No official summary available for this bill.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6501 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 6501
To amend the Internal Revenue Code of 1986 to extend and modify the
enhanced premium tax credit, to amend the Patient Protection and
Affordable Care Act to make certain adjustments to the operation of the
Exchanges established under such Act, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 9, 2025
Mr. Fitzpatrick (for himself, Mr. Golden of Maine, Mr. Bacon, Mr.
Suozzi, Mr. Bresnahan, Mr. Davis of North Carolina, Ms. Malliotakis,
Ms. Perez, Mr. Lawler, Ms. Salazar, Mr. Mackenzie, Mr. Kean, Mr. Van
Drew, Mr. Valadao, Mr. Ciscomani, and Mr. LaLota) introduced the
following bill; which was referred to the Committee on Energy and
Commerce, and in addition to the Committees on Ways and Means, and
Education and Workforce, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to extend and modify the
enhanced premium tax credit, to amend the Patient Protection and
Affordable Care Act to make certain adjustments to the operation of the
Exchanges established under such Act, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Bipartisan Health Insurance
Affordability Act''.
SEC. 2. EXTENSION AND MODIFICATION OF ENHANCED PREMIUM TAX CREDIT.
(a) Extension and Modification of Rules To Increase Premium
Assistance Amounts.--Section 36B(b)(3)(A)(iii) of the Internal Revenue
Code of 1986 is amended--
(1) by redesignating subclauses (I) and (II) as items (aa)
and (bb), respectively, and adjusting the margins accordingly,
(2) by striking ``Temporary percentages for 2021 through
2025.--In the case of'' and inserting ``Temporary rules for
certain years.--
``(I) Before 2026.--In the case
of'', and
(3) by adding at the end the following:
``(II) After 2025 for taxpayers
whose household income does not exceed
150 percent of poverty line.--In the
case of a taxable year beginning after
December 31, 2025, and before January
1, 2028, if any taxpayer's household
income does not exceed 150 percent of
the poverty line for such taxable year,
the premium assistance amount
determined under subsection (b)(2),
with respect to any coverage month, is
the excess of the lesser of the amount
described in paragraph (2)(A) or the
amount described in paragraph
(2)(B)(i), over $5.
``(III) After 2025 for taxpayers
whose household income does not exceed
200 percent of poverty line.--In the
case of a taxable year beginning after
December 31, 2025, and before January
1, 2028, if any taxpayer's household
income exceeds 150 percent of the
poverty line but does not exceed 200
percent of the poverty line for such
taxable year, the premium assistance
amount determined under subsection
(b)(2), with respect to any coverage
month, shall be such that the premium
assistance amount for such a taxpayer
shall decrease, on a sliding scale in a
linear manner, from the amount that
would result if determined in
accordance with subclause (II) to the
amount that would result under
subsection (b)(2) by substituting `2
percent' for `the applicable
percentage' in subparagraph (B)(ii)
thereof.
``(IV) After 2025 for taxpayers
whose household income exceeds 200
percent of poverty line.--In the case
of a taxable year beginning after
December 31, 2025, and before January
1, 2028, if any taxpayer's household
income exceeds 200 percent of the
poverty line for such taxable year--
``(aa) clause (ii) shall
not apply for purposes of
adjusting premium percentages
under this subparagraph, and
``(bb) the following table
shall be applied in lieu of the
table contained in clause (i):
----------------------------------------------------------------------------------------------------------------
The initial The final
``In the case of household income (expressed as a percent of poverty line) within the premium premium
following income tier: percentage percentage
is- is-
----------------------------------------------------------------------------------------------------------------
200% up to 250% 2.0% 4.0%
250% up to 300% 4.0% 6.0%
300% up to 400% 6.0% 8.5%
400% up to 600% 8.5% 8.5%
600% up to 700% 8.5% 9.25%''.
----------------------------------------------------------------------------------------------------------------
(b) Extension and Modification of Rule To Allow Credit to Taxpayers
Whose Household Income Exceeds 400 Percent of Poverty Line.--Section
36B(c)(1)(E) of such Code is amended--
(1) by striking ``Temporary rule for 2021 through 2025.--In
the case of'' and inserting ``Temporary rule for certain
years.--
``(i) Before 2026.--In the case of'', and
(2) by adding at the end the following:
``(ii) After 2025.--In the case of a
taxable year beginning after December 31, 2025,
and before January 1, 2028, subparagraph (A)
shall be applied by substituting `but does not
exceed 700 percent' for `but does not exceed
400 percent'.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
SEC. 3. GUARDRAILS TO PREVENT FRAUD IN EXCHANGES.
(a) Reduction of Fraudulent Enrollment in Qualified Health Plans.--
(1) Penalties for agents and brokers.--Section 1411(h)(1)
of the Patient Protection and Affordable Care Act (42 U.S.C.
18081(h)(1)) is amended--
(A) in subparagraph (A)--
(i) by redesignating clause (ii) as clause
(iv);
(ii) in clause (i)--
(I) in the matter preceding
subclause (I), by striking ``If--'' and
all that follows through the ``such
person'' in the matter following
subclause (II) and inserting the
following: ``If any person (other than
an agent or broker) fails to provide
correct information under subsection
(b) and such failure is attributable to
negligence or disregard of any rules or
regulations of the Secretary, such
person''; and
(II) in the second sentence, by
striking ``For purposes'' and inserting
the following:
``(iii) Definitions of negligence,
disregard.--For purposes'';
(iii) by inserting after clause (i) the
following:
``(ii) Civil penalties for certain
violations by agents or brokers.--If any agent
or broker fails to provide correct information
under subsection (b) or section 1311(c)(8) or
other information, as specified by the
Secretary, and such failure is attributable to
negligence or disregard of any rules or
regulations of the Secretary, such agent or
broker shall be subject, in addition to any
other penalties that may be prescribed by law,
including subparagraph (C), to a civil penalty
of not less than $10,000 and not more than
$50,000 with respect to each individual who is
the subject of an application for which such
incorrect information is provided.''; and
(iv) in clause (iv) (as so redesignated),
by inserting ``or (ii)'' after ``clause (i)'';
(B) in subparagraph (B)--
(i) by inserting ``including subparagraph
(C),'' after ``law,'';
(ii) by striking ``Any person'' and
inserting the following:
``(i) In general.--Any person''; and
(iii) by adding at the end the following:
``(ii) Civil penalties for knowing
violations by agents or brokers.--
``(I) In general.--Any agent or
broker who knowingly provides false or
fraudulent information under subsection
(b) or section 1311(c)(8), or other
false or fraudulent information as part
of an application for enrollment in a
qualified health plan offered through
an Exchange, as specified by the
Secretary, shall be subject, in
addition to any other penalties that
may be prescribed by law, including
subparagraph (C), to a civil penalty of
not more than $200,000 with respect to
each individual who is the subject of
an application for which such false or
fraudulent information is provided.
``(II) Procedure.--The provisions
of section 1128A of the Social Security
Act (other than subsections (a) and (b)
of such section) shall apply to a civil
monetary penalty under subclause (I) in
the same manner as such provisions
apply to a penalty or proceeding under
section 1128A of the Social Security
Act.''; and
(C) by adding at the end the following:
``(C) Criminal penalties.--Any agent or broker who
knowingly and willfully provides false or fraudulent
information under subsection (b) or section 1311(c)(8),
or other false or fraudulent information as part of an
application for enrollment in a qualified health plan
offered through an Exchange, as specified by the
Secretary, shall be fined under title 18, United States
Code, imprisoned for not more than 10 years, or
both.''.
(2) Consumer protections.--
(A) In general.--Section 1311(c) of the Patient
Protection and Affordable Care Act (42 U.S.C. 18031(c))
is amended by adding at the end the following new
paragraph:
``(8) Agent- or broker-assisted enrollment in qualified
health plans in certain exchanges.--
``(A) In general.--For plan years beginning on or
after such date specified by the Secretary, but not
later than January 1, 2029, in the case of an Exchange
that the Secretary operates pursuant to section
1321(c)(1), the Secretary shall establish a
verification process for new enrollments of individuals
in, and changes in coverage for individuals under, a
qualified health plan offered through such Exchange,
which are submitted by an agent or broker in accordance
with section 1312(e) and for which the agent or broker
is eligible to receive a commission.
