversight findings and recommendations are 
reflected in the body of this report.

            Required Committee Hearing and Related Hearings

    In compliance with clause 3(c)(6) of rule XIII of the Rules 
of the House of Representatives the following hearings held 
during the 118th Congress were used to develop or consider H.R. 
4527: on April 26, 2023, the HELP Subcommittee held a hearing 
entitled ``Reducing Health Care Costs for Working Americans and 
Their Families;'' on June 13, 2023, the Committee held a 
hearing entitled ``Examining the Policies and Priorities of the 
U.S. Department of Health and Human Services;'' and on June 21, 
2023, the HELP Subcommittee held a hearing entitled 
``Competition and Transparency: The Pathway Forward for a 
Stronger Health Care Market.''

               New Budget Authority and CBO Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee requested a 
cost estimate from the Congressional Budget Office. The 
Committee adopts the following estimate for H.R. 4527 provided 
by the Congressional Budget Office to Majority staff via email 
on September 12, 2023: ``We estimate no effect on direct 
spending or revenues for H.R. 4527 (Health DATA Act of 2023), 
with time stamp July 10, 2023 at 3:42pm).''

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 4527. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when, as with the present report, 
the committee adopts as its own the cost estimate of the bill 
prepared by the Congressional Budget Office under section 402 
of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

            EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974




           *       *       *       *       *       *       *
TITLE I--PROTECTION OF EMPLOYEE BENEFIT RIGHTS

           *       *       *       *       *       *       *



Subtitle B--Regulatory Provisions

           *       *       *       *       *       *       *



Part 4--Fiduciary Responsibility

           *       *       *       *       *       *       *



                EXEMPTIONS FROM PROHIBITED TRANSACTIONS

  Sec. 408. (a) The Secretary shall establish an exemption 
procedure for purposes of this subsection. Pursuant to such 
procedure, he may grant a conditional or unconditional 
exemption of any fiduciary or transaction, or class of 
fiduciaries or transactions, from all or part of the 
restrictions imposed by sections 406 and 407(a). Action under 
this subsection may be taken only after consultation and 
coordination with the Secretary of the Treasury. An exemption 
granted under this section shall not relieve a fiduciary from 
any other applicable provision of this Act. The Secretary may 
not grant an exemption under this subsection unless he finds 
that such exemption is--
          (1) administratively feasible,
          (2) in the interests of the plan and of its 
        participants and beneficiaries, and
          (3) protective of the rights of participants and 
        beneficiaries of such plan.
Before granting an exemption under this subsection from section 
406(a) or 407(a), the Secretary shall publish notice in the 
Federal Register of the pendency of the exemption, shall 
require that adequate notice be given to interested persons, 
and shall afford interested persons opportunity to present 
views. The Secretary may not grant an exemption under this 
subsection from section 406(b) unless he affords an opportunity 
for a hearing and makes a determination on the record with 
respect to the findings required by paragraphs (1), (2), and 
(3) of this subsection.
  (b) The prohibitions provided in section 406 shall not apply 
to any of the following transactions:
          (1) Any loans made by the plan to parties in interest 
        who are participants or beneficiaries of the plan if 
        such loans (A) are available to all such participants 
        and beneficiaries on a reasonably equivalent basis, (B) 
        are not made available to highly compensated employees 
        (within the meaning of section 414(q) of the Internal 
        Revenue Code of 1986) in an amount greater than the 
        amount made available to other employees, (C) are made 
        in accordance with specific provisions regarding such 
        loans set forth in the plan, (D) bear a reasonable rate 
        of interest, and (E) are adequately secured. A loan 
        made by a plan shall not fail to meet the requirements 
        of the preceding sentence by reason of a loan repayment 
        suspension described under section 414(u)(4) of the 
        Internal Revenue Code of 1986.
          (2)(A) Contracting or making reasonable arrangements 
        with a party in interest for office space, or legal, 
        accounting, or other services necessary for the 
        establishment or operation of the plan, if no more than 
        reasonable compensation is paid therefor.
          (B)(i) No contract or arrangement for services 
        between a covered plan and a covered service provider, 
        and no extension or renewal of such a contract or 
        arrangement, is reasonable within the meaning of this 
        paragraph unless the requirements of [this clause] this 
        paragraph are met.
          (ii)(I) For purposes of this subparagraph:
                  (aa) The term ``covered plan'' means a group 
                health plan as defined section 733(a).
                  (bb) The term ``covered service provider'' 
                means a service provider that enters into a 
                contract or arrangement with the covered plan 
                and reasonably expects $1,000 (or such amount 
                as the Secretary may establish in regulations 
                to account for inflation since the date of 
                enactment of the Consolidated Appropriations 
                Act, 2021, as appropriate) or more in 
                compensation, direct or indirect, to be 
                received in connection with providing one or 
                more of the following services, pursuant to the 
                contract or arrangement, regardless of whether 
                such services will be performed, or such 
                compensation received, by the covered service 
                provider, an affiliate, or a subcontractor:
                          (AA) Brokerage services, for which 
                        the covered service provider, an 
                        affiliate, or a subcontractor 
                        reasonably expects to receive indirect 
                        compensation or direct compensation 
                        described in item (dd), provided to a 
                        covered plan with respect to selection 
                        of insurance products (including vision 
                        and dental), recordkeeping services, 
                        medical management vendor, benefits 
                        administration (including vision and 
                        dental), stop-loss insurance, pharmacy 
                        benefit management services, wellness 
                        services, transparency tools and 
                        vendors, group purchasing organization 
                        preferred vendor panels, disease 
                        management vendors and products, 
                        compliance services, employee 
                        assistance programs, or third party 
                        administration services.
                          (BB) Consulting, for which the 
                        covered service provider, an affiliate, 
                        or a subcontractor reasonably expects 
                        to receive indirect compensation or 
                        direct compensation described in item 
                        (dd), related to the development or 
                        implementation of plan design, 
                        insurance or insurance product 
                        selection (including vision and 
                        dental), recordkeeping, medical 
                        management, benefits administration 
                        selection (including vision and 
                        dental), stop-loss insurance, pharmacy 
                        benefit management services, wellness 
                        design and management services, 
                        transparency tools, group purchasing 
                        organization agreements and services, 
                        participation in and services from 
                        preferred vendor panels, disease 
                        management, compliance services, 
                        employee assistance programs, or third 
                        party administration services.
                  (cc) The term ``affiliate'', with respect to 
                a covered service provider, means an entity 
                that directly or indirectly (through one or 
                more intermediaries) controls, is controlled 
                by, or is under common control with, such 
                provider, or is an officer, director, or 
                employee of, or partner in, such provider.
                  (dd)(AA) The term ``compensation'' means 
                anything of monetary value, but does not 
                include non-monetary compensation valued at 
                $250 (or such amount as the Secretary may 
                establish in regulations to account for 
                inflation since the date of enactment of the 
                Consolidated Appropriations Act, 2021, as 
                appropriate) or less, in the aggregate, during 
                the term of the contract or arrangement.
                  (BB) The term ``direct compensation'' means 
                compensation received directly from a covered 
                plan.
                  (CC) The term ``indirect compensation'' means 
                compensation received from any source other 
                than the covered plan, the plan sponsor, the 
                covered service provider, or an affiliate. 
                Compensation received from a subcontractor is 
                indirect compensation, unless it is received in 
                connection with services performed under a 
                contract or arrangement with a subcontractor.
                  (ee) The term ``responsible plan fiduciary'' 
                means a fiduciary with authority to cause the 
                covered plan to enter into, or extend or renew, 
                the contract or arrangement.
                  (ff) The term ``subcontractor'' means any 
                person or entity (or an affiliate of such 
                person or entity) that is not an affiliate of 
                the covered service provider and that, pursuant 
                to a contract or arrangement with the covered 
                service provider or an affiliate, reasonably 
                expects to receive $1,000 (or such amount as 
                the Secretary may establish in regulations to 
                account for inflation since the date of 
                enactment of the Consolidated Appropriations 
                Act, 2021, as appropriate) or more in 
                compensation for performing one or more 
                services described in item (bb) under a 
                contract or arrangement with the covered plan.
          (II) For purposes of this subparagraph, a description 
        of compensation or cost may be expressed as a monetary 
        amount, formula, or a per capita charge for each 
        enrollee or, if the compensation or cost cannot 
        reasonably be expressed in such terms, by any other 
        reasonable method, including a disclosure that 
        additional compensation may be earned but may not be 
        calculated at the time of contract if such a disclosure 
        includes a description of the circumstances under which 
        the additional compensation may be earned and a 
        reasonable and good faith estimate if the covered 
        service provider cannot otherwise readily describe 
        compensation or cost and explains the methodology and 
        assumptions used to prepare such estimate. Any such 
        description shall contain sufficient information to 
        permit evaluation of the reasonableness of the 
        compensation or cost.
          (III) No person or entity is a ``covered service 
        provider'' within the meaning of subclause (I)(bb) 
        solely on the basis of providing services as an 
        affiliate or a subcontractor that is performing one or 
        more of the services described in subitem (AA) or (BB) 
        of such subclause under the contract or arrangement 
        with the covered plan.
          (iii) A covered service provider shall disclose to a 
        responsible plan fiduciary, in writing, the following:
                  (I) A description of the services to be 
                provided to the covered plan pursuant to the 
                contract or arrangement.
                  (II) If applicable, a statement that the 
                covered service provider, an affiliate, or a 
                subcontractor will provide, or reasonably 
                expects to provide, services pursuant to the 
                contract or arrangement directly to the covered 
                plan as a fiduciary (within the meaning of 
                section 3(21)).
                  (III) A description of all direct 
                compensation, either in the aggregate or by 
                service, that the covered service provider, an 
                affiliate, or a subcontractor reasonably 
                expects to receive in connection with the 
                services described in subclause (I).
                  (IV)(aa) A description of all indirect 
                compensation that the covered service provider, 
                an affiliate, or a subcontractor reasonably 
                expects to receive in connection with the 
                services described in subclause (I)--
                          (AA) including compensation from a 
                        vendor to a brokerage firm based on a 
                        structure of incentives not solely 
                        related to the contract with the 
                        covered plan; and
                          (BB) not including compensation 
                        received by an employee from an 
                        employer on account of work performed 
                        by the employee.
                  (bb) A description of the arrangement between 
                the payer and the covered service provider, an 
                affiliate, or a subcontractor, as applicable, 
                pursuant to which such indirect compensation is 
                paid.
                  (cc) Identification of the services for which 
                the indirect compensation will be received, if 
                applicable.
                  (dd) Identification of the payer of the 
                indirect compensation.
                  (V) A description of any compensation that 
                will be paid among the covered service 
                provider, an affiliate, or a subcontractor, in 
                connection with the services described in 
                subclause (I) if such compensation is set on a 
                transaction basis (such as commissions, 
                finder's fees, or other similar incentive 
                compensation based on business placed or 
                retained), including identification of the 
                services for which such compensation will be 
                paid and identification of the payers and 
                recipients of such compensation (including the 
                status of a payer or recipient as an affiliate 
                or a subcontractor), regardless of whether such 
                compensation also is disclosed pursuant to 
                subclause (III) or (IV).
                  (VI) A description of any compensation that 
                the covered service provider, an affiliate, or 
                a subcontractor reasonably expects to receive 
                in connection with termination of the contract 
                or arrangement, and how any prepaid amounts 
                will be calculated and refunded upon such 
                termination.
          (iv) A covered service provider shall disclose to a 
        responsible plan fiduciary, in writing a description of 
        the manner in which the compensation described in 
        clause (iii), as applicable, will be received.
          (v)(I) A covered service provider shall disclose the 
        information required under clauses (iii) and (iv) to 
        the responsible plan fiduciary not later than the date 
        that is reasonably in advance of the date on which the 
        contract or arrangement is entered into, and extended 
        or renewed.
          (II) A covered service provider shall disclose any 
        change to the information required under clause (iii) 
        and (iv) as soon as practicable, but not later than 60 
        days from the date on which the covered service 
        provider is informed of such change, unless such 
        disclosure is precluded due to extraordinary 
        circumstances beyond the covered service provider's 
        control, in which case the information shall be 
        disclosed as soon as practicable.
          (vi)(I) Upon the written request of the responsible 
        plan fiduciary or covered plan administrator, a covered 
        service provider shall furnish any other information 
        relating to the compensation received in connection 
        with the contract or arrangement that is required for 
        the covered plan to comply with the reporting and 
        disclosure requirements under this Act.
          (II) The covered service provider shall disclose the 
        information required under clause (iii)(I) reasonably 
        in advance of the date upon which such responsible plan 
        fiduciary or covered plan administrator states that it 
        is required to comply with the applicable reporting or 
        disclosure requirement, unless such disclosure is 
        precluded due to extraordinary circumstances beyond the 
        covered service provider's control, in which case the 
        information shall be disclosed as soon as practicable.
          (vii) No contract or arrangement will fail to be 
        reasonable under this subparagraph solely because the 
        covered service provider, acting in good faith and with 
        reasonable diligence, makes an error or omission in 
        disclosing the information required pursuant to clause 
        (iii) (or a change to such information disclosed 
        pursuant to clause (v)(II)) or clause (vi), provided 
        that the covered service provider discloses the correct 
        information to the responsible plan fiduciary as soon 
        as practicable, but not later than 30 days from the 
        date on which the covered service provider knows of 
        such error or omission.
          (viii)(I) Pursuant to subsection (a), subparagraphs 
        (C) and (D) of section 406(a)(1) shall not apply to a 
        responsible plan fiduciary, notwithstanding any failure 
        by a covered service provider to disclose information 
        required under clause (iii), if the following 
        conditions are met:
                  (aa) The responsible plan fiduciary did not 
                know that the covered service provider failed 
                or would fail to make required disclosures and 
                reasonably believed that the covered service 
                provider disclosed the information required to 
                be disclosed.
                  (bb) The responsible plan fiduciary, upon 
                discovering that the covered service provider 
                failed to disclose the required information, 
                requests in writing that the covered service 
                provider furnish such information.
                  (cc) If the covered service provider fails to 
                comply with a written request described in 
                subclause (II) within 90 days of the request, 
                the responsible plan fiduciary notifies the 
                Secretary of the covered service provider's 
                failure, in accordance with subclauses (II) and 
                (III).
          (II) A notice described in subclause (I)(cc) shall 
        contain--
                  (aa) the name of the covered plan;
                  (bb) the plan number used for the annual 
                report on the covered plan;
                  (cc) the plan sponsor's name, address, and 
                employer identification number;
                  (dd) the name, address, and telephone number 
                of the responsible plan fiduciary;
                  (ee) the name, address, phone number, and, if 
                known, employer identification number of the 
                covered service provider;
                  (ff) a description of the services provided 
                to the covered plan;
                  (gg) a description of the information that 
                the covered service provider failed to 
                disclose;
                  (hh) the date on which such information was 
                requested in writing from the covered service 
                provider; and
                  (ii) a statement as to whether the covered 
                service provider continues to provide services 
                to the plan.
          (III) A notice described in subclause (I)(cc) shall 
        be filed with the Department not later than 30 days 
        following the earlier of--
                  (aa) The covered service provider's refusal 
                to furnish the information requested by the 
                written request described in subclause (I)(bb); 
                or
                  (bb) 90 days after the written request 
