(1) Section 1905(p)(3)(A) of the Social Secu-
rity Act (42 U.S.C. 1396d(p)(3)(A)) is amended by
striking ‘‘or 1818A’’ and inserting ‘‘, 1818A, or
1818B’’.
(2)(A) Section 602(2)(D)(ii) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1162(2)) is amended by inserting ‘‘(not including an
individual who is so entitled pursuant to enrollment
under section 1818B)’’ after ‘‘Social Security Act’’.
(B) Section 2202(2)(D)(ii) of the Public Health
Service Act (42 U.S.C. 300bb–2(2)(D)(ii)) is amend-
ed by inserting ‘‘(not including an individual who is
so entitled pursuant to enrollment under section
1818B)’’ after ‘‘Social Security Act’’.
(C) Section 4980B(f)(2)(B)(i)(V) of the Inter-
nal Revenue Code of 1986 is amended by inserting
‘‘(not including an individual who is so entitled pur-
suant to enrollment under section 1818B)’’ after
‘‘Social Security Act’’.
SEC. 102. PROTECTIONS UNDER MEDIGAP FOR RETIRED
WORKERS WHO LOSE RETIREE HEALTH BEN-
EFITS.
(a) PROVIDING FOR MEDIGAP OPEN ENROLLMENT
PERIOD.—Section 1882(s)(2)(A) of the Social Security
Act (42 U.S.C. 1395ss(s)(2)(A)), as amended by section
201(b), is amended—
(1) by striking ‘‘or (ii)’’ and inserting ‘‘, (ii)’’;
and
(2) by inserting before the period at the end the
following: ‘‘, or (iii) in the case of an individual who
enrolls in part B pursuant to a special enrollment
period provided under section 1837(i)(4), the 6-
month period beginning with the first month as of
the first day of which the individual is enrolled
under part B pursuant to such enrollment’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act and apply to any involuntary termination of
coverage under a group health plan.
TITLE II—COBRA PROTECTION
FOR EARLY RETIREES
Subtitle A—Amendments to the
Employee 
Retirement 
Income
Security Act of 1974
SEC. 201. COBRA CONTINUATION BENEFITS FOR CERTAIN
RETIRED 
WORKERS 
WHO 
LOSE 
RETIREE
HEALTH COVERAGE.
(a) 
ESTABLISHMENT
OF
NEW
QUALIFYING
EVENT.—
(1) IN GENERAL.—Section 603 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1163) is amended by inserting after paragraph (6)
the following new paragraph:
‘‘(7) The termination of benefits of group
health plan coverage as a result of plan changes or
termination in the case of a covered employee who
is a qualified retiree.’’.
(2) QUALIFIED RETIREE; AND QUALIFIED BEN-
EFICIARY DEFINED.—Section 607 of such Act (29
U.S.C. 1167) is amended—
(A) in paragraph (3)—
(i) in subparagraph (A), by inserting
‘‘except as otherwise provided in this para-
graph,’’ after ‘‘means,’’; and
(ii) by adding at the end the following
new subparagraph:
‘‘(D) SPECIAL RULE FOR QUALIFYING RE-
TIREES AND DEPENDENTS.—In the case of a
qualifying event described in section 603(7), the
term ‘qualified beneficiary’ means a qualified
retiree and any other individual who, on the day
before such qualifying event, is a beneficiary
under the plan on the basis of the individual’s
relationship to such qualified retiree.’’; and
(B) by adding at the end the following new
paragraphs:
‘‘(6) QUALIFIED RETIREE.—The term ‘qualified
retiree’ means, with respect to a qualifying event de-
scribed in section 603(7), a covered employee who,
at the time of the event—
‘‘(A) has attained 55 years of age;
‘‘(B) was receiving group health coverage
under the plan by reason of the retirement of
the covered employee; and
‘‘(C) is not enrolled under section 1818B
of the Social Security Act (relating to Medicare
benefits for certain individuals who are 55 to
65 years of age)’’.