``(B) Requirements.--The enrollment verification
process under subparagraph (A) shall include--
``(i) a requirement that the agent or
broker provide with the new enrollment or
coverage change such documentation or evidence
(such as a standardized consent form) or other
sources as the Secretary determines necessary
to establish that the agent or broker has the
consent of the individual for the new
enrollment or coverage change;
``(ii) a requirement that any commissions
due to a broker or agent for such new
enrollment or coverage change are paid after
the enrollee has resolved all inconsistencies
in accordance with paragraphs (3) and (4) of
section 1411(e);
``(iii) a requirement that the information
required under clause (i) and, as applicable,
the date on which inconsistencies are resolved
as described in clause (ii), is accessible to
the applicable qualified health plan through a
database or other resource, as determined by
the Secretary, so that any commissions due to a
broker or agent for such enrollment can be
effectuated at the appropriate time;
``(iv) a requirement that individuals are
notified of any changes to enrollment,
coverage, the agent of record, or premium tax
credits in a timely manner and that such notice
provides plain language instructions on how
individuals can cancel unauthorized activity;
``(v) a requirement that individuals be
able to access their account information on a
website or other technology platform, as
defined by the Secretary, when used to submit
an enrollment or plan change, in lieu of the
Exchange website described in subsection
(d)(4)(C), including information on the agent
of record, the qualified health plan, and when
any changes are made to the agent of record or
the qualified health plan, on a consumer-facing
website or through a toll-free telephone
hotline; and
``(vi) a requirement that the agent or
broker report to the Secretary any third-party
marketing organization or field marketing
organization (as such terms are defined in
section 1312(e)) involved in the chain of
enrollment (as so defined) with respect to such
new enrollment or coverage change.
``(C) Consumer protection.--The Secretary shall
ensure that the enrollment verification process under
subparagraph (A) prioritizes continuity of coverage and
care for individuals, including by not disenrolling
individuals from a qualified health plan without the
consent of the individual, regardless of whether the
broker, agent, or qualified health plan is in violation
of any requirement under this paragraph.''.
(B) Required reporting.--Section 1311(c)(1) of the
Patient Protection and Affordable Care Act (42 U.S.C.
18031(c)(1)) is amended--
(i) in subparagraph (H), by striking
``and'' at the end;
(ii) in subparagraph (I), by striking the
period at the end and inserting ``; and''; and
(iii) by adding at the end the following:
``(J) report to the Secretary the termination (as
defined in section 1312(e)(1)(C)) of an issuer.''.
(3) Authority to regulate field marketing organizations and
third-party marketing organizations.--Section 1312(e) of the
Patient Protection and Affordable Care Act (42 U.S.C. 18032(e))
is amended--
(A) by redesignating paragraphs (1) and (2) as
subclauses (I) and (II), respectively, and adjusting
the margins accordingly;
(B) in subclause (II) (as so redesignated), by
striking the period at the end and inserting ``; and'';
(C) by striking the subsection designation and
heading and all that follows through ``brokers--'' and
inserting the following:
``(e) Regulation of Agents, Brokers, and Certain Marketing
Organizations.--
``(1) Agents, brokers, and certain marketing
organizations.--
``(A) In general.--The Secretary shall establish
procedures under which a State may allow--
``(i) agents or brokers--''; and
(D) by adding at the end the following:
``(ii) field marketing organizations and
third-party marketing organizations to
participate in the chain of enrollment for an
individual with respect to qualified health
plans offered through an Exchange.
``(B) Criteria.--For plan years beginning on or
after such date specified by the Secretary, but not
later than January 1, 2029, the Secretary, by
regulation, shall establish criteria for States to use
in determining whether to allow agents and brokers to
enroll individuals and employers in qualified health
plans as described in subclause (I) of subparagraph
(A)(i) and to assist individuals as described in
subclause (II) of such subparagraph and field marketing
organizations and third-party marketing organizations
to participate in the chain of enrollment as described
in subparagraph (A)(ii). Such criteria shall, at a
minimum, require that--
``(i) an agent or broker act in accordance
with a standard of conduct that includes a duty
of such agent or broker to act in the best
interests of the enrollee;
``(ii) a field marketing organization or
third-party marketing organization agree to
report the termination of an agent or broker to
the applicable State and the Secretary,
including the reason for termination; and
``(iii) an agent, broker, field marketing
organization, or third-party marketing
organization--
``(I) meet such marketing
requirements as are required by the
Secretary;
``(II) meet marketing requirements
in accordance with other applicable
Federal or State law;
``(III) does not employ practices
that are confusing or misleading, as
determined by the Secretary;
``(IV) submit all marketing
materials to the Secretary for, as
determined appropriate by the
Secretary, review and approval;
``(V) is a licensed agent or broker
or meets other licensure requirements,
as required by the State;
``(VI) register with the Secretary;
and
``(VII) does not compensate any
individual or organization for
referrals or any other service relating
to the sale of, marketing for, or
enrollment in qualified health plans
unless such individual or organization
meets the criteria described in
subclauses (I) through (VI).
``(C) Definitions.--In this paragraph:
``(i) Chain of enrollment.--The term `chain
of enrollment', with respect to enrollment of
an individual in a qualified health plan
offered through an Exchange, means any steps
taken from marketing to such individual, to
such individual making an enrollment decision
with respect to such a plan.
``(ii) Field marketing organization.--The
term `field marketing organization' means an
organization or individual that directly
employs or contracts with agents and brokers,
or contracts with carriers, to provide
functions relating to enrollment of individuals
in qualified health plans offered through an
Exchange as part of the chain of enrollment.
``(iii) Marketing.--The term `marketing'
means the use of marketing materials to provide
information to current and prospective
enrollees in a qualified health plan offered
through an Exchange.
``(iv) Marketing materials.--The term
`marketing materials' means materials relating
to a qualified health plan offered through an
Exchange or benefits offered through an
Exchange that--
``(I) are intended--
``(aa) to draw an
individual's attention to such
plan or the premium tax credits
or cost-sharing reductions for
such plan or plans offered
through an Exchange;
``(bb) to influence an
individual's decision-making
process when selecting a
qualified health plan in which
to enroll; or
``(cc) to influence an
enrollee's decision to stay
enrolled in such plan; and
``(II) include or address content
regarding the benefits, benefit
structure, premiums, or cost sharing of
such plan.
``(v) Termination.--The term `termination',
with respect to a contract or business
arrangement between an agent or broker and a
field marketing organization, third-party
marketing organization, or health insurance
issuer, means--
``(I) the ending of such contract
or business arrangement, either
unilaterally by one of the parties or
on mutual agreement; or
``(II) the expiration of such
contract or business arrangement that
is not replaced by a substantially
similar agreement.
``(vi) Third-party marketing
organization.--The term `third-party marketing
organization' means an organization or
individual that is compensated to perform lead
generation, marketing, or sales relating to
enrollment of individuals in qualified health
plans offered through an Exchange as part of
the chain of enrollment.''.
(4) Transparency.--Section 1312(e) of the Patient
Protection and Affordable Care Act (42 U.S.C. 18032(e)), as
amended by paragraph (3), is further amended by adding at the
end the following new paragraphs:
``(2) Audits.--
``(A) In general.--For plan years beginning on or
after such date specified by the Secretary, but not
later than January 1, 2029, the Secretary, in
coordination with the States and in consultation with
the National Association of Insurance Commissioners,
shall implement a process for the oversight and
enforcement of agent and broker compliance with this
section and other applicable Federal and State law
(including regulations) that shall include--
``(i) periodic audits of agents and brokers
based on--
``(I) complaints filed with the
Secretary by individuals enrolled by
such an agent or broker in a qualified
health plan offered through an
Exchange;
``(II) an incident or enrollment
pattern that suggests fraud; and
``(III) other factors determined by
the Secretary; and
``(ii) a process under which the Secretary
shall share audit results and refer potential
cases of fraud to the relevant State department
of insurance.