                referred to in subclause (I)(cc) is made.
          (IV) If the covered service provider fails to comply 
        with the written request under subclause (I)(bb) within 
        90 days of such request, the responsible plan fiduciary 
        shall determine whether to terminate or continue the 
        contract or arrangement under section 404. If the 
        requested information relates to future services and is 
        not disclosed promptly after the end of the 90-day 
        period, the responsible plan fiduciary shall terminate 
        the contract or arrangement as expeditiously as 
        possible, consistent with such duty of prudence.
          (ix) Nothing in this subparagraph shall be construed 
        to supersede any provision of State law that governs 
        disclosures by parties that provide the services 
        described in this section, except to the extent that 
        such law prevents the application of a requirement of 
        this section.
          (C) No contract or arrangement for services between a 
        group health plan and any other entity, such as a 
        health care provider, network or association of 
        providers, third-party administrator, or pharmacy 
        benefit manager, is reasonable within the meaning of 
        this paragraph unless such contract or agreement--
                  (i) allows the responsible plan fiduciary to 
                audit all de-identified claims and encounter 
                information or data described in section 
                724(a)(1)(B) to--
                          (I) ensure that such entity complies 
                        with the terms of the plan and any 
                        applicable law; and
                          (II) determine the reasonableness of 
                        compensation paid by the plan; and
                  (ii) does not--
                          (I) unreasonably limit the number of 
                        audits permitted during a given period 
                        of time;
                          (II) limit the number of de-
                        identified claims and encounter 
                        information or data that the 
                        responsible plan fiduciary may access 
                        during an audit;
                          (III) limit the disclosure of pricing 
                        terms for value based payment 
                        arrangements, including--
                                  (aa) payment calculations and 
                                formulas;
                                  (bb) quality measures;
                                  (cc) contract terms;
                                  (dd) payment amounts;
                                  (ee) measurement periods for 
                                all incentives; and
                                  (ff) other payment 
                                methodologies furnished by a 
                                health care provider, network 
                                or association of providers, 
                                third-party administrator, or 
                                pharmacy benefit manager;
                          (IV) limit the disclosure of 
                        overpayments and overpayment recovery 
                        terms;
                          (V) limit the right of the 
                        responsible plan fiduciary to select an 
                        auditor;
                          (VI) otherwise limit or unduly delay 
                        by greater than 60 days the responsible 
                        plan fiduciary from auditing such 
                        information or data; or
                          (VII) charge a fee beyond the 
                        reasonable direct costs to administer 
                        the operation of conducting such 
                        audits.
          (3) A loan to an employee stock ownership plan (as 
        defined in section 407(d)(6)), if--
                  (A) such loan is primarily for the benefit of 
                participants and beneficiaries of the plan, and
                  (B) such loan is at an interest rate which is 
                not in excess of a reasonable rate.
        If the plan gives collateral to a party in interest for 
        such loan, such collateral may consist only of 
        qualifying employer securities (as defined in section 
        407(d)(5)).
          (4) The investment of all or part of a plan's assets 
        in deposits which bear a reasonable interest rate in a 
        bank or similar financial institution supervised by the 
        United States or a State, if such bank or other 
        institution is a fiduciary of such plan and if--
                  (A) the plan covers only employees of such 
                bank or other institution and employees of 
                affiliates of such bank or other institution, 
                or
                  (B) such investment is expressly authorized 
                by a provision of the plan or by a fiduciary 
                (other than such bank or institution or 
                affiliate thereof) who is expressly empowered 
                by the plan to so instruct the trustee with 
                respect to such investment.
          (5) Any contract for life insurance, health 
        insurance, or annuities with one or more insurers which 
        are qualified to do business in a State, if the plan 
        pays no more than adequate consideration, and if each 
        such insurer or insurers is--
                  (A) the employer maintaining the plan, or
                  (B) a party in interest which is wholly owned 
                (directly or indirectly) by the employer 
                maintaining the plan, or by any person which is 
                a party in interest with respect to the plan, 
                but only if the total premiums and annuity 
                considerations written by such insurers for 
                life insurance, health insurance, or annuities 
                for all plans (and their employers) with 
                respect to which such insurers are parties in 
                interest (not including premiums or annuity 
                considerations written by the employer 
                maintaining the plan) do not exceed 5 percent 
                of the total premiums and annuity 
                considerations written for all lines of 
                insurance in that year by such insurers (not 
                including premiums or annuity considerations 
                written by the employer maintaining the plan).
          (6) The providing of any ancillary service by a bank 
        or similar financial institution supervised by the 
        United States or a State, if such bank or other 
        institution is a fiduciary of such plan, and if--
                  (A) such bank or similar financial 
                institution has adopted adequate internal 
                safeguards which assure that the providing of 
                such ancillary service is consistent with sound 
                banking and financial practice, as determined 
                by Federal or State supervisory authority, and
                  (B) the extent to which such ancillary 
                service is provided is subject to specific 
                guidelines issued by such bank or similar 
                financial institution (as determined by the 
                Secretary after consultation with Federal and 
                State supervisory authority), and adherence to 
                such guidelines would reasonably preclude such 
                bank or similar financial institution from 
                providing such ancillary service (i) in an 
                excessive or unreasonable manner, and (ii) in a 
                manner that would be inconsistent with the best 
                interests of participants and beneficiaries of 
                employee benefit plans.
        Such ancillary services shall not be provided at more 
        than reasonable compensation.
          (7) The exercise of a privilege to convert 
        securities, to the extent provided in regulations of 
        the Secretary, but only if the plan receives no less 
        than adequate consideration pursuant to such 
        conversion.
          (8) Any transaction between a plan and (i) a common 
        or collective trust fund or pooled investment fund 
        maintained by a party in interest which is a bank or 
        trust company supervised by a State or Federal agency 
        or (ii) a pooled investment fund of an insurance 
        company qualified to do business in a State, if--
                  (A) the transaction is a sale or purchase of 
                an interest in the fund,
                  (B) the bank, trust company, or insurance 
                company receives not more than reasonable 
                compensation, and
                  (C) such transaction is expressly permitted 
                by the instrument under which the plan is 
                maintained, or by a fiduciary (other than the 
                bank, trust company, or insurance company, or 
                an affiliate thereof) who has authority to 
                manage and control the assets of the plan.
          (9) The making by a fiduciary of a distribution of 
        the assets of the plan in accordance with the terms of 
        the plan if such assets are distributed in the same 
        manner as provided under section 4044 of this Act 
        (relating to allocation of assets).
          (10) Any transaction required or permitted under part 
        1 of subtitle E of title IV.
          (11) A merger of multiemployer plans, or the transfer 
        of assets or liabilities between multiemployer plans, 
        determined by the Pension Benefit Guaranty Corporation 
        to meet the requirements of section 4231.
          (12) The sale by a plan to a party in interest on or 
        after December 18, 1987, of any stock, if--
                  (A) the requirements of paragraphs (1) and 
                (2) of subsection (e) are met with respect to 
                such stock,
                  (B) on the later of the date on which the 
                stock was acquired by the plan, or January 1, 
                1975, such stock constituted a qualifying 
                employer security (as defined in section 
                407(d)(5) as then in effect), and
                  (C) such stock does not constitute a 
                qualifying employer security (as defined in 
                section 407(d)(5) as in effect at the time of 
                the sale).
          (13) Any transfer made before January 1, 2033, of 
        excess pension assets from a defined benefit plan to a 
        retiree health account in a qualified transfer 
        permitted under section 420 of the Internal Revenue 
        Code of 1986 (as in effect on the date of enactment of 
        the SECURE 2.0 Act of 2022).
          (14) Any transaction in connection with the provision 
        of investment advice described in section 3(21)(A)(ii) 
        to a participant or beneficiary of an individual 
        account plan that permits such participant or 
        beneficiary to direct the investment of assets in their 
        individual account, if--
                  (A) the transaction is--
                          (i) the provision of the investment 
                        advice to the participant or 
                        beneficiary of the plan with respect to 
                        a security or other property available 
                        as an investment under the plan,
                          (ii) the acquisition, holding, or 
                        sale of a security or other property 
                        available as an investment under the 
                        plan pursuant to the investment advice, 
                        or
                          (iii) the direct or indirect receipt 
                        of fees or other compensation by the 
                        fiduciary adviser or an affiliate 
                        thereof (or any employee, agent, or 
                        registered representative of the 
                        fiduciary adviser or affiliate) in 
                        connection with the provision of the 
                        advice or in connection with an 
                        acquisition, holding, or sale of a 
                        security or other property available as 
                        an investment under the plan pursuant 
                        to the investment advice; and
                  (B) the requirements of subsection (g) are 
                met.
          (15)(A) Any transaction involving the purchase or 
        sale of securities, or other property (as determined by 
        the Secretary), between a plan and a party in interest 
        (other than a fiduciary described in section 3(21)(A)) 
        with respect to a plan if--
                  (i) the transaction involves a block trade,
                  (ii) at the time of the transaction, the 
                interest of the plan (together with the 
                interests of any other plans maintained by the 
                same plan sponsor), does not exceed 10 percent 
                of the aggregate size of the block trade,
                  (iii) the terms of the transaction, including 
                the price, are at least as favorable to the 
                plan as an arm's length transaction, and
                  (iv) the compensation associated with the 
                purchase and sale is not greater than the 
                compensation associated with an arm's length 
                transaction with an unrelated party.
          (B) For purposes of this paragraph, the term ``block 
        trade'' means any trade of at least 10,000 shares or 
        with a market value of at least $200,000 which will be 
        allocated across two or more unrelated client accounts 
        of a fiduciary.
          (16) Any transaction involving the purchase or sale 
        of securities, or other property (as determined by the 
        Secretary), between a plan and a party in interest if--
                  (A) the transaction is executed through an 
                electronic communication network, alternative 
                trading system, or similar execution system or 
                trading venue subject to regulation and 
                oversight by--
                          (i) the applicable Federal regulating 
                        entity, or
                          (ii) such foreign regulatory entity 
                        as the Secretary may determine by 
                        regulation,
                  (B) either--
                          (i) the transaction is effected 
                        pursuant to rules designed to match 
                        purchases and sales at the best price 
                        available through the execution system 
                        in accordance with applicable rules of 
                        the Securities and Exchange Commission 
                        or other relevant governmental 
                        authority, or
                          (ii) neither the execution system nor 
                        the parties to the transaction take 
                        into account the identity of the 
                        parties in the execution of trades,
                  (C) the price and compensation associated 
                with the purchase and sale are not greater than 
                the price and compensation associated with an 
                arm's length transaction with an unrelated 
                party,
                  (D) if the party in interest has an ownership 
                interest in the system or venue described in 
                subparagraph (A), the system or venue has been 
                authorized by the plan sponsor or other 
                independent fiduciary for transactions 
                described in this paragraph, and
                  (E) not less than 30 days prior to the 
                initial transaction described in this paragraph 
                executed through any system or venue described 
                in subparagraph (A), a plan fiduciary is 
                provided written or electronic notice of the 
                execution of such transaction through such 
                system or venue.
          (17)(A) Transactions described in subparagraphs (A), 
        (B), and (D) of section 406(a)(1) between a plan and a 
        person that is a party in interest other than a 
        fiduciary (or an affiliate) who has or exercises any 
        discretionary authority or control with respect to the 
        investment of the plan assets involved in the 
        transaction or renders investment advice (within the 
        meaning of section 3(21)(A)(ii)) with respect to those 
        assets, solely by reason of providing services to the 
        plan or solely by reason of a relationship to such a 
        service provider described in subparagraph (F), (G), 
        (H), or (I) of section 3(14), or both, but only if in 
        connection with such transaction the plan receives no 
        less, nor pays no more, than adequate consideration.
          (B) For purposes of this paragraph, the term 
        ``adequate consideration'' means--
                  (i) in the case of a security for which there 
                is a generally recognized market--
                          (I) the price of the security 
                        prevailing on a national securities 
                        exchange which is registered under 
                        section 6 of the Securities Exchange 
                        Act of 1934, taking into account 
                        factors such as the size of the 
                        transaction and marketability of the 
                        security, or
                          (II) if the security is not traded on 
                        such a national securities exchange, a 
                        price not less favorable to the plan 
                        than the offering price for the 
                        security as established by the current 
                        bid and asked prices quoted by persons 
                        independent of the issuer and of the 
                        party in interest, taking into account 
                        factors such as the size of the 
                        transaction and marketability of the 
                        security, and
                  (ii) in the case of an asset other than a 
                security for which there is a generally 
                recognized market, the fair market value of the 
                asset as determined in good faith by a 
                fiduciary or fiduciaries in accordance with 
                regulations prescribed by the Secretary.
          (18) Foreign exchange transactions.--Any foreign 
        exchange transactions, between a bank or broker-dealer 
        (or any affiliate of either), and a plan (as defined in 
        section 3(3)) with respect to which such bank or 
        broker-dealer (or affiliate) is a trustee, custodian, 
        fiduciary, or other party in interest, if--
                  (A) the transaction is in connection with the 
                purchase, holding, or sale of securities or 
                other investment assets (other than a foreign 
                exchange transaction unrelated to any other 
                investment in securities or other investment 
                assets),
                  (B) at the time the foreign exchange 
                transaction is entered into, the terms of the 
                transaction are not less favorable to the plan 
                than the terms generally available in 
                comparable arm's length foreign exchange 
                transactions between unrelated parties, or the 
                terms afforded by the bank or broker-dealer (or 
                any affiliate of either) in comparable arm's-
                length foreign exchange transactions involving 
                unrelated parties,
                  (C) the exchange rate used by such bank or 
                broker-dealer (or affiliate) for a particular 
                foreign exchange transaction does not deviate 