(b) DURATION OF COVERAGE THROUGH AGE 65.—
Section 602(2)(A) of such Act (29 U.S.C. 1162(2)(A)) is
amended—
(1) in clause (ii), by inserting ‘‘or 603(7)’’ after
‘‘603(6)’’;
(2) in clause (iv), by striking ‘‘or 603(6)’’ and
inserting ‘‘, 603(6), or 603(7)’’;
(3) by redesignating clause (iv) as clause (vi);
(4) by redesignating clause (v) as clause (iv)
and by moving such clause to immediately follow
clause (iii); and
(5) by inserting after such clause (iv) the fol-
lowing new clause:
‘‘(v) SPECIAL RULE FOR CERTAIN DE-
PENDENTS IN CASE OF TERMINATION OF
RETIREE HEALTH COVERAGE.—In the case
of a qualifying event described in section
603(7), in the case of a qualified bene-
ficiary described in section 607(3)(D) who
is not the qualified retiree or spouse of
such retiree, the later of—
‘‘(I) the date that is 36 months
after the earlier of the date the quali-
fied retiree becomes entitled to bene-
fits under title XVIII of the Social Se-
curity Act, or the date of the death of
the qualified retiree; or
‘‘(II) the date that is 36 months
after the date of the qualifying
event.’’.
(c) TYPE OF COVERAGE IN CASE OF TERMINATION
OF RETIREE HEALTH COVERAGE.—Section 602(1) of
such Act (29 U.S.C. 1162(1)) is amended—
(1) by striking ‘‘The coverage’’ and inserting
the following:
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the coverage’’; and
(2) by adding at the end the following:
‘‘(B) CERTAIN RETIREES.—In the case of
a qualifying event described in section 603(7),
in applying the first sentence of subparagraph
(A) and the fourth sentence of paragraph (3),
the coverage offered that is the most prevalent
coverage option (as determined under regula-
tions of the Secretary) continued under the
group health plan (or, if none, under the most
prevalent other plan offered by the same plan
sponsor) shall be treated as the coverage de-
scribed in such sentence, or (at the option of
the plan and qualified beneficiary) such other
coverage option as may be offered and elected
by the qualified beneficiary involved.’’.
(d) INCREASED LEVEL OF PREMIUMS PERMITTED.—
Section 602(3) of such Act (29 U.S.C. 1162(3)) is amend-
ed by adding at the end the following new sentence: ‘‘In
the case of an individual provided continuation coverage
by reason of a qualifying event described in section
603(7), any reference in subparagraph (A) of this para-
graph to ‘102 percent of the applicable premium’ is
deemed a reference to ‘110 percent of the applicable pre-
mium for employed individuals (and their dependents, if
applicable) for the coverage option referred to in para-
graph (1)(B)’.’’.
(e) NOTICE.—Section 606(a) of such Act (29 U.S.C.
1166) is amended—
(1) in paragraph (4)(A), by striking ‘‘or (6)’’
and inserting ‘‘(6), or (7)’’; and
(2) by adding at the end the following:
‘‘The notice under paragraph (4) in the case of a quali-
fying event described in section 603(7) shall be provided
at least 90 days before the date of the qualifying event.
Such notice shall include information with respect to eligi-
bility for enrollment under section 1818B of the Social
Security Act (relating to medicare benefits for certain in-
dividuals who are 55 to 65 years of age).’’.
(f) ELECTION OF MEDICARE COVERAGE IN LIEU OF
CONTINUATION COVERAGE.—Section 607(3) of such Act
(29 U.S.C. 1167(3)) (as amended by subsection (a)(2))
is amended further by adding at the end the following new
subparagraph:
‘‘(E) EXCLUSION FOR CERTAIN INDIVID-
UALS
ELECTING
MEDICARE
ENROLLMENT.—
Such term does not include an individual who
is enrolled under section 1818B of the Social
Security Act (relating to Medicare benefits for
certain individuals who are 55 to 65 years of
age).’’.
(g) EFFECTIVE DATES.—
(1) IN GENERAL.—The amendments made by
this section (other than subsection (e)(2)) shall
apply to qualifying events occurring during plan
years ending after August 1, 1996. In the case of
a qualifying event occurring on or after such date
and before the date of the enactment of this Act,
such event shall be deemed (for purposes of such
amendments) to have occurred on the date of the en-
actment of this Act.