``(B) Effect.--Nothing in this paragraph limits or
restricts any referrals made under section 1311(i)(3)
or any enforcement actions under section 1411(h).
``(3) List.--The Secretary shall develop a process to
regularly provide to qualified health plans, Exchanges, and
States a list of suspended and terminated agents and
brokers.''.
(b) Removal of Deceased Individuals From Exchange Plans.--Section
1311(c) of the Patient Protection and Affordable Care Act (42 U.S.C.
18031(c)), as amended by subsection (a), is further amended by adding
at the end the following new paragraph:
``(9) Removal of deceased individuals from exchange
plans.--
``(A) In general.--Not later than 90 days after the
date of the enactment of this paragraph, and on a
quarterly basis thereafter, the Secretary shall conduct
a check of the Death Master File (as such term is
defined in section 203(d) of the Bipartisan Budget Act
of 2013) for purposes of identifying individuals
enrolled in a qualified health plan through an Exchange
who are deceased.
``(B) Process.--The Secretary shall--
``(i) establish a process to verify that an
individual identified pursuant to a check
described in subparagraph (A) is deceased; and
``(ii) require an Exchange to terminate
such individual's enrollment under a qualified
health plan.''.
(c) Standard of Proof for Terminating Agents and Brokers.--Section
1312(e) of the Patient Protection and Affordable Care Act (42 U.S.C.
18032(e)), as amended by subsection (a), is further amended by adding
at the end the following new paragraph:
``(4) Standard for termination for certain exchanges.--In
the case of an agent or broker with an agreement in effect with
an Exchange operated by the Secretary pursuant to section
1321(c) to perform activities described in paragraph (1)(A)(i)
with respect to such Exchange, the Secretary may terminate such
agreement for cause if the Secretary finds, based on a
preponderance of the evidence, that such agent or broker has
violated such agreement, otherwise applicable law, or any other
requirement applicable to such agent or broker.''.
(d) Requirement for Exchange To Notify Individuals of Value of
Premium Tax Credits.--Section 1412(c)(2) of the Patient Protection and
Affordable Care Act (42 U.S.C. 18082(c)(2)) is amended by adding at the
end the following new subparagraph:
``(C) Exchange responsibilities.--Beginning January
1, 2027, if an Exchange is notified under paragraph (1)
of an advance determination under section 1411 with
respect to the eligibility of an individual for a
premium tax credit under section 36B of the Internal
Revenue Code of 1986, the Exchange shall, prior to
enrolling such individual in a qualified health plan,
clearly notify such individual of the amount of such
tax credit.''.
SEC. 4. EXTENDING ANNUAL OPEN ENROLLMENT PERIOD FOR EXCHANGES FOR PLAN
YEAR 2026.
The Secretary of Health and Human Services shall revise section
155.410(e) of title 45, Code of Federal Regulations (or any successor
regulation) to provide that the annual open enrollment period
determined for plan year 2026 pursuant to section 1311(c)(6) of the
Patient Protection and Affordable Care Act (42 U.S.C. 18031(c)(6))
shall begin on November 1, 2025, and end on March 1, 2026.
SEC. 5. MODERNIZING AND ENSURING PBM ACCOUNTABILITY.
(a) In General.--
(1) Prescription drug plans.--Section 1860D-12 of the
Social Security Act (42 U.S.C. 1395w-112) is amended by adding
at the end the following new subsection:
``(h) Requirements Relating to Pharmacy Benefit Managers.--For plan
years beginning on or after January 1, 2029:
``(1) Agreements with pharmacy benefit managers.--Each
contract entered into with a PDP sponsor under this part with
respect to a prescription drug plan offered by such sponsor
shall provide that any pharmacy benefit manager acting on
behalf of such sponsor has a written agreement with the PDP
sponsor under which the pharmacy benefit manager, and any
affiliates of such pharmacy benefit manager, as applicable,
agree to meet the following requirements:
``(A) No income other than bona fide service
fees.--
``(i) In general.--The pharmacy benefit
manager and any affiliate of such pharmacy
benefit manager shall not derive any
remuneration with respect to any services
provided on behalf of any entity or individual,
in connection with the utilization of covered
part D drugs, from any such entity or
individual other than bona fide service fees,
subject to clauses (ii) and (iii).
``(ii) Incentive payments.--For the
purposes of this subsection, an incentive
payment (as determined by the Secretary) paid
by a PDP sponsor to a pharmacy benefit manager
that is performing services on behalf of such
sponsor shall be deemed a `bona fide service
fee' (even if such payment does not otherwise
meet the definition of such term under
paragraph (7)(B)) if such payment is a flat
dollar amount, is consistent with fair market
value (as specified by the Secretary), is
related to services actually performed by the
pharmacy benefit manager or affiliate of such
pharmacy benefit manager, on behalf of the PDP
sponsor making such payment, in connection with
the utilization of covered part D drugs, and
meets additional requirements, if any, as
determined appropriate by the Secretary.
``(iii) Clarification on rebates and
discounts used to lower costs for covered part
d drugs.--Rebates, discounts, and other price
concessions received by a pharmacy benefit
manager or an affiliate of a pharmacy benefit
manager from manufacturers, even if such price
concessions are calculated as a percentage of a
drug's price, shall not be considered a
violation of the requirements of clause (i) if
they are fully passed through to a PDP sponsor
and are compliant with all regulatory and
subregulatory requirements related to direct
and indirect remuneration for manufacturer
rebates under this part, including in cases
where a PDP sponsor is acting as a pharmacy
benefit manager on behalf of a prescription
drug plan offered by such PDP sponsor.
``(iv) Evaluation of remuneration
arrangements.--Components of subsets of
remuneration arrangements (such as fees or
other forms of compensation paid to or retained
by the pharmacy benefit manager or affiliate of
such pharmacy benefit manager), as determined
appropriate by the Secretary, between pharmacy
benefit managers or affiliates of such pharmacy
benefit managers, as applicable, and other
entities involved in the dispensing or
utilization of covered part D drugs (including
PDP sponsors, manufacturers, pharmacies, and
other entities as determined appropriate by the
Secretary) shall be subject to review by the
Secretary, in consultation with the Office of
the Inspector General of the Department of
Health and Human Services, as determined
appropriate by the Secretary. The Secretary, in
consultation with the Office of the Inspector
General, shall review whether remuneration
under such arrangements is consistent with fair
market value (as specified by the Secretary)
through reviews and assessments of such
remuneration, as determined appropriate.
``(v) Disgorgement.--The pharmacy benefit
manager shall disgorge any remuneration paid to
such pharmacy benefit manager or an affiliate
of such pharmacy benefit manager in violation
of this subparagraph to the PDP sponsor.
``(vi) Additional requirements.--The
pharmacy benefit manager shall--
``(I) enter into a written
agreement with any affiliate of such
pharmacy benefit manager, under which
the affiliate shall identify and
disgorge any remuneration described in
clause (v) to the pharmacy benefit
manager; and
``(II) attest, subject to any
requirements determined appropriate by
the Secretary, that the pharmacy
benefit manager has entered into a
written agreement described in
subclause (I) with any relevant
affiliate of the pharmacy benefit
manager.