                by more than 3 percent from the interbank bid 
                and asked rates for transactions of comparable 
                size and maturity at the time of the 
                transaction as displayed on an independent 
                service that reports rates of exchange in the 
                foreign currency market for such currency, and
                  (D) the bank or broker-dealer (or any 
                affiliate of either) does not have investment 
                discretion, or provide investment advice, with 
                respect to the transaction.
          (19) Cross trading.--Any transaction described in 
        sections 406(a)(1)(A) and 406(b)(2) involving the 
        purchase and sale of a security between a plan and any 
        other account managed by the same investment manager, 
        if--
                  (A) the transaction is a purchase or sale, 
                for no consideration other than cash payment 
                against prompt delivery of a security for which 
                market quotations are readily available,
                  (B) the transaction is effected at the 
                independent current market price of the 
                security (within the meaning of section 
                270.17a-7(b) of title 17, Code of Federal 
                Regulations),
                  (C) no brokerage commission, fee (except for 
                customary transfer fees, the fact of which is 
                disclosed pursuant to subparagraph (D)), or 
                other remuneration is paid in connection with 
                the transaction,
                  (D) a fiduciary (other than the investment 
                manager engaging in the cross-trades or any 
                affiliate) for each plan participating in the 
                transaction authorizes in advance of any cross-
                trades (in a document that is separate from any 
                other written agreement of the parties) the 
                investment manager to engage in cross trades at 
                the investment manager's discretion, after such 
                fiduciary has received disclosure regarding the 
                conditions under which cross trades may take 
                place (but only if such disclosure is separate 
                from any other agreement or disclosure 
                involving the asset management relationship), 
                including the written policies and procedures 
                of the investment manager described in 
                subparagraph (H),
                  (E) each plan participating in the 
                transaction has assets of at least 
                $100,000,000, except that if the assets of a 
                plan are invested in a master trust containing 
                the assets of plans maintained by employers in 
                the same controlled group (as defined in 
                section 407(d)(7)), the master trust has assets 
                of at least $100,000,000,
                  (F) the investment manager provides to the 
                plan fiduciary who authorized cross trading 
                under subparagraph (D) a quarterly report 
                detailing all cross trades executed by the 
                investment manager in which the plan 
                participated during such quarter, including the 
                following information, as applicable: (i) the 
                identity of each security bought or sold; (ii) 
                the number of shares or units traded; (iii) the 
                parties involved in the cross-trade; and (iv) 
                trade price and the method used to establish 
                the trade price,
                  (G) the investment manager does not base its 
                fee schedule on the plan's consent to cross 
                trading, and no other service (other than the 
                investment opportunities and cost savings 
                available through a cross trade) is conditioned 
                on the plan's consent to cross trading,
                  (H) the investment manager has adopted, and 
                cross-trades are effected in accordance with, 
                written cross-trading policies and procedures 
                that are fair and equitable to all accounts 
                participating in the cross-trading program, and 
                that include a description of the manager's 
                pricing policies and procedures, and the 
                manager's policies and procedures for 
                allocating cross trades in an objective manner 
                among accounts participating in the cross-
                trading program, and
                  (I) the investment manager has designated an 
                individual responsible for periodically 
                reviewing such purchases and sales to ensure 
                compliance with the written policies and 
                procedures described in subparagraph (H), and 
                following such review, the individual shall 
                issue an annual written report no later than 90 
                days following the period to which it relates 
                signed under penalty of perjury to the plan 
                fiduciary who authorized cross trading under 
                subparagraph (D) describing the steps performed 
                during the course of the review, the level of 
                compliance, and any specific instances of non-
                compliance.
        The written report under subparagraph (I) shall also 
        notify the plan fiduciary of the plan's right to 
        terminate participation in the investment manager's 
        cross-trading program at any time.
          (20)(A) Except as provided in subparagraphs (B) and 
        (C), a transaction described in section 406(a) in 
        connection with the acquisition, holding, or 
        disposition of any security or commodity, if the 
        transaction is corrected before the end of the 
        correction period.
          (B) Subparagraph (A) does not apply to any 
        transaction between a plan and a plan sponsor or its 
        affiliates that involves the acquisition or sale of an 
        employer security (as defined in section 407(d)(1)) or 
        the acquisition, sale, or lease of employer real 
        property (as defined in section 407(d)(2)).
          (C) In the case of any fiduciary or other party in 
        interest (or any other person knowingly participating 
        in such transaction), subparagraph (A) does not apply 
        to any transaction if, at the time the transaction 
        occurs, such fiduciary or party in interest (or other 
        person) knew (or reasonably should have known) that the 
        transaction would (without regard to this paragraph) 
        constitute a violation of section 406(a).
          (D) For purposes of this paragraph, the term 
        ``correction period'' means, in connection with a 
        fiduciary or party in interest (or other person 
        knowingly participating in the transaction), the 14-day 
        period beginning on the date on which such fiduciary or 
        party in interest (or other person) discovers, or 
        reasonably should have discovered, that the transaction 
        would (without regard to this paragraph) constitute a 
        violation of section 406(a).
          (E) For purposes of this paragraph--
                  (i) The term ``security'' has the meaning 
                given such term by section 475(c)(2) of the 
                Internal Revenue Code of 1986 (without regard 
                to subparagraph (F)(iii) and the last sentence 
                thereof).
                  (ii) The term ``commodity'' has the meaning 
                given such term by section 475(e)(2) of such 
                Code (without regard to subparagraph (D)(iii) 
                thereof).
                  (iii) The term ``correct'' means, with 
                respect to a transaction--
                          (I) to undo the transaction to the 
                        extent possible and in any case to make 
                        good to the plan or affected account 
                        any losses resulting from the 
                        transaction, and
                          (II) to restore to the plan or 
                        affected account any profits made 
                        through the use of assets of the plan.
          (21) The provision of a de minimis financial 
        incentive described in section 401(k)(4)(A) or section 
        403(b)(12)(A) of the Internal Revenue Code of 1986.
  (c) Nothing in section 406 shall be construed to prohibit any 
fiduciary from--
          (1) receiving any benefit to which he may be entitled 
        as a participant or beneficiary in the plan, so long as 
        the benefit is computed and paid on a basis which is 
        consistent with the terms of the plan as applied to all 
        other participants and beneficiaries;
          (2) receiving any reasonable compensation for 
        services rendered, or for the reimbursement of expenses 
        properly and actually incurred, in the performance of 
        his duties with the plan; except that no person so 
        serving who already receives full time pay from an 
        employer or an association of employers, whose 
        employees are participants in the plan, or from an 
        employee organization whose members are participants in 
        such plan shall receive compensation from such plan, 
        except for reimbursement of expenses properly and 
        actually incurred; or
          (3) serving as a fiduciary in addition to being an 
        officer, employee, agent, or other representative of a 
        party in interest.
  (d)(1) Section 407(b) and subsections (b), (c), and (e) of 
this section shall not apply to a transaction in which a plan 
directly or indirectly--
          (A) lends any part of the corpus or income of the 
        plan to,
          (B) pays any compensation for personal services 
        rendered to the plan to, or
          (C) acquires for the plan any property from, or sells 
        any property to,
any person who is with respect to the plan an owner-employee 
(as defined in section 401(c)(3) of the Internal Revenue Code 
of 1986), a member of the family (as defined in section 
267(c)(4) of such Code) of any such owner-employee, or any 
corporation in which any such owner-employee owns, directly or 
indirectly, 50 percent or more of the total combined voting 
power of all classes of stock entitled to vote or 50 percent or 
more of the total value of shares of all classes of stock of 
the corporation.
  (2)(A) For purposes of paragraph (1), the following shall be 
treated as owner-employees:
          (i) A shareholder-employee.
          (ii) A participant or beneficiary of an individual 
        retirement plan (as defined in section 7701(a)(37) of 
        the Internal Revenue Code of 1986).
          (iii) An employer or association of employees which 
        establishes such an individual retirement plan under 
        section 408(c) of such Code.
  (B) Paragraph (1)(C) shall not apply to a transaction which 
consists of a sale of employer securities to an employee stock 
ownership plan (as defined in section 407(d)(6)) by a 
shareholder-employee, a member of the family (as defined in 
section 267(c)(4) of such Code) of any such owner-employee, or 
a corporation in which such a shareholder-employee owns stock 
representing a 50 percent or greater interest described in 
paragraph (1).
  (C) For purposes of paragraph (1)(A), the term ``owner-
employee'' shall only include a person described in clause (ii) 
or (iii) of subparagraph (A).
  (3) For purposes of paragraph (2), the term ``shareholder-
employee'' means an employee or officer of an S corporation (as 
defined in section 1361(a)(1) of such Code) who owns (or is 
considered as owning within the meaning of section 318(a)(1) of 
such Code) more than 5 percent of the outstanding stock of the 
corporation on any day during the taxable year of such 
corporation.
  (e) Sections 406 and 407 shall not apply to the acquisition 
or sale by a plan of qualifying employer securities (as defined 
in section 407(d)(5)) or acquisition, sale or lease by a plan 
of qualifying employer real property (as defined in section 
407(d)(4))--
          (1) if such acquisition, sale, or lease is for 
        adequate consideration (or in the case of a marketable 
        obligation, at a price not less favorable to the plan 
        than the price determined under section 407(e)(1)),
          (2) if no commission is charged with respect thereto, 
        and
          (3) if--
                  (A) the plan is an eligible individual 
                account plan (as defined in section 407(d)(3)), 
                or
                  (B) in the case of an acquisition or lease of 
                qualifying employer real property by a plan 
                which is not an eligible individual account 
                plan, or of an acquisition of qualifying 
                employer securities by such a plan, the lease 
                or acquisition is not prohibited by section 
                407(a).
  (f) Section 406(b)(2) shall not apply to any merger or 
transfer described in subsection (b)(11).
  (g) Provision of Investment Advice to Participant and 
Beneficiaries.--
          (1) In general.--The prohibitions provided in section 
        406 shall not apply to transactions described in 
        subsection (b)(14) if the investment advice provided by 
        a fiduciary adviser is provided under an eligible 
        investment advice arrangement.
          (2) Eligible investment advice arrangement.--For 
        purposes of this subsection, the term ``eligible 
        investment advice arrangement'' means an arrangement--
                  (A) which either--
                          (i) provides that any fees (including 
                        any commission or other compensation) 
                        received by the fiduciary adviser for 
                        investment advice or with respect to 
                        the sale, holding, or acquisition of 
                        any security or other property for 
                        purposes of investment of plan assets 
                        do not vary depending on the basis of 
                        any investment option selected, or
                          (ii) uses a computer model under an 
                        investment advice program meeting the 
                        requirements of paragraph (3) in 
                        connection with the provision of 
                        investment advice by a fiduciary 
                        adviser to a participant or 
                        beneficiary, and
                  (B) with respect to which the requirements of 
                paragraph (4), (5), (6), (7), (8), and (9) are 
                met.
          (3) Investment advice program using computer model.--
                  (A) In general.--An investment advice program 
                meets the requirements of this paragraph if the 
                requirements of subparagraphs (B), (C), and (D) 
                are met.
                  (B) Computer model.--The requirements of this 
                subparagraph are met if the investment advice 
                provided under the investment advice program is 
                provided pursuant to a computer model that--
                          (i) applies generally accepted 
                        investment theories that take into 
                        account the historic returns of 
                        different asset classes over defined 
                        periods of time,
                          (ii) utilizes relevant information 
                        about the participant, which may 
                        include age, life expectancy, 
                        retirement age, risk tolerance, other 
                        assets or sources of income, and 
                        preferences as to certain types of 
                        investments,
                          (iii) utilizes prescribed objective 
                        criteria to provide asset allocation 
                        portfolios comprised of investment 
                        options available under the plan,
                          (iv) operates in a manner that is not 
                        biased in favor of investments offered 
                        by the fiduciary adviser or a person 
                        with a material affiliation or 
                        contractual relationship with the 
                        fiduciary adviser, and
                          (v) takes into account all investment 
                        options under the plan in specifying 
                        how a participant's account balance 
                        should be invested and is not 
                        inappropriately weighted with respect 
                        to any investment option.
                  (C) Certification.--
                          (i) In general.--The requirements of 
                        this subparagraph are met with respect 
                        to any investment advice program if an 
                        eligible investment expert certifies, 
                        prior to the utilization of the 
                        computer model and in accordance with 
                        rules prescribed by the Secretary, that 
                        the computer model meets the 
                        requirements of subparagraph (B).
                          (ii) Renewal of certifications.--If, 
                        as determined under regulations 
                        prescribed by the Secretary, there are 
                        material modifications to a computer 
                        model, the requirements of this 
                        subparagraph are met only if a 
                        certification described in clause (i) 
                        is obtained with respect to the 
                        computer model as so modified.
                          (iii) Eligible investment expert.--
                        The term ``eligible investment expert'' 
                        means any person--
                                  (I) which meets such 
                                requirements as the Secretary 
                                may provide, and
                                  (II) does not bear any 
                                material affiliation or 
                                contractual relationship with 
                                any investment adviser or a 
                                related person thereof (or any 
                                employee, agent, or registered 
                                representative of the 
                                investment adviser or related 
                                person).
                  (D) Exclusivity of recommendation.--The 
                requirements of this subparagraph are met with 
                respect to any investment advice program if--
                          (i) the only investment advice 
                        provided under the program is the 
                        advice generated by the computer model 
                        described in subparagraph (B), and
                          (ii) any transaction described in 
                        subsection (b)(14)(A)(ii) occurs solely 
                        at the direction of the participant or 
                        beneficiary.
                Nothing in the preceding sentence shall 
                preclude the participant or beneficiary from 
                requesting investment advice other than that 
                described in subparagraph (A), but only if such 
                request has not been solicited by any person 
                connected with carrying out the arrangement.
          (4) Express authorization by separate fiduciary.--The 
        requirements of this paragraph are met with respect to 
        an arrangement if the arrangement is expressly 
        authorized by a plan fiduciary other than the person 
        offering the investment advice program, any person 
        providing investment options under the plan, or any 
        affiliate of either.