(2) ADVANCE NOTICE OF TERMINATIONS AND
REDUCTIONS.—The amendment made by subsection
(e)(2) shall apply to qualifying events occurring on
or after February 10, 2000.
Subtitle B—Amendments to the
Public Health Service Act
SEC. 211. COBRA CONTINUATION BENEFITS FOR CERTAIN
RETIRED 
WORKERS 
WHO 
LOSE 
RETIREE
HEALTH COVERAGE.
(a) 
ESTABLISHMENT
OF
NEW
QUALIFYING
EVENT.—
(1) IN GENERAL.—Section 2203 of the Public
Health Service Act (42 U.S.C. 300bb–3) is amended
by inserting after paragraph (5) the following new
paragraph:
‘‘(6) The termination of benefits of group
health plan coverage as a result of plan changes or
termination in the case of a covered employee who
is a qualified retiree.’’.
(2) QUALIFIED RETIREE; AND QUALIFIED BEN-
EFICIARY; DEFINED.—Section 2208 of such Act (42
U.S.C. 300bb–8) is amended—
(A) in paragraph (3)—
(i) in subparagraph (A), by inserting
‘‘except as otherwise provided in this para-
graph,’’ after ‘‘means,’’; and
(ii) by adding at the end the following
new subparagraph:
‘‘(C) SPECIAL RULE FOR QUALIFYING RE-
TIREES AND DEPENDENTS.—In the case of a
qualifying event described in section 2203(6),
the term ‘qualified beneficiary’ means a quali-
fied retiree and any other individual who, on
the day before such qualifying event, is a bene-
ficiary under the plan on the basis of the indi-
vidual’s relationship to such qualified retiree.’’;
and
(B) by adding at the end the following new
paragraphs:
‘‘(5) QUALIFIED RETIREE.—The term ‘qualified
retiree’ means, with respect to a qualifying event de-
scribed in section 2203(6), a covered employee who,
at the time of the event—
‘‘(A) has attained 55 years of age;
‘‘(B) was receiving group health coverage
under the plan by reason of the retirement of
the covered employee; and
‘‘(C) is not enrolled under section 1818B of the
Social Security Act (relating to Medicare benefits for
certain individuals who are 55 to 65 years of age).’’.
(b) DURATION OF COVERAGE THROUGH AGE 65.—
Section 2202(2)(A) of such Act (42 U.S.C. 300bb–
2(2)(A)) is amended—
(1) by redesignating clause (iii) as clause (iv);
and
(2) by inserting after clause (ii) the following
new clause:
‘‘(iii) SPECIAL
RULE
FOR
CERTAIN
DEPENDENTS
IN
CASE
OF
TERMINATION
OF RETIREE HEALTH COVERAGE.—In the
case of a qualifying event described in sec-
tion 2203(6), in the case of a qualified
beneficiary described in section 2208(3)(C)
who is not the qualified retiree or spouse
of such retiree, the later of—
‘‘(I) the date that is 36 months
after the earlier of the date the quali-
fied retiree becomes entitled to bene-
fits under title XVIII of the Social Se-
curity Act, or the date of the death of
the qualified retiree; or
‘‘(II) the date that is 36 months
after the date of the qualifying
event.’’.
(c) TYPE OF COVERAGE IN CASE OF TERMINATION
OF RETIREE HEALTH COVERAGE.—Section 2202(1) of
such Act (42 U.S.C. 300bb–2(1)) is amended—
(1) by striking ‘‘The coverage’’ and inserting
the following:
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the coverage’’; and
(2) by adding at the end the following:
‘‘(B) CERTAIN RETIREES.—In the case of
a qualifying event described in section 2203(6),
in applying the first sentence of subparagraph
(A) and the fourth sentence of paragraph (3),
the coverage offered that is the most prevalent
coverage option (as determined under regula-
tions of the Secretary of Labor) continued
under the group health plan (or, if none, under
the most prevalent other plan offered by the
same plan sponsor) shall be treated as the cov-
erage described in such sentence, or (at the op-
tion of the plan and qualified beneficiary) such
other coverage option as may be offered and
elected by the qualified beneficiary involved.’’.