``(B) Transparency regarding guarantees and cost
performance evaluations.--The pharmacy benefit manager
shall--
``(i) define, interpret, and apply, in a
fully transparent and consistent manner for
purposes of calculating or otherwise evaluating
pharmacy benefit manager performance against
pricing guarantees or similar cost performance
measurements related to rebates, discounts,
price concessions, or net costs, terms such
as--
``(I) `generic drug', in a manner
consistent with the definition of the
term under section 423.4 of title 42,
Code of Federal Regulations, or a
successor regulation;
``(II) `brand name drug', in a
manner consistent with the definition
of the term under section 423.4 of
title 42, Code of Federal Regulations,
or a successor regulation;
``(III) `specialty drug';
``(IV) `rebate'; and
``(V) `discount';
``(ii) identify any drugs, claims, or price
concessions excluded from any pricing guarantee
or other cost performance measure in a clear
and consistent manner; and
``(iii) where a pricing guarantee or other
cost performance measure is based on a pricing
benchmark other than the wholesale acquisition
cost (as defined in section 1847A(c)(6)(B)) of
a drug, calculate and provide a wholesale
acquisition cost-based equivalent to the
pricing guarantee or other cost performance
measure.
``(C) Provision of information.--
``(i) In general.--Not later than July 1 of
each year, beginning in 2029, the pharmacy
benefit manager shall submit to the PDP
sponsor, and to the Secretary, a report, in
accordance with this subparagraph, and shall
make such report available to such sponsor at
no cost to such sponsor in a format specified
by the Secretary under paragraph (5). Each such
report shall include, with respect to such PDP
sponsor and each plan offered by such sponsor,
the following information with respect to the
previous plan year:
``(I) A list of all drugs covered
by the plan that were dispensed
including, with respect to each such
drug--
``(aa) the brand name,
generic or non-proprietary
name, and National Drug Code;
``(bb) the number of plan
enrollees for whom the drug was
dispensed, the total number of
prescription claims for the
drug (including original
prescriptions and refills,
counted as separate claims),
and the total number of dosage
units of the drug dispensed;
``(cc) the number of
prescription claims described
in item (bb) by each type of
dispensing channel through
which the drug was dispensed,
including retail, mail order,
specialty pharmacy, long term
care pharmacy, home infusion
pharmacy, or other types of
pharmacies or providers;
``(dd) the average
wholesale acquisition cost,
listed as cost per day's
supply, cost per dosage unit,
and cost per typical course of
treatment (as applicable);
``(ee) the average
wholesale price for the drug,
listed as price per day's
supply, price per dosage unit,
and price per typical course of
treatment (as applicable);
``(ff) the total out-of-
pocket spending by plan
enrollees on such drug after
application of any benefits
under the plan, including plan
enrollee spending through
copayments, coinsurance, and
deductibles;
``(gg) total rebates paid
by the manufacturer on the drug
as reported under the Detailed
DIR Report (or any successor
report) submitted by such
sponsor to the Centers for
Medicare & Medicaid Services;
``(hh) all other direct or
indirect remuneration on the
drug as reported under the
Detailed DIR Report (or any
successor report) submitted by
such sponsor to the Centers for
Medicare & Medicaid Services;
``(ii) the average pharmacy
reimbursement amount paid by
the plan for the drug in the
aggregate and disaggregated by
dispensing channel identified
in item (cc);
``(jj) the average National
Average Drug Acquisition Cost
(NADAC); and
``(kk) total manufacturer-
derived revenue, inclusive of
bona fide service fees,
attributable to the drug and
retained by the pharmacy
benefit manager and any
affiliate of such pharmacy
benefit manager.
``(II) In the case of a pharmacy
benefit manager that has an affiliate
that is a retail, mail order, or
specialty pharmacy, with respect to
drugs covered by such plan that were
dispensed, the following information:
``(aa) The percentage of
total prescriptions that were
dispensed by pharmacies that
are an affiliate of the
pharmacy benefit manager for
each drug.
``(bb) The interquartile
range of the total combined
costs paid by the plan and plan
enrollees, per dosage unit, per
course of treatment, per 30-day
supply, and per 90-day supply
for each drug dispensed by
pharmacies that are not an
affiliate of the pharmacy
benefit manager and that are
included in the pharmacy
network of such plan.
``(cc) The interquartile
range of the total combined
costs paid by the plan and plan
enrollees, per dosage unit, per
course of treatment, per 30-day
supply, and per 90-day supply
for each drug dispensed by
pharmacies that are an
affiliate of the pharmacy
benefit manager and that are
included in the pharmacy
network of such plan.
``(dd) The lowest total
combined cost paid by the plan
and plan enrollees, per dosage
unit, per course of treatment,
per 30-day supply, and per 90-
day supply, for each drug that
is available from any pharmacy
included in the pharmacy
network of such plan.
``(ee) The difference
between the average acquisition
cost of the affiliate, such as
a pharmacy or other entity that
acquires prescription drugs,
that initially acquires the
drug and the amount reported
under subclause (I)(jj) for
each drug.
``(ff) A list inclusive of
the brand name, generic or non-
proprietary name, and National
Drug Code of covered part D
drugs subject to an agreement
with a covered entity under
section 340B of the Public
Health Service Act for which
the pharmacy benefit manager or
an affiliate of the pharmacy
benefit manager had a contract
or other arrangement with such
a covered entity in the service
area of such plan.
``(III) Where a drug approved under
section 505(c) of the Federal Food,
Drug, and Cosmetic Act (referred to in
this subclause as the `listed drug') is
covered by the plan, the following
information:
``(aa) A list of currently
marketed generic drugs approved
under section 505(j) of the
Federal Food, Drug, and
Cosmetic Act pursuant to an
application that references
such listed drug that are not
covered by the plan, are
covered on the same formulary
tier or a formulary tier
typically associated with
higher cost-sharing than the
listed drug, or are subject to
utilization management that the
listed drug is not subject to.
``(bb) The estimated
average beneficiary cost-
sharing under the plan for a
30-day supply of the listed
drug.
``(cc) Where a generic drug
listed under item (aa) is on a
formulary tier typically
associated with higher cost-
sharing than the listed drug,
the estimated average cost-
sharing that a beneficiary
would have paid for a 30-day
supply of each of the generic
drugs described in item (aa),
had the plan provided coverage
for such drugs on the same
formulary tier as the listed
drug.
``(dd) A written
justification for providing
more favorable coverage of the
listed drug than the generic
drugs described in item (aa).
``(ee) The number of
currently marketed generic
drugs approved under section
505(j) of the Federal Food,
Drug, and Cosmetic Act pursuant
to an application that
references such listed drug.
``(IV) Where a reference product
(as defined in section 351(i) of the
Public Health Service Act) is covered
by the plan, the following information:
``(aa) A list of currently
marketed biosimilar biological
products licensed under section
351(k) of the Public Health
Service Act pursuant to an
application that refers to such
reference product that are not
covered by the plan, are
covered on the same formulary
tier or a formulary tier
typically associated with
higher cost-sharing than the
reference product, or are
subject to utilization
management that the reference
product is not subject to.
``(bb) The estimated
average beneficiary cost-
sharing under the plan for a
30-day supply of the reference
product.
``(cc) Where a biosimilar
biological product listed under
item (aa) is on a formulary
tier typically associated with
higher cost-sharing than the
reference product, the
estimated average cost-sharing
that a beneficiary would have
paid for a 30-day supply of
each of the biosimilar
biological products described
in item (aa), had the plan
provided coverage for such
products on the same formulary
tier as the reference product.
``(dd) A written
justification for providing
more favorable coverage of the
reference product than the
biosimilar biological product
described in item (aa).
``(ee) The number of
currently marketed biosimilar
biological products licensed
under section 351(k) of the
Public Health Service Act,
pursuant to an application that
refers to such reference
product.
``(V) Total gross spending on
covered part D drugs by the plan, not
net of rebates, fees, discounts, or
other direct or indirect remuneration.
``(VI) The total amount retained by
the pharmacy benefit manager or an
affiliate of such pharmacy benefit
manager in revenue related to
utilization of covered part D drugs
under that plan, inclusive of bona fide
service fees.
``(VII) The total spending on
covered part D drugs net of rebates,
fees, discounts, or other direct and
indirect remuneration by the plan.