          (5) Annual audit.--The requirements of this paragraph 
        are met if an independent auditor, who has appropriate 
        technical training or experience and proficiency and so 
        represents in writing--
                  (A) conducts an annual audit of the 
                arrangement for compliance with the 
                requirements of this subsection, and
                  (B) following completion of the annual audit, 
                issues a written report to the fiduciary who 
                authorized use of the arrangement which 
                presents its specific findings regarding 
                compliance of the arrangement with the 
                requirements of this subsection.
        For purposes of this paragraph, an auditor is 
        considered independent if it is not related to the 
        person offering the arrangement to the plan and is not 
        related to any person providing investment options 
        under the plan.
          (6) Disclosure.--The requirements of this paragraph 
        are met if--
                  (A) the fiduciary adviser provides to a 
                participant or a beneficiary before the initial 
                provision of the investment advice with regard 
                to any security or other property offered as an 
                investment option, a written notification 
                (which may consist of notification by means of 
                electronic communication)--
                          (i) of the role of any party that has 
                        a material affiliation or contractual 
                        relationship with the fiduciary adviser 
                        in the development of the investment 
                        advice program and in the selection of 
                        investment options available under the 
                        plan,
                          (ii) of the past performance and 
                        historical rates of return of the 
                        investment options available under the 
                        plan,
                          (iii) of all fees or other 
                        compensation relating to the advice 
                        that the fiduciary adviser or any 
                        affiliate thereof is to receive 
                        (including compensation provided by any 
                        third party) in connection with the 
                        provision of the advice or in 
                        connection with the sale, acquisition, 
                        or holding of the security or other 
                        property,
                          (iv) of any material affiliation or 
                        contractual relationship of the 
                        fiduciary adviser or affiliates thereof 
                        in the security or other property,
                          (v) the manner, and under what 
                        circumstances, any participant or 
                        beneficiary information provided under 
                        the arrangement will be used or 
                        disclosed,
                          (vi) of the types of services 
                        provided by the fiduciary adviser in 
                        connection with the provision of 
                        investment advice by the fiduciary 
                        adviser,
                          (vii) that the adviser is acting as a 
                        fiduciary of the plan in connection 
                        with the provision of the advice, and
                          (viii) that a recipient of the advice 
                        may separately arrange for the 
                        provision of advice by another adviser, 
                        that could have no material affiliation 
                        with and receive no fees or other 
                        compensation in connection with the 
                        security or other property, and
                  (B) at all times during the provision of 
                advisory services to the participant or 
                beneficiary, the fiduciary adviser--
                          (i) maintains the information 
                        described in subparagraph (A) in 
                        accurate form and in the manner 
                        described in paragraph (8),
                          (ii) provides, without charge, 
                        accurate information to the recipient 
                        of the advice no less frequently than 
                        annually,
                          (iii) provides, without charge, 
                        accurate information to the recipient 
                        of the advice upon request of the 
                        recipient, and
                          (iv) provides, without charge, 
                        accurate information to the recipient 
                        of the advice concerning any material 
                        change to the information required to 
                        be provided to the recipient of the 
                        advice at a time reasonably 
                        contemporaneous to the change in 
                        information.
          (7) Other conditions.--The requirements of this 
        paragraph are met if--
                  (A) the fiduciary adviser provides 
                appropriate disclosure, in connection with the 
                sale, acquisition, or holding of the security 
                or other property, in accordance with all 
                applicable securities laws,
                  (B) the sale, acquisition, or holding occurs 
                solely at the direction of the recipient of the 
                advice,
                  (C) the compensation received by the 
                fiduciary adviser and affiliates thereof in 
                connection with the sale, acquisition, or 
                holding of the security or other property is 
                reasonable, and
                  (D) the terms of the sale, acquisition, or 
                holding of the security or other property are 
                at least as favorable to the plan as an arm's 
                length transaction would be.
          (8) Standards for presentation of information.--
                  (A) In general.--The requirements of this 
                paragraph are met if the notification required 
                to be provided to participants and 
                beneficiaries under paragraph (6)(A) is written 
                in a clear and conspicuous manner and in a 
                manner calculated to be understood by the 
                average plan participant and is sufficiently 
                accurate and comprehensive to reasonably 
                apprise such participants and beneficiaries of 
                the information required to be provided in the 
                notification.
                  (B) Model form for disclosure of fees and 
                other compensation.--The Secretary shall issue 
                a model form for the disclosure of fees and 
                other compensation required in paragraph 
                (6)(A)(iii) which meets the requirements of 
                subparagraph (A).
          (9) Maintenance for 6 years of evidence of 
        compliance.--The requirements of this paragraph are met 
        if a fiduciary adviser who has provided advice referred 
        to in paragraph (1) maintains, for a period of not less 
        than 6 years after the provision of the advice, any 
        records necessary for determining whether the 
        requirements of the preceding provisions of this 
        subsection and of subsection (b)(14) have been met. A 
        transaction prohibited under section 406 shall not be 
        considered to have occurred solely because the records 
        are lost or destroyed prior to the end of the 6-year 
        period due to circumstances beyond the control of the 
        fiduciary adviser.
          (10) Exemption for plan sponsor and certain other 
        fiduciaries.--
                  (A) In general.--Subject to subparagraph (B), 
                a plan sponsor or other person who is a 
                fiduciary (other than a fiduciary adviser) 
                shall not be treated as failing to meet the 
                requirements of this part solely by reason of 
                the provision of investment advice referred to 
                in section 3(21)(A)(ii) (or solely by reason of 
                contracting for or otherwise arranging for the 
                provision of the advice), if--
                          (i) the advice is provided by a 
                        fiduciary adviser pursuant to an 
                        eligible investment advice arrangement 
                        between the plan sponsor or other 
                        fiduciary and the fiduciary adviser for 
                        the provision by the fiduciary adviser 
                        of investment advice referred to in 
                        such section,
                          (ii) the terms of the eligible 
                        investment advice arrangement require 
                        compliance by the fiduciary adviser 
                        with the requirements of this 
                        subsection, and
                          (iii) the terms of the eligible 
                        investment advice arrangement include a 
                        written acknowledgment by the fiduciary 
                        adviser that the fiduciary adviser is a 
                        fiduciary of the plan with respect to 
                        the provision of the advice.
                  (B) Continued duty of prudent selection of 
                adviser and periodic review.--Nothing in 
                subparagraph (A) shall be construed to exempt a 
                plan sponsor or other person who is a fiduciary 
                from any requirement of this part for the 
                prudent selection and periodic review of a 
                fiduciary adviser with whom the plan sponsor or 
                other person enters into an eligible investment 
                advice arrangement for the provision of 
                investment advice referred to in section 
                3(21)(A)(ii). The plan sponsor or other person 
                who is a fiduciary has no duty under this part 
                to monitor the specific investment advice given 
                by the fiduciary adviser to any particular 
                recipient of the advice.
                  (C) Availability of plan assets for payment 
                for advice.--Nothing in this part shall be 
                construed to preclude the use of plan assets to 
                pay for reasonable expenses in providing 
                investment advice referred to in section 
                3(21)(A)(ii).
          (11) Definitions.--For purposes of this subsection 
        and subsection (b)(14)--
                  (A) Fiduciary adviser.--The term ``fiduciary 
                adviser'' means, with respect to a plan, a 
                person who is a fiduciary of the plan by reason 
                of the provision of investment advice referred 
                to in section 3(21)(A)(ii) by the person to a 
                participant or beneficiary of the plan and who 
                is--
                          (i) registered as an investment 
                        adviser under the Investment Advisers 
                        Act of 1940 (15 U.S.C. 80b-1 et seq.) 
                        or under the laws of the State in which 
                        the fiduciary maintains its principal 
                        office and place of business,
                          (ii) a bank or similar financial 
                        institution referred to in subsection 
                        (b)(4) or a savings association (as 
                        defined in section 3(b)(1) of the 
                        Federal Deposit Insurance Act (12 
                        U.S.C. 1813(b)(1)), but only if the 
                        advice is provided through a trust 
                        department of the bank or similar 
                        financial institution or savings 
                        association which is subject to 
                        periodic examination and review by 
                        Federal or State banking authorities,
                          (iii) an insurance company qualified 
                        to do business under the laws of a 
                        State,
                          (iv) a person registered as a broker 
                        or dealer under the Securities Exchange 
                        Act of 1934 (15 U.S.C. 78a et seq.),
                          (v) an affiliate of a person 
                        described in any of clauses (i) through 
                        (iv), or
                          (vi) an employee, agent, or 
                        registered representative of a person 
                        described in clauses (i) through (v) 
                        who satisfies the requirements of 
                        applicable insurance, banking, and 
                        securities laws relating to the 
                        provision of the advice.
                For purposes of this part, a person who 
                develops the computer model described in 
                paragraph (3)(B) or markets the investment 
                advice program or computer model shall be 
                treated as a person who is a fiduciary of the 
                plan by reason of the provision of investment 
                advice referred to in section 3(21)(A)(ii) to a 
                participant or beneficiary and shall be treated 
                as a fiduciary adviser for purposes of this 
                subsection and subsection (b)(14), except that 
                the Secretary may prescribe rules under which 
                only 1 fiduciary adviser may elect to be 
                treated as a fiduciary with respect to the 
                plan.
                  (B) Affiliate.--The term ``affiliate'' of 
                another entity means an affiliated person of 
                the entity (as defined in section 2(a)(3) of 
                the Investment Company Act of 1940 (15 U.S.C. 
                80a-2(a)(3))).
                  (C) Registered representative.--The term 
                ``registered representative'' of another entity 
                means a person described in section 3(a)(18) of 
                the Securities Exchange Act of 1934 (15 U.S.C. 
                78c(a)(18)) (substituting the entity for the 
                broker or dealer referred to in such section) 
                or a person described in section 202(a)(17) of 
                the Investment Advisers Act of 1940 (15 U.S.C. 
                80b-2(a)(17)) (substituting the entity for the 
                investment adviser referred to in such 
                section).
  (h) Provision of Pharmacy Benefit Services.--
          (1) In general.--Provided that all of the conditions 
        described in paragraph (2) are met, the restrictions 
        imposed by subsections (a), (b)(1), and (b)(2) of 
        section 406 shall not apply to--
                  (A) the offering of pharmacy benefit services 
                to a group health plan that is sponsored by an 
                entity described in section 3(37)(G)(vi) or to 
                any other group health plan that is sponsored 
                by a regional council, local union, or other 
                labor organization affiliated with such entity;
                  (B) the purchase of pharmacy benefit services 
                by plan participants and beneficiaries of a 
                group health plan that is sponsored by an 
                entity described in section 3(37)(G)(vi) or of 
                any other group health plan that is sponsored 
                by a regional council, local union, or other 
                labor organization affiliated with such entity; 
                or
                  (C) the operation or implementation of 
                pharmacy benefit services by an entity 
                described in section 3(37)(G)(vi) or by any 
                other group health plan that is sponsored by a 
                regional council, local union, or other labor 
                organization affiliated with such entity,
        in any arrangement where such entity described in 
        section 3(37)(G)(vi) or any related organization or 
        subsidiary of such entity provides pharmacy benefit 
        services that include prior authorization and appeals, 
        a retail pharmacy network, pharmacy benefit 
        administration, mail order fulfillment, formulary 
        support, manufacturer payments, audits, and specialty 
        pharmacy and goods, to any such group health plan.
          (2) Conditions.--The conditions described in this 
        paragraph are the following:
                  (A) The terms of the arrangement are at least 
                as favorable to the group health plan as such 
                group health plan could obtain in a similar 
                arm's length arrangement with an unrelated 
                third party.
                  (B) At least 50 percent of the providers 
                participating in the pharmacy benefit services 
                offered by the arrangement are unrelated to the 
                contributing employers or any other party in 
                interest with respect to the group health plan.
                  (C) The group health plan retains an 
                independent fiduciary who will be responsible 
                for monitoring the group health plan's 
                consultants, contractors, subcontractors, and 
                other service providers for purposes of 
                pharmacy benefit services described in 
                paragraph (1) offered by such entity or any of 
                its related organizations or subsidiaries and 
                monitors the transactions of such entity and 
                any of its related organizations or 
                subsidiaries to ensure that all conditions of 
                this exemption are satisfied during each plan 
                year.
                  (D) Any decisions regarding the provision of 
                pharmacy benefit services described in 
                paragraph (1) are made by the group health 
                plan's independent fiduciary, based on 
                objective standards developed by the 
                independent fiduciary in reliance on 
                information provided by the arrangement.
                  (E) The independent fiduciary of the group 
                health plan provides an annual report to the 
                Secretary and the congressional committees of 
                jurisdiction attesting that the conditions 
                described in subparagraphs (C) and (D) have 
                been met for the applicable plan year, together 
                with a statement that use of the arrangement's 
                services are in the best interest of the 
                participants and beneficiaries in the aggregate 
                for that plan year compared to other similar 
                arrangements the group health plan could have 
                obtained in transactions with an unrelated 
                third party.
                  (F) The arrangement is not designed to 
                benefit any party in interest with respect to 
                the group health plan.
          (3) Violations.--In the event an entity described in 
        section 3(37)(G)(vi) or any affiliate of such entity 
        violates any of the conditions of such exemption, such 
        exemption shall not apply with respect to such entity 
        or affiliate and all enforcement and claims available 
        under this Act shall apply with respect to such entity 
        or affiliate.
          (4) Rule of construction.--Nothing in this subsection 
        shall be construed to modify any obligation of a group 
        health plan otherwise set forth in this Act.
          (5) Group health plan.--In this subsection, the term 
        ``group health plan'' has the meaning given such term 
        in section 733(a).