(d) INCREASED LEVEL OF PREMIUMS PERMITTED.—
Section 2202(3) of such Act (42 U.S.C. 300bb–2(3)) is
amended by adding at the end the following new sentence:
‘‘In the case of an individual provided continuation cov-
erage by reason of a qualifying event described in section
2203(6), any reference in subparagraph (A) of this para-
graph to ‘102 percent of the applicable premium’ is
deemed a reference to ‘110 percent of the applicable pre-
mium for employed individuals (and their dependents, if
applicable) for the coverage option referred to in para-
graph (1)(B)’.’’.
(e) NOTICE.—Section 2206(a) of such Act (42 U.S.C.
300bb–6(a)) is amended—
(1) in paragraph (4)(A), by striking ‘‘or (4)’’
and inserting ‘‘(4), or (6)’’; and
(2) by adding at the end the following:
and before the date of the enactment of this Act,
such event shall be deemed (for purposes of such
amendments) to have occurred on the date of the en-
actment of this Act.
(2) ADVANCE NOTICE OF TERMINATIONS AND
REDUCTIONS.—The amendment made by subsection
(e)(2) shall apply to qualifying events occurring on
or after February 10, 2000.
Subtitle C—Amendments to the
Internal Revenue Code of 1986
SEC. 221. COBRA CONTINUATION BENEFITS FOR CERTAIN
RETIRED 
WORKERS 
WHO 
LOSE 
RETIREE
HEALTH COVERAGE.
(a) 
ESTABLISHMENT
OF
NEW
QUALIFYING
EVENT.—
(1) IN GENERAL.—Section 4980B(f)(3) of the
Internal Revenue Code of 1986 is amended by in-
serting after subparagraph (F) the following new
subparagraph:
‘‘(G) The termination of benefits of group
health plan coverage as a result of plan changes
or termination in the case of a covered em-
ployee who is a qualified retiree.’’.
(2) QUALIFIED RETIREE; AND QUALIFIED BEN-
EFICIARY; DEFINED.—Section 4980B(g) of such
Code is amended—
(A) in paragraph (1)—
(i) in subparagraph (A), by inserting
‘‘except as otherwise provided in this para-
graph,’’ after ‘‘means,’’; and
(ii) by adding at the end the following
new subparagraph:
‘‘(E) SPECIAL RULE FOR QUALIFYING RE-
TIREES AND DEPENDENTS.—In the case of a
qualifying 
event 
described 
in 
subsection
(f)(3)(G), the term ‘qualified beneficiary’ means
a qualified retiree and any other individual who,
on the day before such qualifying event, is a
beneficiary under the plan on the basis of the
individual’s relationship to such qualified re-
tiree.’’; and
(B) by adding at the end the following new
paragraphs:
‘‘(5) QUALIFIED RETIREE.—The term ‘qualified
retiree’ means, with respect to a qualifying event de-
scribed in subsection (f)(3)(G), a covered employee
who, at the time of the event—
‘‘(A) has attained 55 years of age;
‘‘(B) was receiving group health coverage
under the plan by reason of the retirement of
the covered employee; and
‘‘(C) is not enrolled under section 1818B
of the Social Security Act (relating to Medicare
benefits for certain individuals who are 55 to
65 years of age).’’.