``(VIII) An explanation of any
benefit design parameters under such
plan that encourage plan enrollees to
fill prescriptions at pharmacies that
are an affiliate of such pharmacy
benefit manager, such as mail and
specialty home delivery programs, and
retail and mail auto-refill programs.
``(IX) The following information:
``(aa) A list of all
brokers, consultants, advisors,
and auditors that receive
compensation from the pharmacy
benefit manager or an affiliate
of such pharmacy benefit
manager for referrals,
consulting, auditing, or other
services offered to PDP
sponsors related to pharmacy
benefit management services.
``(bb) The amount of
compensation provided by such
pharmacy benefit manager or
affiliate to each such broker,
consultant, advisor, and
auditor.
``(cc) The methodology for
calculating the amount of
compensation provided by such
pharmacy benefit manager or
affiliate, for each such
broker, consultant, advisor,
and auditor.
``(X) A list of all affiliates of
the pharmacy benefit manager.
``(XI) A summary document submitted
in a standardized template developed by
the Secretary that includes such
information described in subclauses (I)
through (X).
``(ii) Written explanation of contracts or
agreements with drug manufacturers.--
``(I) In general.--The pharmacy
benefit manager shall, not later than
30 days after the finalization of any
contract or agreement between such
pharmacy benefit manager or an
affiliate of such pharmacy benefit
manager and a drug manufacturer (or
subsidiary, agent, or entity affiliated
with such drug manufacturer) that makes
rebates, discounts, payments, or other
financial incentives related to one or
more covered part D drugs or other
prescription drugs, as applicable, of
the manufacturer directly or indirectly
contingent upon coverage, formulary
placement, or utilization management
conditions on any other covered part D
drugs or other prescription drugs, as
applicable, submit to the PDP sponsor a
written explanation of such contract or
agreement.
``(II) Requirements.--A written
explanation under subclause (I) shall--
``(aa) include the
manufacturer subject to the
contract or agreement, all
covered part D drugs and other
prescription drugs, as
applicable, subject to the
contract or agreement and the
manufacturers of such drugs,
and a high-level description of
the terms of such contract or
agreement and how such terms
apply to such drugs; and
``(bb) be certified by the
Chief Executive Officer, Chief
Financial Officer, or General
Counsel of such pharmacy
benefit manager, or affiliate
of such pharmacy benefit
manager, as applicable, or an
individual delegated with the
authority to sign on behalf of
one of these officers, who
reports directly to the
officer.
``(III) Definition of other
prescription drugs.--For purposes of
this clause, the term `other
prescription drugs' means prescription
drugs covered as supplemental benefits
under this part or prescription drugs
paid outside of this part.
``(D) Audit rights.--
``(i) In general.--Not less than once a
year, at the request of the PDP sponsor, the
pharmacy benefit manager shall allow for an
audit of the pharmacy benefit manager to ensure
compliance with all terms and conditions under
the written agreement described in this
paragraph and the accuracy of information
reported under subparagraph (C).
``(ii) Auditor.--The PDP sponsor shall have
the right to select an auditor. The pharmacy
benefit manager shall not impose any
limitations on the selection of such auditor.
``(iii) Provision of information.--The
pharmacy benefit manager shall make available
to such auditor all records, data, contracts,
and other information necessary to confirm the
accuracy of information provided under
subparagraph (C), subject to reasonable
restrictions on how such information must be
reported to prevent redisclosure of such
information.
``(iv) Timing.--The pharmacy benefit
manager must provide information under clause
(iii) and other information, data, and records
relevant to the audit to such auditor within 6
months of the initiation of the audit and
respond to requests for additional information
from such auditor within 30 days after the
request for additional information.
``(v) Information from affiliates.--The
pharmacy benefit manager shall be responsible
for providing to such auditor information
required to be reported under subparagraph (C)
or under clause (iii) of this subparagraph that
is owned or held by an affiliate of such
pharmacy benefit manager.
``(2) Enforcement.--
``(A) In general.--Each PDP sponsor shall--
``(i) disgorge to the Secretary any amounts
disgorged to the PDP sponsor by a pharmacy
benefit manager under paragraph (1)(A)(v);
``(ii) require, in a written agreement with
any pharmacy benefit manager acting on behalf
of such sponsor or affiliate of such pharmacy
benefit manager, that such pharmacy benefit
manager or affiliate reimburse the PDP sponsor
for any civil money penalty imposed on the PDP
sponsor as a result of the failure of the
pharmacy benefit manager or affiliate to meet
the requirements of paragraph (1) that are
applicable to the pharmacy benefit manager or
affiliate under the agreement; and
``(iii) require, in a written agreement
with any such pharmacy benefit manager acting
on behalf of such sponsor or affiliate of such
pharmacy benefit manager, that such pharmacy
benefit manager or affiliate be subject to
punitive remedies for breach of contract for
failure to comply with the requirements
applicable under paragraph (1).
``(B) Reporting of alleged violations.--The
Secretary shall make available and maintain a mechanism
for manufacturers, PDP sponsors, pharmacies, and other
entities that have contractual relationships with
pharmacy benefit managers or affiliates of such
pharmacy benefit managers to report, on a confidential
basis, alleged violations of paragraph (1)(A) or
subparagraph (C).
``(C) Anti-retaliation and anti-coercion.--
Consistent with applicable Federal or State law, a PDP
sponsor shall not--
``(i) retaliate against an individual or
entity for reporting an alleged violation under
subparagraph (B); or
``(ii) coerce, intimidate, threaten, or
interfere with the ability of an individual or
entity to report any such alleged violations.
``(3) Certification of compliance.--
``(A) In general.--Each PDP sponsor shall furnish
to the Secretary (at a time and in a manner specified
by the Secretary) an annual certification of compliance
with this subsection, as well as such information as
the Secretary determines necessary to carry out this
subsection.
``(B) Implementation.--Notwithstanding any other
provision of law, the Secretary may implement this
paragraph by program instruction or otherwise.
``(4) Rule of construction.--Nothing in this subsection
shall be construed as--
``(A) prohibiting flat dispensing fees or
reimbursement or payment for ingredient costs
(including customary, industry-standard discounts
directly related to drug acquisition that are retained
by pharmacies or wholesalers) to entities that acquire
or dispense prescription drugs; or
``(B) modifying regulatory requirements or sub-
regulatory program instruction or guidance related to
pharmacy payment, reimbursement, or dispensing fees.
``(5) Standard formats.--
``(A) In general.--Not later than June 1, 2028, the
Secretary shall specify standard, machine-readable
formats for pharmacy benefit managers to submit annual
reports required under paragraph (1)(C)(i).
``(B) Implementation.--Notwithstanding any other
provision of law, the Secretary may implement this
paragraph by program instruction or otherwise.
``(6) Confidentiality.--
``(A) In general.--Information disclosed by a
pharmacy benefit manager, an affiliate of a pharmacy
benefit manager, a PDP sponsor, or a pharmacy under
this subsection that is not otherwise publicly
available or available for purchase shall not be
disclosed by the Secretary or a PDP sponsor receiving
the information, except that the Secretary may disclose
the information for the following purposes:
``(i) As the Secretary determines necessary
to carry out this part.
``(ii) To permit the Comptroller General to
review the information provided.
``(iii) To permit the Director of the
Congressional Budget Office to review the
information provided.
``(iv) To permit the Executive Director of
the Medicare Payment Advisory Commission to
review the information provided.
``(v) To the Attorney General for the
purposes of conducting oversight and
enforcement under this title.
``(vi) To the Inspector General of the
Department of Health and Human Services in
accordance with its authorities under the
Inspector General Act of 1978 (section 406 of
title 5, United States Code), and other
applicable statutes.
``(B) Restriction on use of information.--The
Secretary, the Comptroller General, the Director of the
Congressional Budget Office, and the Executive Director
of the Medicare Payment Advisory Commission shall not
report on or disclose information disclosed pursuant to
subparagraph (A) to the public in a manner that would
identify--
``(i) a specific pharmacy benefit manager,
affiliate, pharmacy, manufacturer, wholesaler,
PDP sponsor, or plan; or
``(ii) contract prices, rebates, discounts,
or other remuneration for specific drugs in a
manner that may allow the identification of
specific contracting parties or of such
specific drugs.
