(1) Retired participants of group health plans
regulated by the Employee Retirement Income Secu-
rity Act of 1974 (ERISA) have been severely
harmed by the virtually unchecked practices of spon-
sors of such plans involving the post-retirement can-
cellation or reduction of health benefits which retir-
ees counted on receiving for their lifetimes.
(2) Such widespread post-retirement reductions
in retiree health benefits has led to a crisis in retiree
health care in which retirees—
(A) have been unable to substitute indi-
vidual coverage for the group coverage they
lost, or, in order to obtain individual coverage,
have jeopardized their economic security in re-
tirement;
(B) because of preexisting medical condi-
tions cannot obtain substitute coverage that
they can afford without depleting their life sav-
ings or have been unable to obtain adequate
medical care or medical care they had relied on
to deal with serious illness;
(C) have sustained catastrophic illnesses or
injuries or otherwise experienced a marked de-
terioration in their medical conditions or health
as a result of post-retirement changes to their
medical benefits;
(D) have been transferred indiscriminately
into improperly or inadequately managed health
maintenance organizations or other managed
care entities, resulting in the worsening rather
than improvement of prior medical conditions;
and
(E) in many instances, have failed to ob-
tain adequate relief in the courts due to highly
restrictive judicial interpretations which are in-
consistent with ERISA’s underlying protective
purposes.
(3) The crisis in retirees healthcare generated
by the plan sponsor practice of post-retirement can-
cellations or reductions of previously promised re-
tiree health benefits has led to a widespread loss of
confidence in the integrity of ERISA-regulated
group health plans and the ability of ERISA itself
to adequately protect retiree health benefits.
(4) A strong and dependable private sector re-
tiree health system is necessary to the essential
health of our Nation’s senior citizens.
(b) PURPOSES.—The purposes of this Act are to en-
sure that the reasonable health benefit expectations of re-
tirees from ERISA-regulated group health plans are ful-
filled, to minimize the incidence of prolonged legal dis-
putes arising out of the post-retirement cancellation or re-
duction of retiree health benefits from such plans, and to
prevent further adverse effects on retiree health arising
from such post-retirement changes. To this end, the pur-
poses of this Act also include the following:
(1) to safeguard retired participants of group
health plans subject to the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1001 et seq.)
from loss or reduction of their health benefits from
such plans by barring plan sponsors from canceling
or reducing such benefits after the dates such par-
ticipants retire and when they no longer are able to
absorb such losses or reductions without experi-
encing adverse effects on their health or finances;
(2) to establish an enforceable obligation on the
part of sponsors of such group health plans to re-
store health benefits previously taken away from re-
tired participants of such plans to the extent such
benefits were canceled or altered after the dates
such participants retired and the plan sponsor would
not sustain substantial business hardship by restor-
ing such benefits; and
(3) to establish an Emergency Retiree Health
Loan Guarantee Program to assist sponsors of
group health plans subject to the obligation to re-
store retiree health benefits under this Act to obtain
credit to assist them in discharging such obligations
by providing retiree health loan guarantees that
would encourage the availability of such credit.
SEC. 3. AMENDMENT OF EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974 TO PROVIDE RETIREE
HEALTH BENEFIT PROTECTIONS IN GROUP
HEALTH PLANS.
(a) IN GENERAL.—Subtitle B of title I of the Em-
ployee Retirement Income Security Act of 1974 is amend-
ed by adding at the end a new part 8 as follows:
‘‘PART 8—EMERGENCY RETIREE HEALTH
BENEFIT PROTECTIONS
‘‘SEC. 801. PROHIBITION AGAINST POST-RETIREMENT RE-
DUCTIONS OF RETIREE HEALTH BENEFITS
BY GROUP HEALTH PLANS.
‘‘(a) IN GENERAL.—Notwithstanding that a group
health plan described in subsection (b) may contain a pro-
vision reserving the general power to amend or terminate
the plan or a provision specifically authorizing the plan
to make post-retirement reductions in retiree health bene-
fits, it shall be prohibited for any group health plan,
whether through amendment or otherwise, to reduce the
benefits provided to a retired participant or his or her ben-
eficiary under the terms of the plan if such reduction of
benefits occurs after the date the participant retired for
purposes of the plan and reduces benefits that were pro-
vided to the participant, or his or her beneficiary, as of
the date the participant retired. Any group health plan
provision which purports to authorize the reduction of
benefits in a manner inconsistent with the foregoing prohi-
bition shall be void as against public policy.