           *       *       *       *       *       *       *


                   EXCULPATORY PROVISIONS; INSURANCE

  Sec. 410. (a) Except as provided in sections 405(b)(1) and 
405(d), any provision in an agreement or instrument which 
purports to relieve a fiduciary from responsibility or 
liability for any responsibility, obligation, or duty under 
this part shall be void as against public policy.
  (b) Nothing in this subpart shall preclude--
          (1) a plan from purchasing insurance for its 
        fiduciaries or for itself to cover liability or losses 
        occurring by reason of the act or omission of a 
        fiduciary, if such insurance permits recourse by the 
        insurer against the fiduciary in the case of a breach 
        of a fiduciary obligation by such fiduciary;
          (2) a fiduciary from purchasing insurance to cover 
        liability under this part from and for his own account; 
        or
          (3) an employer or an employee organization from 
        purchasing insurance to cover potential liability of 
        one or more persons who serve in a fiduciary capacity 
        with regard to an employee benefit plan.
  (c) Any provision in an agreement or instrument shall be void 
as against public policy if such provision--
          (1) unduly delays or limits a plan fiduciary from 
        accessing the de-identified claims and encounter 
        information or data described in section 724(a)(1)(B); 
        or
          (2) violates the requirements of section 
        408(b)(2)(C).