``(7) Definitions.--For purposes of this subsection:
``(A) Affiliate.--The term `affiliate' means, with
respect to any pharmacy benefit manager or PDP sponsor,
any entity that, directly or indirectly--
``(i) owns or is owned by, controls or is
controlled by, or is otherwise related in any
ownership structure to such pharmacy benefit
manager or PDP sponsor; or
``(ii) acts as a contractor, principal, or
agent to such pharmacy benefit manager or PDP
sponsor, insofar as such contractor, principal,
or agent performs any of the functions
described under subparagraph (C).
``(B) Bona fide service fee.--The term `bona fide
service fee' means a fee that is reflective of the fair
market value (as specified by the Secretary, through
notice and comment rulemaking) for a bona fide,
itemized service actually performed on behalf of an
entity, that the entity would otherwise perform (or
contract for) in the absence of the service arrangement
and that is not passed on in whole or in part to a
client or customer, whether or not the entity takes
title to the drug. Such fee must be a flat dollar
amount and shall not be directly or indirectly based
on, or contingent upon--
``(i) drug price, such as wholesale
acquisition cost or drug benchmark price (such
as average wholesale price);
``(ii) the amount of discounts, rebates,
fees, or other direct or indirect remuneration
with respect to covered part D drugs dispensed
to enrollees in a prescription drug plan,
except as permitted pursuant to paragraph
(1)(A)(ii);
``(iii) coverage or formulary placement
decisions or the volume or value of any
referrals or business generated between the
parties to the arrangement; or
``(iv) any other amounts or methodologies
prohibited by the Secretary.
``(C) Pharmacy benefit manager.--The term `pharmacy
benefit manager' means any person or entity that,
either directly or through an intermediary, acts as a
price negotiator or group purchaser on behalf of a PDP
sponsor or prescription drug plan, or manages the
prescription drug benefits provided by such sponsor or
plan, including the processing and payment of claims
for prescription drugs, the performance of drug
utilization review, the processing of drug prior
authorization requests, the adjudication of appeals or
grievances related to the prescription drug benefit,
contracting with network pharmacies, controlling the
cost of covered part D drugs, or the provision of
related services. Such term includes any person or
entity that carries out one or more of the activities
described in the preceding sentence, irrespective of
whether such person or entity calls itself a `pharmacy
benefit manager'.''.
(2) MA-PD plans.--Section 1857(f)(3) of the Social Security
Act (42 U.S.C. 1395w-27(f)(3)) is amended by adding at the end
the following new subparagraph:
``(F) Requirements relating to pharmacy benefit
managers.--For plan years beginning on or after January
1, 2029, section 1860D-12(h).''.
(3) Nonapplication of paperwork reduction act.--Chapter 35
of title 44, United States Code, shall not apply to the
implementation of this subsection.
(4) Funding.--
(A) Secretary.--In addition to amounts otherwise
available, there is appropriated to the Centers for
Medicare & Medicaid Services Program Management
Account, out of any money in the Treasury not otherwise
appropriated, $113,000,000 for fiscal year 2026, to
remain available until expended, to carry out this
subsection.
(B) OIG.--In addition to amounts otherwise
available, there is appropriated to the Inspector
General of the Department of Health and Human Services,
out of any money in the Treasury not otherwise
appropriated, $20,000,000 for fiscal year 2026, to
remain available until expended, to carry out this
subsection.
(b) GAO Study and Report on Price-Related Compensation Across the
Supply Chain.--
(1) Study.--The Comptroller General of the United States
(in this subsection referred to as the ``Comptroller General'')
shall conduct a study describing the use of compensation and
payment structures related to a prescription drug's price
within the retail prescription drug supply chain in part D of
title XVIII of the Social Security Act (42 U.S.C. 1395w-101 et
seq.). Such study shall summarize information from Federal
agencies and industry experts, to the extent available, with
respect to the following:
(A) The type, magnitude, other features (such as
the pricing benchmarks used), and prevalence of
compensation and payment structures related to a
prescription drug's price, such as calculating fee
amounts as a percentage of a prescription drug's price,
between intermediaries in the prescription drug supply
chain, including--
(i) pharmacy benefit managers;
(ii) PDP sponsors offering prescription
drug plans and Medicare Advantage organizations
offering MA-PD plans;
(iii) drug wholesalers;
(iv) pharmacies;
(v) manufacturers;
(vi) pharmacy services administrative
organizations;
(vii) brokers, auditors, consultants, and
other entities that--
(I) advise PDP sponsors offering
prescription drug plans and Medicare
Advantage organizations offering MA-PD
plans regarding pharmacy benefits; or
(II) review PDP sponsor and
Medicare Advantage organization
contracts with pharmacy benefit
managers; and
(viii) other service providers that
contract with any of the entities described in
clauses (i) through (vii) that may use price-
related compensation and payment structures,
such as rebate aggregators (or other entities
that negotiate or process price concessions on
behalf of pharmacy benefit managers, plan
sponsors, or pharmacies).
(B) The primary business models and compensation
structures for each category of intermediary described
in subparagraph (A).
(C) Variation in price-related compensation
structures between affiliated entities (such as
entities with common ownership, either full or partial,
and subsidiary relationships) and unaffiliated
entities.
(D) Potential conflicts of interest among
contracting entities related to the use of prescription
drug price-related compensation structures, such as the
potential for fees or other payments set as a
percentage of a prescription drug's price to advantage
formulary selection, distribution, or purchasing of
prescription drugs with higher prices.
(E) Notable differences, if any, in the use and
level of price-based compensation structures over time
and between different market segments, such as under
part D of title XVIII of the Social Security Act (42
U.S.C. 1395w-101 et seq.) and the Medicaid program
under title XIX of such Act (42 U.S.C. 1396 et seq.).
(F) The effects of drug price-related compensation
structures and alternative compensation structures on
Federal health care programs and program beneficiaries,
including with respect to cost-sharing, premiums,
Federal outlays, biosimilar and generic drug adoption
and utilization, drug shortage risks, and the potential
for fees set as a percentage of a drug's price to
advantage the formulary selection, distribution, or
purchasing of drugs with higher prices.
(G) Other issues determined to be relevant and
appropriate by the Comptroller General.
(2) Report.--Not later than 2 years after the date of
enactment of this section, the Comptroller General shall submit
to Congress a report containing the results of the study
conducted under paragraph (1), together with recommendations
for such legislation and administrative action as the
Comptroller General determines appropriate.
(c) MedPAC Reports on Agreements With Pharmacy Benefit Managers
With Respect to Prescription Drug Plans and MA-PD Plans.--
(1) In general.--The Medicare Payment Advisory Commission
shall submit to Congress the following reports:
(A) Initial report.--Not later than the first March
15 occurring after the date that is 2 years after the
date on which the Secretary makes the data available to
the Commission, a report regarding agreements with
pharmacy benefit managers with respect to prescription
drug plans and MA-PD plans. Such report shall include,
to the extent practicable--
(i) a description of trends and patterns,
including relevant averages, totals, and other
figures for the types of information submitted;
(ii) an analysis of any differences in
agreements and their effects on plan enrollee
out-of-pocket spending and average pharmacy
reimbursement, and other impacts; and
(iii) any recommendations the Commission
determines appropriate.
(B) Final report.--Not later than 2 years after the
date on which the Commission submits the initial report
under subparagraph (A), a report describing any changes
with respect to the information described in
subparagraph (A) over time, together with any
recommendations the Commission determines appropriate.
(2) Funding.--In addition to amounts otherwise available,
there is appropriated to the Medicare Payment Advisory
Commission, out of any money in the Treasury not otherwise
appropriated, $1,000,000 for fiscal year 2026, to remain
available until expended, to carry out this subsection.