‘‘(b) GROUP
HEALTH
PLAN.—The term ‘group
health plan’ shall have the same meaning as in section
607(1).
‘‘(c) PROHIBITED REDUCTION
OF BENEFITS.—As
used in this section, references to a prohibited reduction
of benefits means any group health plan amendment or
other action which has the effect of—
‘‘(1) canceling, decreasing or limiting the
amount, type, level, or form of any benefit or option
provided prior to the amendment or action;
‘‘(2) imposing or increasing the out-of-pocket
costs a retired participant, or his or her beneficiary,
must pay in order to keep or obtain any benefits
that were provided to the participant or beneficiary
prior to the amendment or action; or
‘‘(3) modifying the manner by which medical
services are delivered under the plan so that after
the amendment or action a retired participant, or
his or her beneficiary, has less ready access to the
delivery of any such medical services than the partic-
ipant or beneficiary had prior to the amendment or
action.
‘‘(d) TREATMENT OF PLAN TERMINATION.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), a
termination of a group health plan shall be treated
as violating the prohibition contained in this section
if, after the termination, the plan sponsor of the ter-
minated plan fails to continue to provide to the par-
ticipants who retired prior to the termination and to
their beneficiaries the same retiree health benefits
that were provided prior to the termination.
‘‘(2) WAIVER.—Paragraph (1) shall not apply
in the case of the termination of a group health plan
if the Secretary issues a waiver under this para-
graph in connection with such termination. The Sec-
retary shall issue such a waiver if and only if the
plan sponsor demonstrates to the satisfaction of the
Secretary, in accordance with regulations prescribed
by the Secretary, that such plan sponsor will be un-
able to continue in business unless such a waiver is
issued.
‘‘(e) CONSENT
OR AUTHORIZATION
BY PARTICI-
PANT.—A reduction of benefits shall not be treated as pro-
hibited by this section if such reduction is consented to
in writing by any retired participant or is authorized with
respect to the retired participant under the terms of one
or more agreements which the Secretary finds to be collec-
tive bargaining agreements between one or more employee
representatives who were representing such participant at
the time of the entry into such agreement and one or more
employers.
‘‘SEC. 802. ADOPTION BY GROUP HEALTH PLANS OF PROVI-
SION BARRING POST-RETIREMENT REDUC-
TIONS IN RETIREE HEALTH BENEFITS.
‘‘Every group health plan shall contain a provision
which expressly bars the plan, or any fiduciary of the plan,
from reducing the benefits provided under the plan to a
retired participant, or his or her beneficiary, if such reduc-
tion affects the benefits provided to the participant or ben-
eficiary as of the date the participant retired for purposes
of the plan and such reduction occurs after the partici-
pant’s retirement.
‘‘SEC. 803. RESTORATION BY GROUP HEALTH PLANS OF
BENEFITS REDUCED AFTER RETIREMENT.
‘‘(a) IN GENERAL.—The plan sponsor of each group
health plan shall provide, in accordance with this section,
the option of benefit restoration to each retired participant
that meets the following requirements:
‘‘(1) The retired participant is entitled to ben-
efit coverage under the plan as of the date of enact-
ment of the Emergency Retiree Health Benefits Pro-
tection Act of 2000.
‘‘(2) The amount, type, level, or form of any
benefits or option provided to the retired participant
under the plan as of the date the participant retired
was reduced after the participant’s date of retire-
ment. For purposes of the preceding sentence, the
term ‘reduced’ has the same meaning as in section
801(c).
‘‘(3) The retired participant has elected to re-
store benefits under the plan within the restoration
period prescribed by subsection (c) and in accord-
ance with such procedures established by the plan
pursuant to regulations of the Secretary.
‘‘(b) EXCEPTION FOR CERTAIN PLANS.—In accord-
ance with regulations prescribed by the Secretary, sub-
section (a) shall not apply to any group health plan with
less than 100 participants both on and after the date of
enactment of the Emergency Retiree Health Benefits Pro-
tection Act of 2000.
‘‘(c) RESTORATION PERIOD.—The term ‘restoration
period’ means the period which—
‘‘(1) begins not later than 1 year after the date
of enactment of the Emergency Retiree Health Ben-
efits Protection Act of 2000;
‘‘(2) ends before 2 years from such date, unless
extended by the Secretary pursuant to section
804(g); and
‘‘(3) is of no less than 60 days duration.