(b) DURATION OF COVERAGE THROUGH AGE 65.—
Section 4980B(f)(2)(B)(i) of such Code is amended—
(1) in subclause (II), by inserting ‘‘or (3)(G)’’
after ‘‘(3)(F)’’;
(2) in subclause (IV), by striking ‘‘or (3)(F)’’
and inserting ‘‘, (3)(F), or (3)(G)’’;
(3) by redesignating subclause (IV) as sub-
clause (VI);
(4) by redesignating subclause (V) as subclause
(IV) and by moving such clause to immediately fol-
low subclause (III); and
(5) by inserting after such subclause (IV) the
following new subclause:
‘‘(V) SPECIAL
RULE
FOR
CER-
TAIN DEPENDENTS IN CASE OF TER-
MINATION OF RETIREE HEALTH COV-
ERAGE.—In the case of a qualifying
event described in paragraph (3)(G),
in the case of a qualified beneficiary
described in subsection (g)(1)(E) who
is not the qualified retiree or spouse
of such retiree, the later of—
‘‘(a) the date that is 36
months after the earlier of the
date the qualified retiree becomes
entitled to benefits under title
XVIII of the Social Security Act,
or the date of the death of the
qualified retiree; or
‘‘(b) the date that is 36
months after the date of the
qualifying event.’’.
(c) TYPE OF COVERAGE IN CASE OF TERMINATION
OF
RETIREE
HEALTH
COVERAGE.—Section
4980B(f)(2)(A) of such Code is amended—
(1) by striking ‘‘The coverage’’ and inserting
the following:
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), the coverage’’; and
(2) by adding at the end the following:
‘‘(ii) CERTAIN
RETIREES.—In the
case of a qualifying event described in
paragraph (3)(G), in applying the first
sentence of clause (i) and the fourth sen-
tence of subparagraph (C), the coverage
offered that is the most prevalent coverage
option (as determined under regulations of
the Secretary of Labor) continued under
the group health plan (or, if none, under
the most prevalent other plan offered by
the same plan sponsor) shall be treated as
the coverage described in such sentence, or
(at the option of the plan and qualified
beneficiary) such other coverage option as
may be offered and elected by the qualified
beneficiary involved.’’.
(d) INCREASED LEVEL OF PREMIUMS PERMITTED.—
Section 4980B(f)(2)(C) of such Code is amended by add-
ing at the end the following new sentence: ‘‘In the case
of an individual provided continuation coverage by reason
of a qualifying event described in paragraph (3)(G), any
reference in clause (i) of this subparagraph to ‘102 per-
cent of the applicable premium’ is deemed a reference to
‘110 percent of the applicable premium for employed indi-
viduals (and their dependents, if applicable) for the cov-
erage option referred to in subparagraph (A)(ii)’.’’.
(e) NOTICE.—Section 4980B(f)(6) of such Code is
amended—
(1) in subparagraph (D)(i), by striking ‘‘or
(F)’’ and inserting ‘‘(F), or (G)’’; and
(2) by adding at the end the following:
‘‘The notice under subparagraph (D)(i) in the case of a
qualifying event described in paragraph (3)(G) shall be
provided at least 90 days before the date of the qualifying
event. Such notice shall include information with respect
to eligibility for enrollment under section 1818B of the
Social Security Act (relating to medicare benefits for cer-
tain individuals who are 55 to 65 years of age).’’.
(f) ELECTION OF MEDICARE COVERAGE IN LIEU OF
CONTINUATION
COVERAGE.—Section 4980B(g)(1) of
such Code (as amended by subsection (a)(2)) is amended
further by adding at the end the following new subpara-
graph:
‘‘(F) EXCLUSION
FOR
CERTAIN
INDIVID-
UALS
ELECTING
MEDICARE
ENROLLMENT.—
Such term does not include an individual who
is enrolled under section 1818B of the Social
Security Act (relating to Medicare benefits for
certain individuals who are 55 to 65 years of
age).’’.
(g) EFFECTIVE DATES.—
(1) IN GENERAL.—The amendments made by
this section (other than subsection (e)(2)) shall
apply to qualifying events occurring during plan
years ending after August 1, 1996. In the case of
a qualifying event occurring on or after such date
and before the date of the enactment of this Act,
such event shall be deemed (for purposes of such
amendments) to have occurred on the date of the
enactment of this Act.
(2) ADVANCE NOTICE OF TERMINATIONS AND
REDUCTIONS.—The amendment made by subsection
(e)(2) shall apply to qualifying events occurring on
or after February 10, 2000.