SEC. 6. FULL REBATE PASS THROUGH TO PLAN; EXCEPTION FOR INNOCENT PLAN
FIDUCIARIES.
(a) In General.--Section 408(b)(2) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1108(b)(2)) is amended--
(1) in subparagraph (B)(viii)--
(A) by redesignating subclauses (II) through (IV)
as subclauses (III) through (V), respectively;
(B) in subclause (I)--
(i) by striking ``subclause (II)'' and
inserting ``subclause (III)''; and
(ii) by striking ``subclauses (II) and
(III)'' and inserting ``subclauses (III) and
(IV)''; and
(C) by inserting after subclause (I) the following:
``(II) Pursuant to subsection (a), subparagraphs (C) and
(D) of section 406(a)(1) shall not apply to a responsible plan
fiduciary, notwithstanding any failure to remit required
amounts under subparagraph (C)(i), 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 remittances and reasonably believed
that the covered service provider remitted such
required amounts.
``(bb) The responsible plan fiduciary, upon
discovering that the covered service provider failed to
remit the required amounts, requests in writing that
the covered service provider remit such amounts.
``(cc) If the covered service provider fails to
comply with a written request described in subclause
(III) within 90 days of the request, the responsible
plan fiduciary notifies the Secretary of the covered
service provider's failure, in accordance with
subclauses (III) and (IV).''; and
(2) by adding at the end the following:
``(C)(i)(I) For plan years beginning on or after the date
that is 30 months after the date of enactment of this
subparagraph (referred to in this clause as the `effective
date'), no contract or arrangement or renewal or extension of a
contract or arrangement, entered into on or after the effective
date, for services between a covered plan and a covered service
provider, through a health insurance issuer offering group
health insurance coverage, a third party administrator, an
entity providing pharmacy benefit management services, or other
entity, for pharmacy benefit management services, is reasonable
within the meaning of this paragraph unless such entity
providing pharmacy benefit management services--
``(aa) remits 100 percent of rebates, fees,
alternative discounts, and other remuneration received
from any applicable entity that are related to
utilization of drugs or drug spending under such health
plan or health insurance coverage, to the group health
plan or health insurance issuer offering group health
insurance coverage; and
``(bb) does not enter into any contract for
pharmacy benefit management services on behalf of such
a plan or coverage, with an applicable entity unless
100 percent of rebates, fees, alternative discounts,
and other remuneration received under such contract
that are related to the utilization of drugs or drug
spending under such group health plan or health
insurance coverage are remitted to the group health
plan or health insurance issuer by the entity providing
pharmacy benefit management services.
``(II) Nothing in subclause (I) shall be construed to
affect the term of a contract or arrangement, as in effect on
the effective date (as described in such subclause), except
that such subclause shall apply to any renewal or extension of
such a contract or arrangement entered into on or after such
effective date, as so described.
``(ii) With respect to such rebates, fees, alternative
discounts, and other remuneration--
``(I) the rebates, fees, alternative discounts, and
other remuneration under clause (i)(I) shall be--
``(aa) remitted--
``(AA) on a quarterly basis, to the
group health plan or the group health
insurance issuer, not later than 90
days after the end of each quarter; or
``(BB) in the case of an
underpayment in a remittance for a
prior quarter, as soon as practicable,
but not later than 90 days after notice
of the underpayment is first given;
``(bb) fully disclosed and enumerated to
the group health plan or health insurance
issuer; and
``(cc) returned to the covered service
provider for pharmacy benefit management
services on behalf of the group health plan if
any audit by a plan sponsor, issuer or a third
party designated by a plan sponsor, indicates
that the amounts received are incorrect after
such amounts have been paid to the group health
plan or health insurance issuer;
``(II) the Secretary may establish procedures for
the remittance of rebates fees, alternative discounts,
and other remuneration under subclause (I)(aa) and the
disclosure of rebates, fees, alternative discounts, and
other remuneration under subclause (I)(bb); and
``(III) the records of such rebates, fees,
alternative discounts, and other remuneration shall be
available for audit by the plan sponsor, issuer, or a
third party designated by a plan sponsor, not less than
once per plan year.
``(iii) To ensure that an entity providing pharmacy benefit
management services is able to meet the requirements of clause
(ii)(I), a rebate aggregator (or other purchasing entity
designed to aggregate rebates) and an applicable group
purchasing organization shall remit such rebates to the entity
providing pharmacy benefit management services not later than
45 days after the end of each quarter.
``(iv) A third-party administrator of a group health plan,
a health insurance issuer offering group health insurance
coverage, or a covered service provider for pharmacy benefit
management services under such health plan or health insurance
coverage shall make rebate contracts with rebate aggregators or
drug manufacturers available for audit by such plan sponsor or
designated third party, subject to reasonable restrictions (as
determined by the Secretary) on confidentiality to prevent re-
disclosure of such contracts or use of such information in
audits for purposes unrelated to this section.
``(v) Audits carried out under clauses (ii)(III) and (iv)
shall be performed by an auditor selected by the responsible
plan fiduciary. Payment for such audits shall not be made,
whether directly or indirectly, by the entity providing
pharmacy benefit management services.
``(vi) Nothing in this subparagraph shall be construed to--
``(I) prohibit reasonable payments to entities
offering pharmacy benefit management services for bona
fide services using a fee structure not described in
this subparagraph, provided that such fees are
transparent and quantifiable to group health plans and
health insurance issuers;
``(II) require a third-party administrator of a
group health plan or covered service provider for
pharmacy benefit management services under such health
plan or health insurance coverage to remit bona fide
service fees to the group health plan;
``(III) limit the ability of a group health plan or
health insurance issuer to pass through rebates, fees,
alternative discounts, and other remuneration to the
participant or beneficiary; or
``(IV) modify the requirements for the creation,
receipt, maintenance, or transmission of protected
health information under the privacy regulations
promulgated under the Health Insurance Portability and
Accountability Act of 1996 in part 160 and subparts A
and E of part 164 of title 45, Code of Federal
Regulations (or successor regulations).
``(vii) For purposes of this subparagraph--
``(I) the terms `applicable entity' and `applicable
group purchasing organization' have the meanings given
such terms in section 726(e);
``(II) the terms `covered plan', `covered service
provider', and `responsible plan fiduciary' have the
meanings given such terms in subparagraph (B); and
``(III) the terms `group health insurance
coverage', `health insurance coverage', and `health
insurance issuer' have the meanings given such terms in
section 733.''.
(b) Rule of Construction.--Subclause (II)(aa) of section
408(b)(2)(B)(viii) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1108(b)(2)(B)(viii)), as amended by subsection (a),
shall not be construed to relieve or limit a responsible plan fiduciary
from the duty to monitor the practices of any covered service provider
that contracts with the applicable covered plan, including for the
purposes of ensuring the reasonableness of compensation. For purposes
of this subsection, the terms ``covered plan'', ``covered service
provider'', and ``responsible plan fiduciary'' have the meanings given
such terms in section 408(b)(2)(B)(ii) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1108(b)(2)(B)(ii)).
(c) Clarification of Covered Service Provider.--
(1) Services.--
(A) In general.--Section 408(b)(2)(B)(ii)(I)(bb) of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1108(b)(2)(B)(ii)(I)(bb)) is amended--
(i) in subitem (AA) by striking ``Brokerage
services,'' and inserting ``Services (including
brokerage services),''; and
(ii) in subitem (BB)--
(I) by striking ``Consulting,'' and
inserting ``Other services,''; and
(II) by striking ``related to the
development or implementation of plan
design'' and all that follows through
the period at the end and inserting
``including any of the following: 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, or
consulting services related to any such
services.''.
(B) Sense of congress.--It is the sense of Congress
that the amendment made by subparagraph (A) clarifies
the existing requirement of covered service providers
with respect to services described in section
408(b)(2)(B)(ii)(I)(bb)(BB) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C.