‘‘(d) NOTICE REQUIREMENTS CONCERNING RES-
TORATION OF BENEFITS.—In accordance with regulations
prescribed by the Secretary, each group health plan sub-
ject to the requirements of subsection (a) shall, within no
less than 30 days prior to the commencement of the plan’s
restoration of benefits period, provide written notice to
each retired participant of the plan who meets the require-
ments of subsection (a) of the following:
‘‘(1) A description of all benefits the retired
participant is entitled to have restored.
‘‘(2) The administrative procedure established
under the plan which may be used to submit a claim
for the restoration of any benefits.
‘‘(3) An itemization of the value of each benefit
the retired participant is entitled to have restored,
as determined in accordance with regulations of the
Secretary, and the total value of all such benefits.
‘‘(4) A description of any post-retirement in-
creases in retiree health benefits the retired partici-
pant received which the plan sponsor could rescind
if the retired participant asserts a claim for the res-
toration of benefits.
‘‘(5) An itemization of the value of each retiree
health benefit the plan sponsor could rescind, as de-
termined in accordance with regulations of the Sec-
retary, and the total value of all such benefits.
‘‘(6) If the plan sponsor has filed an application
for a substantial business hardship exemption under
section 804, the date such application was filed, the
date notice of such application was given to retired
participants entitled to submit a claim for the res-
toration of benefits, and the status of such applica-
tion as of the date of the notice sent pursuant to
this subsection.
‘‘(7) Such other information in such form and
detail as may be prescribed by the Secretary to carry
out the purposes of this part.
‘‘(e) DEADLINE FOR RESTORATION OF BENEFITS.—
Regardless of any extension that may be granted by the
Secretary pursuant to section 804(g), all benefits required
to be restored under this section shall be restored within
no more than 3 years from the date of enactment of the
Emergency Retiree Health Benefits Protection Act of
2000, or the date the plan sponsor files an application for
an exemption under section 804, whichever comes last.
‘‘SEC. 804. EXEMPTION FROM RESTORATION OF BENEFITS
REQUIREMENTS.
‘‘(a) APPLICATION
FOR
EXEMPTION.—Any plan
sponsor of a group health plan that would sustain substan-
tial business hardship if required to fulfill, in whole or in
part, the restoration of benefits requirements contained in
section 803, may file an application for an exemption with
the Secretary from any or all of such requirements.
‘‘(b) AUTHORITY FOR WAIVER OR VARIANCE.—In re-
sponse to an application filed by a plan sponsor pursuant
to subsection (a), the Secretary may waive or vary the re-
quirements of section 803 with respect to any or all of
such requirements, including postponing for reasonable
periods of time the obligation of the plan sponsor to re-
store reduced benefits, if the Secretary finds that compli-
ance by the plan sponsor with the requirements of section
803 would—
‘‘(1) be adverse to the interests of plan partici-
pants in the aggregate;
‘‘(2) not be administratively feasible; and
‘‘(3) cause substantial business hardship to the
plan sponsor.
‘‘(c) FACTORS TAKEN INTO ACCOUNT.—For pur-
poses of this section, the factors to be taken into account
in determining substantial business hardship shall include
(but shall not be limited to) whether—
‘‘(1) the plan sponsor is operating at an eco-
nomic loss;
‘‘(2) compliance with the restoration of benefits
requirements would necessitate substantial future re-
ductions in health benefits provided to participants
under the plan or cause a substantial decline in em-
ployment with the plan sponsor;
‘‘(3) it is reasonable to expect that the plan will
be continued only if a waiver or appropriate variance
is granted; and
‘‘(4) the provisions of the Retiree Health Loan
Guarantee Program established under section 805
are unavailable to the plan sponsor submitting the
application, or, if available, still would not provide a
sufficient basis for denying a waiver or variance.
‘‘(d) REQUIREMENT OF SATISFACTORY EVIDENCE.—
‘‘(1) IN GENERAL.—The Secretary shall, before
granting a waiver or variance under this section, re-
quire each applicant to provide evidence satisfactory
to the Secretary that the applicant has provided
timely written notice of the filing of an application
for such waiver or variance to each retired partici-
pant entitled to submit a claim for the restoration
of benefits under the applicant’s plan.