TITLE III—NOTICE
REQUIREMENTS
SEC. 301. ADVANCE NOTICE OF MATERIAL REDUCTIONS IN
COVERED SERVICES UNDER GROUP HEALTH
PLANS.
(a) ADVANCE NOTICE.—
(1) IN
GENERAL.—Section 104(b)(1) of the
Employee Retirement Income Security Act of 1974
(29 U.S.C. 1024(b)(1)) is amended—
(A) by redesignating subparagraphs (A)
and (B) as clauses (i) and (ii), respectively;
(B) by striking ‘‘(1) The administrator’’
and inserting ‘‘(1)(A) The administrator’’;
individual first becomes a participant or such other bene-
ficiary first receives benefits under the plan.’’.
(2) DETERMINATION BY SECRETARY.—Section
104 of such Act (29 U.S.C. 1024) is further amend-
ed by redesignating subsection (d) as subsection (e)
and by inserting after subsection (c) the following
new subsection:
‘‘(d) A material modification described in section
102(a)(1) that is a reduction in covered services or bene-
fits provided in the case of a group health plan (as defined
in section 733(a)(1))) relating to retiree health benefits
that is subject to the requirements of subsection (b)(1)(D)
may not take effect until after 6 months after the Sec-
retary receives written notice of the modification from the
administrator and after the Secretary determines that
such modification does not violate the plan, including col-
lective bargaining agreements. The determination of
whether any such modification constitutes such a violation
shall be made by the Secretary during such 6-month pe-
riod, and any such modification shall be deemed not to
be effective until the Secretary issues such determination.
Any such determination shall be treated as a final order
subject to review under section 502(k).’’.
(3) ADVANCE NOTICE TO SECRETARY.—Section
104(b)(1) of such Act (29 U.S.C. 1024(b)(1)) is
amended, in the fourth sentence following subpara-
graph (B), by inserting before the period the fol-
lowing: ‘‘, or in the case of any such modification
that is a reduction in covered services or benefits
provided in the case of a group health plan relating
to retiree health benefits, not later than 180 days
before the effective date of such modification.’’.
(4) CIVIL PENALTY.—Section 502(c)(1) of such
Act (29 U.S.C. 1132(c)(1)) is amended by striking
‘‘or section 101(e)(1)’’ and inserting ‘‘, section
101(e)(1), or section 104(b)(1)(D)’’.
(b) ENFORCEMENT.—
(1) REQUIREMENTS.—Section 4980B of the In-
ternal Revenue Code of 1986 is amended by redesig-
nating subsection (g) as subsection (h) and by in-
serting after subsection (f) the following new sub-
section:
‘‘(g) NOTICE OF MODIFICATION IN HEALTH BENE-
FITS.—
‘‘(1) IN GENERAL.—A group health plan meets
the requirements of this subsection, in the case of a
material modification described in section 102(a)(1)
of the Employee Retirement Income Security Act of
1974 that is a reduction in covered services or bene-
fits provided in the case of a group health plan (as
defined in section 733(a)(1)) of such Act) relating to
retiree health benefits, if—
‘‘(A) the plan sponsor complies with sec-
tion 104(b)(1)(D) of such Act; and
‘‘(B) such modification takes effect only
after the Secretary of Labor makes the deter-
mination required by section 104(d) of such Act
that such modification does not violate the plan,
including collective bargaining agreements.
‘‘(2) NONCOMPLIANCE PERIOD.—For the pur-
poses of subsection (b), the noncompliance period
with respect to this subsection shall be determined
without regard to paragraph (2)(B)(ii) of subsection
(b).’’.
(2) CONFORMING AMENDMENTS.—
(A) Subsection (a) of section 4980B of
such Code is amended by striking ‘‘subsection
(f)’’ and inserting ‘‘subsections (f) and (g)’’.
(B) 
Clause 
(iv)(II) 
of 
section
4980B(f)(2)(B) of such Code is amended by
striking ‘‘subsection (g)(1)(D)’’ and inserting
‘‘subsection (h)(1)(D)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to material modifica-
tions occurring on or after February 10, 2000.
Æ