           *       *       *       *       *       *       *


Part 5--Administration and Enforcement

           *       *       *       *       *       *       *



                           civil enforcement

  Sec. 502. (a) A civil action may be brought--
          (1) by a participant or beneficiary--
                  (A) for the relief provided for in subsection 
                (c) of this section, or
                  (B) to recover benefits due to him under the 
                terms of his plan, to enforce his rights under 
                the terms of the plan, or to clarify his rights 
                to future benefits under the terms of the plan;
          (2) by the Secretary, or by a participant, 
        beneficiary or fiduciary for appropriate relief under 
        section 409;
          (3) by a participant, beneficiary, or fiduciary (A) 
        to enjoin any act or practice which violates any 
        provision of this title or the terms of the plan, or 
        (B) to obtain other appropriate equitable relief (i) to 
        redress such violations or (ii) to enforce any 
        provisions of this title or the terms of the plan;
          (4) by the Secretary, or by a participant, or 
        beneficiary for appropriate relief in the case of a 
        violation of section 105(c) or 113(a);
          (5) except as otherwise provided in subsection (b), 
        by the Secretary (A) to enjoin any act or practice 
        which violates any provision of this title, or (B) to 
        obtain other appropriate equitable relief (i) to 
        redress such violation or (ii) to enforce any provision 
        of this title;
          (6) by the Secretary to collect any civil penalty 
        under paragraph (2), (4), (5), (6), (7), (8), [or (9)] 
        (9), or (13) of subsection (c) or under subsection (i) 
        or (l);
          (7) by a State to enforce compliance with a qualified 
        medical child support order (as defined in section 
        609(a)(2)(A));
          (8) by the Secretary, or by an employer or other 
        person referred to in section 101(f)(1), (A) to enjoin 
        any act or practice which violates subsection (f) of 
        section 101, or (B) to obtain appropriate equitable 
        relief (i) to redress such violation or (ii) to enforce 
        such subsection;
          (9) in the event that the purchase of an insurance 
        contract or insurance annuity in connection with 
        termination of an individual's status as a participant 
        covered under a pension plan with respect to all or any 
        portion of the participant's pension benefit under such 
        plan constitutes a violation of part 4 of this title or 
        the terms of the plan, by the Secretary, by any 
        individual who was a participant or beneficiary at the 
        time of the alleged violation, or by a fiduciary, to 
        obtain appropriate relief, including the posting of 
        security if necessary, to assure receipt by the 
        participant or beneficiary of the amounts provided or 
        to be provided by such insurance contract or annuity, 
        plus reasonable prejudgment interest on such amounts;
          (10) in the case of a multiemployer plan that has 
        been certified by the actuary to be in endangered or 
        critical status under section 305, if the plan 
        sponsor--
                  (A) has not adopted a funding improvement or 
                rehabilitation plan under that section by the 
                deadline established in such section, or
                  (B) fails to update or comply with the terms 
                of the funding improvement or rehabilitation 
                plan in accordance with the requirements of 
                such section,
        by an employer that has an obligation to contribute 
        with respect to the multiemployer plan or an employee 
        organization that represents active participants in the 
        multiemployer plan, for an order compelling the plan 
        sponsor to adopt a funding improvement or 
        rehabilitation plan or to update or comply with the 
        terms of the funding improvement or rehabilitation plan 
        in accordance with the requirements of such section and 
        the funding improvement or rehabilitation plan; or
          (11) in the case of a multiemployer plan, by an 
        employee representative, or any employer that has an 
        obligation to contribute to the plan, (A) to enjoin any 
        act or practice which violates subsection (k) of 
        section 101 (or, in the case of an employer, subsection 
        (l) of such section), or (B) to obtain appropriate 
        equitable relief (i) to redress such violation or (ii) 
        to enforce such subsection.
  (b)(1) In the case of a plan which is qualified under section 
401(a), 403(a), or 405(a) of the Internal Revenue Code of 1986 
(or with respect to which an application to so qualify has been 
filed and has not been finally determined) the Secretary may 
exercise his authority under subsection (a)(5) with respect to 
a violation of, or the enforcement of, parts 2 and 3 of this 
subtitle (relating to participation, vesting, and funding), 
only if--
          (A) requested by the Secretary of the Treasury, or
          (B) one or more participants, beneficiaries, or 
        fiduciaries, of such plan request in writing (in such 
        manner as the Secretary shall prescribe by regulation) 
        that he exercise such authority on their behalf. In the 
        case of such a request under this paragraph he may 
        exercise such authority only if he determines that such 
        violation affects, or such enforcement is necessary to 
        protect, claims of participants or beneficiaries to 
        benefits under the plan.
  (2) The Secretary shall not initiate an action to enforce 
section 515.
  (3) Except as provided in subsections (c)(9) and (a)(6) (with 
respect to collecting civil penalties under subsection (c)(9)), 
the Secretary is not authorized to enforce under this part any 
requirement of part 7 against a health insurance issuer 
offering health insurance coverage in connection with a group 
health plan (as defined in section 706(a)(1)). Nothing in this 
paragraph shall affect the authority of the Secretary to issue 
regulations to carry out such part.
  (c)(1) Any administrator (A) who fails to meet the 
requirements of paragraph (1) or (4) of section 606, section 
101(e)(1), section 101(f),, section 105(a), or section 113(a) 
with respect to a participant or beneficiary, or (B) who fails 
or refuses to comply with a request for any information which 
such administrator is required by this title to furnish to a 
participant or beneficiary (unless such failure or refusal 
results from matters reasonably beyond the control of the 
administrator) by mailing the material requested to the last 
known address of the requesting participant or beneficiary 
within 30 days after such request may in the court's discretion 
be personally liable to such participant or beneficiary in the 
amount of up to $100 a day from the date of such failure or 
refusal, and the court may in its discretion order such other 
relief as it deems proper. For purposes of this paragraph, each 
violation described in subparagraph (A) with respect to any 
single participant, and each violation described in 
subparagraph (B) with respect to any single participant or 
beneficiary, shall be treated as a separate violation.
  (2) The Secretary may assess a civil penalty against any plan 
administrator of up to $1,000 a day from the date of such plan 
administrator's failure or refusal to file the annual report 
required to be filed with the Secretary under section 
101(b)(1). For purposes of this paragraph, an annual report 
that has been rejected under section 104(a)(4) for failure to 
provide material information shall not be treated as having 
been filed with the Secretary.
  (3) Any employer maintaining a plan who fails to meet the 
notice requirement of section 101(d) with respect to any 
participant or beneficiary or who fails to meet the 
requirements of section 101(e)(2) with respect to any person or 
who fails to meet the requirements of section 302(d)(12)(E) 
with respect to any person may in the court's discretion be 
liable to such participant or beneficiary or to such person in 
the amount of up to $100 a day from the date of such failure, 
and the court may in its discretion order such other relief as 
it deems proper.
  (4) The Secretary may assess a civil penalty of not more than 
$1,000 a day for each violation by any person of subsection 
(j), (k), or (l) of section 101 or section 514(e)(3).
  (5) The Secretary may assess a civil penalty against any 
person of up to $1,000 a day from the date of the person's 
failure or refusal to file the information required to be filed 
by such person with the Secretary under regulations prescribed 
pursuant to section 101(g).
  (6) If, within 30 days of a request by the Secretary to a 
plan administrator for documents under section 104(a)(6), the 
plan administrator fails to furnish the material requested to 
the Secretary, the Secretary may assess a civil penalty against 
the plan administrator of up to $100 a day from the date of 
such failure (but in no event in excess of $1,000 per request). 
No penalty shall be imposed under this paragraph for any 
failure resulting from matters reasonably beyond the control of 
the plan administrator.
  (7) The Secretary may assess a civil penalty against a plan 
administrator of up to $100 a day from the date of the plan 
administrator's failure or refusal to provide notice to 
participants and beneficiaries in accordance with subsection 
(i) or (m) of section 101. For purposes of this paragraph, each 
violation with respect to any single participant or beneficiary 
shall be treated as a separate violation.
          (8) The Secretary may assess against any plan sponsor 
        of a multiemployer plan a civil penalty of not more 
        than $1,100 per day--
                  (A) for each violation by such sponsor of the 
                requirement under section 305 to adopt by the 
                deadline established in that section a funding 
                improvement plan or rehabilitation plan with 
                respect to a multiemployer plan which is in 
                endangered or critical status, or
                  (B) in the case of a plan in endangered 
                status which is not in seriously endangered 
                status, for failure by the plan to meet the 
                applicable benchmarks under section 305 by the 
                end of the funding improvement period with 
                respect to the plan.
  (9)(A) The Secretary may assess a civil penalty against any 
employer of up to $100 a day from the date of the employer's 
failure to meet the notice requirement of section 
701(f)(3)(B)(i)(I). For purposes of this subparagraph, each 
violation with respect to any single employee shall be treated 
as a separate violation.
  (B) The Secretary may assess a civil penalty against any plan 
administrator of up to $100 a day from the date of the plan 
administrator's failure to timely provide to any State the 
information required to be disclosed under section 
701(f)(3)(B)(ii). For purposes of this subparagraph, each 
violation with respect to any single participant or beneficiary 
shall be treated as a separate violation.
          (10) Secretarial enforcement authority relating to 
        use of genetic information.--
                  (A) General rule.--The Secretary may impose a 
                penalty against any plan sponsor of a group 
                health plan, or any health insurance issuer 
                offering health insurance coverage in 
                connection with the plan, for any failure by 
                such sponsor or issuer 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, in connection 
                with the plan.
                  (B) Amount.--
                          (i) In general.--The amount of the 
                        penalty imposed by subparagraph (A) 
                        shall be $100 for each day in the 
                        noncompliance period with respect to 
                        each participant or beneficiary to whom 
                        such failure relates.
                          (ii) Noncompliance period.--For 
                        purposes of this paragraph, the term 
                        ``noncompliance period'' means, with 
                        respect to any failure, the period--
                                  (I) beginning on the date 
                                such failure first occurs; and
                                  (II) ending on the date the 
                                failure is corrected.
                  (C) Minimum penalties where failure 
                discovered.--Notwithstanding clauses (i) and 
                (ii) of subparagraph (D):
                          (i) In general.--In the case of 1 or 
                        more failures with respect to a 
                        participant or beneficiary--
                                  (I) which are not corrected 
                                before the date on which the 
                                plan receives a notice from the 
                                Secretary of such violation; 
                                and
                                  (II) which occurred or 
                                continued during the period 
                                involved;
                        the amount of penalty imposed by 
                        subparagraph (A) by reason of such 
                        failures with respect to such 
                        participant or beneficiary shall not be 
                        less than $2,500.
                          (ii) Higher minimum penalty where 
                        violations are more than de minimis.--
                        To the extent violations for which any 
                        person is liable under this paragraph 
                        for any year are more than de minimis, 
                        clause (i) shall be applied by 
                        substituting ``$15,000'' for ``$2,500'' 
                        with respect to such person.
                  (D) Limitations.--
                          (i) Penalty not to apply where 
                        failure not discovered exercising 
                        reasonable diligence.--No penalty shall 
                        be imposed by subparagraph (A) on any 
                        failure during any period for which it 
                        is established to the satisfaction of 
                        the Secretary that the person otherwise 
                        liable for such penalty did not know, 
                        and exercising reasonable diligence 
                        would not have known, that such failure 
                        existed.
                          (ii) Penalty not to apply to failures 
                        corrected within certain periods.--No 
                        penalty shall be imposed by 
                        subparagraph (A) on any failure if--
                                  (I) such failure was due to 
                                reasonable cause and not to 
                                willful neglect; and
                                  (II) such failure is 
                                corrected during the 30-day 
                                period beginning on the first 
                                date the person otherwise 
                                liable for such penalty knew, 
                                or exercising reasonable 
                                diligence would have known, 
                                that such failure existed.
                          (iii) Overall limitation for 
                        unintentional failures.--In the case of 
                        failures which are due to reasonable 
                        cause and not to willful neglect, the 
                        penalty imposed by subparagraph (A) for 
                        failures shall not exceed the amount 
                        equal to the lesser of--
                                  (I) 10 percent of the 
                                aggregate amount paid or 
                                incurred by the plan sponsor 
                                (or predecessor plan sponsor) 
                                during the preceding taxable 
                                year for group health plans; or
                                  (II) $500,000.
                  (E) Waiver by secretary.--In the case of a 
                failure which is due to reasonable cause and 
                not to willful neglect, the Secretary may waive 
                part or all of the penalty imposed by 
                subparagraph (A) to the extent that the payment 
                of such penalty would be excessive relative to 
                the failure involved.
                  (F) Definitions.--Terms used in this 
                paragraph which are defined in section 733 
                shall have the meanings provided such terms in 
                such section.
  (11) The Secretary and the Secretary of Health and Human 
Services shall maintain such ongoing consultation as may be 
necessary and appropriate to coordinate enforcement under this 
subsection with enforcement under section 1144(c)(8) of the 
Social Security Act.
          (12) The Secretary may assess a civil penalty against 
        any sponsor of a CSEC plan of up to $100 a day from the 
        date of the plan sponsor's failure to comply with the 
        requirements of section 306(j)(3) to establish or 
        update a funding restoration plan.
  (13) In the case of an agreement between a group health plan 
and a health care provider, network or association of 
providers, third-party administrator, pharmacy benefit manager, 
or other service provider that violates the provisions of 
section 724, the Secretary may assess a civil penalty against 
such provider, network or association, third-party 
administrator, pharmacy benefit manager, or other service 
provider in the amount of $10,000 for each day during which 
such violation continues. Such penalty shall be in addition to 
other penalties as may be prescribed by law.
  (d)(1) An employee benefit plan may sue or be sued under this 
title as an entity. Service of summons, subpena, or other legal 
process of a court upon a trustee or an administrator of an 
employee benefit plan in his capacity as such shall constitute 
service upon the employee benefit plan. In a case where a plan 
has not designated in the summary plan description of the plan 
an individual as agent for the service of legal process, 
service upon the Secretary shall constitute such service. The 
Secretary, not later than 15 days after receipt of service 
under the preceding sentence, shall notify the administrator or 
any trustee of the plan of receipt of such service.
  (2) Any money judgment under this title against an employee 
benefit plan shall be enforceable only against the plan as an 
entity and shall not be enforceable against any other person 
unless liability against such person is established in his 
individual capacity under this title.
  (e)(1) Except for actions under subsection (a)(1)(B) of this 
section, the district courts of the United States shall have 
exclusive jurisdiction of civil actions under this title 
brought by the Secretary or by a participant, beneficiary, 
fiduciary, or any person referred to in section 101(f)(1). 
State courts of competent jurisdiction and district courts of 
the United States shall have concurrent jurisdiction of actions 
under paragraphs (1)(B) and (7) of subsection (a) of this 
section.
  (2) Where an action under this title is brought in a district 
court of the United States, it may be brought in the district 
where the plan is administered, where the breach took place, or 
where a defendant resides or may be found, and process may be 
served in any other district where a defendant resides or may 
be found.
  (f) The district courts of the United States shall have 
jurisdiction, without respect to the amount in controversy or 
the citizenship of the parties, to grant the relief provided 
for in subsection (a) of this section in any action.
  (g)(1) In any action under this title (other than an action 
described in paragraph (2)) by a participant, beneficiary, or 
fiduciary, the court in its discretion may allow a reasonable 
attorney's fee and costs of action to either party.
  (2) In any action under this title by a fiduciary for or on 
behalf of a plan to enforce section 515 in which a judgment in 
favor of the plan is awarded, the court shall award the plan--
          (A) the unpaid contributions,
          (B) interest on the unpaid contributions,
          (C) an amount equal to the greater of--
                  (i) interest on the unpaid contributions, or
                  (ii) liquidated damages provided for under 
                the plan in an amount not in excess of 20 
                percent (or such higher percentage as may be 
                permitted under Federal or State law) of the 
                amount determined by the court under 
                subparagraph (A),
          (D) reasonable attorney's fees and costs of the 
        action, to be paid by the defendant, and
          (E) such other legal or equitable relief as the court 
        deems appropriate.
For purposes of this paragraph, interest on unpaid 
contributions shall be determined by using the rate provided 
under the plan, or, if none, the rate prescribed under section 
6621 of the Internal Revenue Code of 1986.
  (h) A copy of the complaint in any action under this title by 
a participant, beneficiary, or fiduciary (other than an action 
brought by one or more participants or beneficiaries under 
subsection (a)(1)(B) which is solely for the purpose of 
recovering benefits due such participants under the terms of 
the plan) shall be served upon the Secretary and the Secretary 
of the Treasury by certified mail. Either Secretary shall have 
the right in his discretion to intervene in any action, except 
that the Secretary of the Treasury may not intervene in any 
action under part 4 of this subtitle. If the Secretary brings 
an action under subsection (a) on behalf of a participant or 
beneficiary, he shall notify the Secretary of the Treasury.
  (i) In the case of a transaction prohibited by section 406 by 
a party in interest with respect to a plan to which this part 
applies, the Secretary may assess a civil penalty against such 
party in interest. The amount of such penalty may not exceed 5 
percent of the amount involved in each such transaction (as 
defined in section 4975(f)(4) of the Internal Revenue Code of 
1986) for each year or part thereof during which the prohibited 
transaction continues, except that, if the transaction is not 
corrected (in such manner as the Secretary shall prescribe in 
regulations which shall be consistent with section 4975(f)(5) 
of such Code) within 90 days after notice from the Secretary 
(or such longer period as the Secretary may permit), such 
penalty may be in an amount not more than 100 percent of the 
amount involved. This subsection shall not apply to a 
transaction with respect to a plan described in section 
4975(e)(1) of such Code.
  (j) In all civil actions under this title, attorneys 
appointed by the Secretary may represent the Secretary (except 
as provided in section 518(a) of title 28, United States Code), 
but all such litigation shall be subject to the direction and 
control of the Attorney General.
  (k) Suits by an administrator, fiduciary, participant, or 
beneficiary of an employee benefit plan to review a final order 
of the Secretary, to restrain the Secretary from taking any 
action contrary to the provisions of this Act, or to compel him 
to take action required under this title, may be brought in the 
district court of the United States for the district where the 
plan has its principal office, or in the United States District 
Court for the District of Columbia.
  (l)(1) In the case of--
          (A) any breach of fiduciary responsibility under (or 
        other violation of) part 4 by a fiduciary, or
          (B) any knowing participation in such a breach or 
        violation by any other person,
the Secretary shall assess a civil penalty against such 
fiduciary or other person in an amount equal to 20 percent of 
the applicable recovery amount.
  (2) For purposes of paragraph (1), the term ``applicable 
recovery amount'' means any amount which is recovered from a 
fiduciary or other person with respect to a breach or violation 
described in paragraph (1)--
          (A) pursuant to any settlement agreement with the 
        Secretary, or
          (B) ordered by a court to be paid by such fiduciary 
        or other person to a plan or its participants and 
        beneficiaries in a judicial proceeding instituted by 
        the Secretary under subsection (a)(2) or (a)(5).
  (3) The Secretary may, in the Secretary's sole discretion, 
waive or reduce the penalty under paragraph (1) if the 
Secretary determines in writing that--
          (A) the fiduciary or other person acted reasonably 
        and in good faith, or
          (B) it is reasonable to expect that the fiduciary or 
        other person will not be able to restore all losses to 
        the plan (or to provide the relief ordered pursuant to 
        subsection (a)(9)) without severe financial hardship 
        unless such waiver or reduction is granted.
  (4) The penalty imposed on a fiduciary or other person under 
this subsection with respect to any transaction shall be 
reduced by the amount of any penalty or tax imposed on such 
fiduciary or other person with respect to such transaction 
under subsection (i) of this section and section 4975 of the 
Internal Revenue Code of 1986.
  (m) In the case of a distribution to a pension plan 
participant or beneficiary in violation of section 206(e) by a 
plan fiduciary, the Secretary shall assess a penalty against 
such fiduciary in an amount equal to the value of the 
distribution. Such penalty shall not exceed $10,000 for each 
such distribution.