‘‘(2) TIMELINESS.—For purposes of paragraph
(1), a written notice shall be considered timely if it
is provided not later than 60 days prior to the date
the plan sponsor files an application for a waiver or
variance under this section.
‘‘(3) INFORMATION REQUIRED.—The notice re-
ferred to in paragraph (1) shall include information
with respect to the specific relief that will be sought
by the plan sponsor’s application, the period of time
for which relief is sought, and such other relevant
information as the Secretary may prescribe.
‘‘(e) PARTICIPATION IN PROCEEDINGS BY RETIRED
PLAN PARTICIPANTS.—Each retired participant entitled
to submit a claim for the restoration of benefits within
the meaning of this section shall be provided a reasonable
opportunity to submit comments or otherwise participate
in any proceeding established by the Secretary to deter-
mine whether to grant or deny an application for a waiver
or variance filed by the retired participant’s plan sponsor.
‘‘(f) EXCEPTION FOR CERTAIN APPLICATIONS.—The
Secretary shall not be authorized to grant any application
for a waiver or variance purporting to satisfy the require-
ments of subsection (b) if—
‘‘(1) within the 5-year period preceding the date
of the plan sponsor’s application the plan sponsor
could have transferred excess pension assets to a
health benefits account within the meaning of sec-
tion 420 of the Internal Revenue Code of 1986 (as
in effect on the date of the enactment of the Tax
Relief Extension Act of 1999) but failed to do so,
and the plan sponsor is submitting an application on
behalf of such retiree health account; or
‘‘(2) the plan sponsor submitting the applica-
tion also maintains a fully funded pension plan with
respect to which—
‘‘(A) retired participants eligible to submit
a claim for the restoration of benefits under
section 803 are also eligible to receive ad hoc
cost-of-living adjustment benefits;
‘‘(B) the assets of the fully funded pension
plan, over the past 5 years preceding the date
of application for a waiver or variance, on aver-
‘‘(3) the Secretary of the Treasury;
‘‘(4) the Secretary of Health and Human Serv-
ices; and
‘‘(5) the Chairman of the Council of Economic
Advisers.
‘‘(d) 
RETIREE
HEALTH
LOAN
GUARANTEE
PROGRAM—
‘‘(1) AUTHORITY.—The Program may guar-
antee loans provided by private banking and invest-
ment institutions to eligible plan sponsors for pur-
poses of assisting such plan sponsors to meet their
obligations under section 803. Such loan guarantees
shall be provided to the extent provided in advance
in appropriation Acts pursuant to paragraph (4) and
only in accordance with the procedures, rules, and
regulations established by the Board.
‘‘(2) TOTAL
GUARANTEE
LIMIT.—The aggre-
gate amount of loans guaranteed and outstanding at
any time under this section may not exceed
$5,000,000,000.
‘‘(3) INDIVIDUAL GUARANTEE LIMIT.—The ag-
gregate amount of loans guaranteed under this sec-
tion with respect to a single eligible plan sponsor
may not exceed $5,000,000.
‘‘(4) ADDITIONAL COSTS.—For the additional
cost of loans guaranteed under this subsection, in-
cluding the costs of modifying the loans, as defined
in section 502 of the Congressional Budget Act of
1974 (2 U.S.C. 661a), there is authorized to be ap-
propriated $200,000,000, to remain available until
expended.
‘‘(e) REQUIREMENTS FOR LOAN GUARANTEES.—A
loan guarantee may be issued under this section upon ap-
plication to the Board by an eligible plan sponsor pursuant
to an agreement to provide a loan to that eligible plan
sponsor by a private bank or investment company, if the
Board determines that—
‘‘(1) credit is not otherwise available to that eli-
gible plan sponsor under reasonable terms and con-
ditions sufficient to meet its financing needs with re-
spect to the restoration of retiree health benefits, as
reflected in the financial and business plans of that
eligible plan sponsor;
‘‘(2) the prospective earning power of that eligi-
ble plan sponsor, together with the character and
value of the security pledged, furnish reasonable as-
surance of repayment of the loan to be guaranteed
in accordance with its terms;
‘‘(3) the loan to be guaranteed bears interest at
a rate determined by the Board to be reasonable,
taking into account the current average yield on out-
standing obligations of the United States with re-
maining periods of maturity comparable to the ma-
turity of such loan;
‘‘(4) the loan to be guaranteed will materially
assist that eligible plan sponsor to discharge its obli-
gation to comply with the restoration of benefits re-
quirements contained in section 803; and
‘‘(5) the eligible plan sponsor has agreed to an
audit by the General Accounting Office prior to the
issuance of the loan guarantee and annually while
any such guaranteed loan is outstanding.