1108(b)(2)(B)(ii)(I)(bb)(BB)) that were in effect since
the application date described in section 202(e) of the
No Surprises Act (Public Law 116-260; 29 U.S.C. 1108
note), and does not impose any additional requirement
under section 408(b)(2)(B) of such Act.
(2) Certain arrangements for pharmacy benefit management
services considered as indirect.--
(A) In general.--Section 408(b)(2)(B)(i) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1108(b)(2)(B)(i)) is amended--
(i) by striking ``requirements of this
clause'' and inserting ``requirements of this
subparagraph''; and
(ii) by adding at the end the following:
``For purposes of applying section 406(a)(1)(C)
with respect to a transaction described under
this subparagraph or subparagraph (C), a
contract or arrangement for services between a
covered plan and an entity providing services
to the plan, including a health insurance
issuer providing health insurance coverage in
connection with the covered plan, in which such
entity contracts, in connection with such plan,
with a service provider for pharmacy benefit
management services, shall be considered an
indirect furnishing of goods, services, or
facilities between the covered plan and the
service provider for pharmacy benefit
management services acting as the party in
interest.''.
(B) Health insurance issuer and health insurance
coverage defined.--Section 408(b)(2)(B)(ii)(I)(aa) of
such Act (29 U.S.C. 1108(b)(2)(B)(ii)(I)(aa)) is
amended by inserting before the period at the end ``and
the terms `health insurance coverage' and `health
insurance issuer' have the meanings given such terms in
section 733(b)''.
(C) Technical amendment.--Section
408(b)(2)(B)(ii)(I)(aa) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C.
1108(b)(2)(B)(ii)(I)(aa)) is amended by inserting
``in'' after ``defined''.
SEC. 7. QUALIFIED EXCHANGE ENROLLEES ELIGIBLE TO ESTABLISH HEALTH
SAVINGS ACCOUNTS.
(a) In General.--Section 223 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(i) Qualified Exchange Enrollees Eligible To Establish Health
Savings Accounts.--
``(1) In general.--For purposes of this section, an
individual who is a qualified Exchange enrollee for any month
during a taxable year shall be treated as an eligible
individual for each of the months in such taxable year and each
taxable year thereafter. Notwithstanding the previous sentence,
any individual who elects to make an advance premium payment
under section 1412(c)(2)(C) of the Patient Protection and
Affordable Care Act with respect to any month during a taxable
year shall not be treated as an eligible individual for such
month or any other month during such taxable year.
``(2) Qualified exchange enrollee.--For purposes of this
subsection, the term `qualified Exchange enrollee' means, with
respect to any month during a taxable year, any individual if,
as of the 1st day of such month, such individual is enrolled in
a qualified health plan in the individual market through an
Exchange established under the Patient Protection and
Affordable Care Act that is--
``(A) the lowest cost bronze plan available to such
individual through such Exchange, or
``(B) in the case that, for any month during the
preceding taxable year, such individual was enrolled in
a qualified health plan in the individual market
through such an Exchange (referred to in this paragraph
as the `previous plan'), such a qualified health plan
for which the monthly premium is lower than the monthly
premium that was in effect for the previous plan.
``(3) Application of monthly limitations for
contributions.--In the case of an individual who is treated as
an eligible individual under paragraph (1), subsection (b)(2)
shall be applied as if each reference to `high deductible
health plan' were a reference to `a qualified health plan in
the individual market that was enrolled in through an Exchange
established under the Patient Protection and Affordable Care
Act'.
``(4) Coordination with contributions of partial advance
premium tax credit.--The limitation which would (but for this
paragraph) apply under subsection (b) for any taxable year to
an individual who is treated as an eligible individual under
paragraph (1) shall be reduced (but not below zero) by the
aggregate amount contributed to health savings accounts of such
individual for such taxable year under section 1412(f) of the
Patient Protection and Affordable Care Act (and such amount
shall not be allowed as a deduction under subsection (a)).
``(5) Allowing health insurance to be purchased from
account.--In the case of an individual who is treated as an
eligible individual under paragraph (1), subsection (d)(2)
shall be applied without regard to subparagraphs (B) and (C)
thereof.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2025.
SEC. 8. OPTION TO PREPAY ANNUAL PREMIUM; OPTION TO DIRECT PARTIAL
ADVANCE PAYMENT OF PREMIUM TAX CREDIT INTO HSA.
(a) Option To Prepay Annual Premium.--Section 1412(c)(2) of the
Patient Protection and Affordable Care Act (42 U.S.C. 18082(c)(2)) is
amended--
(1) in subparagraph (B)(i), by inserting ``, and, in the
case of an individual who elects to make an advance premium
payment under subparagraph (C), further reduce such premium by
$5'' before the semicolon;
(2) by redesignating subparagraph (C), as added by section
3(d), as subparagraph (D); and
(3) by inserting after subparagraph (B) the following new
subparagraph:
``(C) Individual option to prepay annual premium.--
Beginning with plan years beginning in 2026, in the
case of an individual with respect to whom an advance
determination has been made under section 1411 that
such individual is eligible for a premium tax credit
under section 36B of the Internal Revenue Code of 1986,
if the premium assistance amount under subsection
(b)(2) of such section is determined with respect to
such individual in accordance with subsection
(b)(3)(A)(iii)(II) of such section, such individual may
elect to make an advance premium payment to the issuer
of the qualified health plan in which such individual
is enrolled in an amount equal to $5 multiplied by--
``(i) in the case that the advance
determination of eligibility was made during
the annual open enrollment period for such plan
year, 12; or
``(ii) in the case that the advance
determination of eligibility was made during an
open enrollment period other than the annual
open enrollment period for such plan year, the
number of months remaining in such plan
year.''.
(b) Option To Direct Partial Advance Payment of Premium Tax Credit
Into HSA.--Section 1412 of the Patient Protection and Affordable Care
Act (42 U.S.C. 18082) is amended--
(1) in subsection (c)(2)--
(A) in subparagraph (A), by striking ``The'' and
inserting ``Subject to subsection (f), the''; and
(B) in subparagraph (B), by inserting ``(including
such a payment made in accordance with subsection
(f))'' after ``an advance payment''; and
(2) by adding at the end the following new subsection:
``(f) Option To Direct Partial Advance Payment of Premium Tax
Credit to HSA.--
``(1) In general.--Beginning with plan years beginning in
2026, at the election of an eligible enrolled individual
described in paragraph (2), the advance payment of the premium
tax credit allowed under section 36B of the Internal Revenue
Code of 1986 shall be made as follows:
``(A) The Secretary of the Treasury shall make
advance payment of 50 percent of such premium tax
credit to the issuer of a qualified health plan on a
monthly basis (or such other periodic basis as the
Secretary may provide).
``(B) The Secretary of the Treasury shall make
advance payment of 50 percent of such premium tax
credit into a health savings account (as defined in
section 223(d) of the Internal Revenue Code of 1986) of
such individual (as designated by such individual) on
the same basis provided for under subparagraph (A), but
only to the extent that the aggregate amount of such
payments does not exceed the limitation under section
223(b) of such Code (determined without regard to this
subsection) which is applicable to such individual for
the taxable year in which such payments are made.
``(2) Eligible enrolled individual.--For purposes of this
subsection, the term `eligible enrolled individual' means, with
respect to a plan year (starting with 2026), an individual--
``(A) with respect to whom an advance determination
has been made under section 1411 that such individual
is eligible for a premium tax credit under section 36B
of the Internal Revenue Code of 1986;
``(B) who is, for the first month of such plan
year, a qualified Exchange enrollee (as defined in
section 223(i) of the Internal Revenue Code of 1986);
and
``(C) who does not elect to make an advance premium
payment under subsection (c)(2)(C).''.
SEC. 9. REPORT.
Not later than one year after the date of the enactment of this
Act, the Secretary of the Treasury and the Secretary of Health and
Human Services shall jointly submit to Congress a report on the
implementation of sections 7 and 8 and any recommendations on expanding
accessibility of health savings accounts.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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