H.R. 6703 — Lower Health Care Premiums for All Americans Act

This section expands the definition of "employer" under ERISA (29 U.S.C. 1002(5)) to include, for purposes of establishing or maintaining a group health plan, a group or association of employers satisfying requirements specified in new section 736(a); and adds new section 736 to ERISA (29 U.S.C. 1181 et seq.) establishing rules for such group health plans (i.e., association health plans), which employers may maintain regardless of whether they share the same industry, trade, or profession. New section 736 requires that the group or association (1) be formed and maintained in good faith for purposes other than providing health coverage, have a governing board or other formal structure controlled by employer members (with at least 75% of board positions held by employer members subject to one-vote-per-employer elections), and have existed for at least two years prior to offering a plan; (2) offer coverage to at least 51 employees and to all employees (and dependents) of employer members, but only to such employees/dependents (or as required for continuation coverage under ERISA part 6); (3) not be a health insurance issuer or controlled by one (though issuers may join as employer members); and (4) not condition membership on health status-related factors. The section further requires the plan to be controlled by participating employer members, with regular fiduciary verification of self-employed participants' eligibility (terminating ineligible ones absent proof otherwise); and prohibits eligibility rules or premium/contribution rates that discriminate based on health status-related factors.

This section amends ERISA (1) to exclude stop-loss policies obtained by self-insured group health plans—or by sponsors of group health plans that self-insure participant health risks—from the definition of health insurance coverage under ERISA section 733 (i.e., excluding such policies from ACA market reforms applicable to insured plans); and (2) to preempt state laws that prohibit group health plans from purchasing insurance against excess or unexpected claims losses (adding new ERISA section 514(b)(10)). (Thus, self-insured group health plans may obtain stop-loss coverage without state restrictions on attachment points or plan size, notwithstanding ERISA's general savings clause for state insurance laws.)

This section amends IRC §9815(b), which applies ACA group health plan requirements, by adding an exception treating "custom health option and individual care expense arrangements"—defined as employer-funded HRAs with a fixed annual maximum reimbursing medical care only while participants (and dependents) are enrolled in individual health insurance coverage (other than excepted benefits) or Medicare Parts A, B, or C—as satisfying IRC §9802 and PHS Act §§2705, 2711, 2713, and 2715, provided they meet nondiscrimination, substantiation, and notice requirements. (As background, these cited provisions generally prohibit discrimination based on health status, impose no annual or lifetime dollar limits on essential health benefits, require uniform coverage explanations, and restrict cost-sharing increases.) Nondiscrimination requirements permit employers to offer the HRA on uniform terms to specified employee classes—such as full-time employees, part-time employees, salaried employees, employees in the same rating area, unionized employees, new hires after a set date, seasonal employees, nonresident aliens without U.S.-source income, temporary workers, or other Secretary-designated classes (or combinations thereof)—without offering other group health plans (except account-based plans or excepted benefits plans) to that class; permitted variations include increases for additional dependents or age (up to 300% of the lowest amount). Substantiation requires reasonable procedures verifying initial and ongoing qualifying coverage enrollment, and notice requirements apply prior to the plan year (or eligibility).

This section establishes oversight requirements for pharmacy benefit management (PBM) services under group health plans and group health insurance coverage by adding a new section 2799A–11 to Title XXVII of the Public Health Service Act. Effective for plan years beginning 30 months after enactment, it prohibits such plans, coverage, or their PBMs from entering into, extending, or renewing contracts on or after that date with an applicable entity unless the entity agrees (1) not to limit or delay disclosure of information to the plan in a manner preventing PBM reports and (2) to provide the PBM with necessary information for those reports. It requires PBMs, for such contracts, to submit reports to plans semiannually (or quarterly if requested by the plan under the same terms, conditions, and cost), in plain language and machine-readable format, containing specified information for each reporting period on covered drugs (identified by National Drug Code), including for specified large employer plans or specified large plans (or health insurance coverage electing such reporting): (1) contracted compensation paid to the PBM and to pharmacies, and the difference between them (i.e., the spread); (2) drug names; (3) dispensing channel (e.g., retail, mail order, specialty pharmacy); (4) brand/generic status with wholesale acquisition cost (for brands) or average wholesale price (for generics) per days supply and dosage unit; (5) prescription claims, participants/beneficiaries, dosage units, and days supply by channel; (6) net price per course of treatment or fill after rebates and other remuneration; (7) participant out-of-pocket spending; (8) total net spending; and (9) total rebates, fees, discounts, or other remuneration received or expected.

This section appropriates mandatory funding, in such sums as may be necessary from general Treasury funds, for cost-sharing reduction (CSR) payments under the ACA for eligible enrollees (i.e., those with household incomes of 100-400% of the federal poverty level) in silver-level qualified health plans on Exchanges for plan years beginning on or after January 1, 2027. (CSRs reduce enrollees' deductibles, copays, and out-of-pocket limits.) Such funding is prohibited for payments related to qualified health plans providing abortion coverage, except when necessary to save the life of the mother or resulting from rape or incest.