           *       *       *       *       *       *       *


Part 7--Group Health Plan Requirements

           *       *       *       *       *       *       *



Subpart B--Other Requirements

           *       *       *       *       *       *       *



SEC. 724. INCREASING TRANSPARENCY BY REMOVING GAG CLAUSES ON PRICE AND 
                    QUALITY INFORMATION.

  (a) Increasing Price and Quality Transparency for Plan 
Sponsors and Consumers.--
          (1) In general.--A group health plan (or an issuer of 
        health insurance coverage offered in connection with 
        such a plan) may not enter into an agreement with a 
        health care provider, network or association of 
        providers, third-party administrator, or other service 
        provider offering access to a network of providers that 
        would directly or indirectly restrict a group health 
        plan or health insurance issuer offering such coverage 
        from--
                  (A) providing provider-specific cost or 
                quality of care information or data, through a 
                consumer engagement tool or any other means, to 
                referring providers, the plan sponsor, 
                participants or beneficiaries, or individuals 
                eligible to become participants or 
                beneficiaries of the plan or coverage;
                  (B) electronically accessing de-identified 
                claims and encounter information or data for 
                each participant or beneficiary in the plan or 
                coverage, upon request and consistent with the 
                privacy regulations promulgated pursuant to 
                section 264(c) of the Health Insurance 
                Portability and Accountability Act of 1996, the 
                amendments made by the Genetic Information 
                Nondiscrimination Act of 2008, and the 
                Americans with Disabilities Act of 1990, 
                including, on a per claim basis--
                          (i) financial information, such as 
                        the allowed amount, or any other claim-
                        related financial obligations included 
                        in the provider contract;
                          (ii) provider information, including 
                        name and clinical designation;
                          (iii) service codes; or
                          (iv) any other data element included 
                        in claim or encounter transactions; or
                  (C) sharing information or data described in 
                subparagraph (A) or (B), or directing that such 
                data be shared, with a business associate as 
                defined in section 160.103 of title 45, Code of 
                Federal Regulations (or successor regulations), 
                consistent with the privacy regulations 
                promulgated pursuant to section 264(c) of the 
                Health Insurance Portability and Accountability 
                Act of 1996, the amendments made by the Genetic 
                Information Nondiscrimination Act of 2008, and 
                the Americans with Disabilities Act of 1990.
          (2) Clarification regarding public disclosure of 
        information.--Nothing in paragraph (1)(A) prevents a 
        health care provider, network or association of 
        providers, or other service provider from placing 
        reasonable restrictions on the public disclosure of the 
        information described in such paragraph (1).
          [(3) Attestation.--A group health plan (or health 
        insurance coverage offered in connection with such a 
        plan) shall annually submit to the Secretary an 
        attestation that such plan or issuer of such coverage 
        is in compliance with the requirements of this 
        subsection.]
          (3) Attestation.--
                  (A) In general.--Subject to subparagraph (C), 
                the fiduciary of a group health plan or issuer 
                offering group health insurance coverage shall 
                annually submit to the Secretary an attestation 
                that such plan or issuer of such coverage is in 
                compliance with the requirements of this 
                subsection. Such attestation shall also include 
                a statement verifying that--
                          (i) the information or data described 
                        under subparagraphs (A) and (B) of 
                        paragraph (1) is available upon request 
                        and provided to the plan fiduciary, the 
                        plan administrator, or the issuer in a 
                        timely manner; and
                          (ii) there are no terms in the 
                        agreement under such paragraph (1) that 
                        directly or indirectly restrict or 
                        unduly delay a plan fiduciary, the plan 
                        administrator, or the issuer from 
                        auditing, reviewing, or otherwise 
                        accessing such information.
                  (B) Limitation on submission.--Subject to 
                clause (ii), a group health plan or issuer 
                offering group health insurance coverage may 
                not enter into an agreement with a third-party 
                administrator or other service provider to 
                submit the attestation required under 
                subparagraph (A).
                  (C) Exception.--In the case of a group health 
                plan or issuer offering group health insurance 
                coverage that is unable to obtain the 
                information or data needed to submit the 
                attestation required under subparagraph (A), 
                such plan or issuer may submit a written 
                statement in lieu of such attestation that 
                includes--
                          (i) an explanation of why such plan 
                        or issuer was unsuccessful in obtaining 
                        such information or data, including 
                        whether such plan or issuer was limited 
                        or prevented from auditing, reviewing, 
                        or otherwise accessing such information 
                        or data;
                          (ii) a description of the efforts 
                        made by the plan fiduciary to remove 
                        any gag clause provisions from the 
                        agreement under paragraph (1); and
                          (iii) a description of any response 
                        by the third-party administrator or 
                        other service provider with respect to 
                        efforts to comply with the attestation 
                        requirement under subparagraph (A).
          (4) Rules of construction.--Nothing in this section 
        shall be construed to modify or eliminate existing 
        privacy protections and standards under State and 
        Federal law. Nothing in this subsection shall be 
        construed to otherwise limit access by a group health 
        plan, plan sponsor, or health insurance issuer to data 
        as permitted under the privacy regulations promulgated 
        pursuant to section 264(c) of the Health Insurance 
        Portability and Accountability Act of 1996, the 
        amendments made by the Genetic Information 
        Nondiscrimination Act of 2008, and the Americans with 
        Disabilities Act of 1990.

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