‘‘(f) TERMS
AND CONDITIONS
OF LOAN GUAR-
ANTEE.—
‘‘(1) LOAN
DURATION.—All loans guaranteed
under this section shall be payable in full not later
than December 31, 2008, and the terms and condi-
tions of each such loan shall provide that the loan
may not be amended or any provision thereof waived
without the consent of the Board.
‘‘(2) LOAN
SECURITY.—Any commitment to
issue a loan guarantee under this section shall con-
tain such affirmative and negative covenants and
other protective provisions that the Board deter-
mines are appropriate.
‘‘(3) FEES.—An eligible plan sponsor receiving
a guarantee under this section shall pay a fee in an
amount equal to 0.5 percent of the outstanding prin-
cipal balance of the guaranteed loan to the Depart-
ment of the Treasury.
‘‘(g) REPORTS
TO CONGRESS.—The Secretary of
Labor shall submit annually to each House of the Con-
gress a full report of the activities of the Board under
this section during 2001 and 2002, and annually there-
after during such period as any loan guaranteed under
this section is outstanding. Such report shall be submitted
not later than January 31, of each year (beginning in
2001).
‘‘(h) SALARIES AND ADMINISTRATIVE EXPENSES.—
For necessary expenses to administer the Program, there
is authorized to be appropriated to the Department of
Labor (and to be transferred to the Office of the Assistant
Secretary for Pension and Welfare Benefits Administra-
tion) $10,000,000, to remain available until expended.
‘‘(i) TERMINATION OF GUARANTEE AUTHORITY.—
The authority of the Board to make commitments to guar-
antee any loan under this section shall terminate on De-
cember 31, 2004.
‘‘(j) REGULATORY ACTION.—The Board shall issue
such final procedures, rules, and regulations as may be
necessary to carry out this section not later than 90 days
after the date of enactment of the Emergency Retiree
Health Benefits Protection Act of 2000. In no event shall
the Board issue a procedure, rule, or regulation which au-
thorizes it to approve or deny any application for a loan
guarantee in more than 270 days after receipt of such ap-
plication.
‘‘(k) 
EMERGENCY
DESIGNATION.—The 
entire
amount made available to carry out this section—
‘‘(1) is designated by Congress as an emergency
requirement pursuant to section 251(b)(2)(A) of the
Balanced Budget and Emergency Deficit Control
Act of 1985 (2 U.S.C. 901(b)(2)(A)); and
‘‘(2) shall be available only to the extent that
an official budget request that includes designation
of the entire amount as an emergency requirement
(as defined in the Balanced Budget and Emergency
Deficit Control Act of 1985) is transmitted by the
President to the Congress.
‘‘SEC. 806. EFFECT ON OTHER CLAIMS.
‘‘(a) OTHER CLAIMS UNAFFECTED.—Nothing con-
tained in this part shall be construed to alter, impair, or
eliminate any claim for retiree health benefits based on
conduct alleged to violate the terms of a group health plan,
any provision of this Act (other than this part), or both,
regardless of whether such conduct occurred prior to, on,
or after, the effective date of this part.
‘‘(b) OTHER CAUSES
OF ACTION NOT AUTHOR-
IZED.—Unless the conduct giving rise to a claim for re-
tiree health benefits is alleged to violate the provisions of
this part, nothing contained in this part shall be construed
to authorize any other cause of action for the recovery of
retiree health benefits.
‘‘SEC. 807. REGULATIONS.
‘‘The Secretary may promulgate such regulations as
may be necessary to carry out the provisions of this part.
The Secretary may promulgate any interim final rules as
the Secretary deems are appropriate to carry out this part.
‘‘SEC. 808. ENFORCEMENT.
‘‘The enforcement provisions of sections 501 and 502
shall be applicable to this part.’’.
(b) CIVIL PENALTY SECTION.—Section 502(c) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1132(e)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(8) The Secretary may assess a civil penalty of not
more than $1,000 for each separate violation of section
801, 802, or 803 by any person individually with respect