SEC. 2. 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
(as amended by section 101(c)(1)(B) of the Health
Insurance Portability and Accountability Act of
1996 (Public Law 104–191)) 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’’;
(C) by striking ‘‘The administrator’’ the
second place it appears and inserting the follow-
ing:
‘‘(B) The administrator’’;
(D) by striking ‘‘If there is a modification’’
and inserting the following:
‘‘(C) If there is a modification’’; and
(E) by adding at the end the following new
subparagraph:
‘‘(D) Notwithstanding subparagraph (C), a modifica-
tion or change described in section 102(a)(1) in covered
services or benefits provided in the case of a group health
plan (as defined in section 706(a)(1))) relating to retiree
health benefits, a summary description of such modifica-
tion or change shall be furnished to participants and bene-
ficiaries not later than 180 days before the effective date
of the modification or change. In any case in which an
individual first becomes a participant under a group
health plan during any such 180-day period with respect
to such a modification or change or (in the case of any
other beneficiary under the plan) first receives benefits
under the plan during such 180-day period, the require-
ments of the preceding sentence may be met by providing
the summary description of such modification or change
not later than the date on which such individual first be-
comes a participant or such other beneficiary first receives
benefits under the plan.’’.
(2) DETERMINATION BY SECRETARY.—Section
104 of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1024) is further amended by
redesignating subsection (d) as subsection (e) and by
inserting after subsection (c) the following new sub-
section:
‘‘(d) A change or modification in covered services or
benefits provided in the case of a group health plan relat-
ing to retiree health benefits that is subject to the require-
ments of subsection (b)(1)(D) may not take effect until
after the Secretary determines that such change or modi-
fication does not violate the plan, including collective bar-
gaining agreements.’’.
(3) ADVANCE NOTICE TO SECRETARY.—Section
104(a)(1)(D) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1024(a)(1)(D)) is
amended by inserting before the period the follow-
ing: ‘‘, or in the case of any such modifications and
changes 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 or change.’’.
(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
CHANGE
OR
MODIFICATION
IN
HEALTH BENEFITS.—
‘‘(1) IN GENERAL.—A group health plan meets
the requirements of this subsection if—
‘‘(A) the plan sponsor complies with sec-
tion 104(b)(1)(D) of the Employee Retirement
Income Security Act of 1974 (relating to pro-
viding advance notice of modification or change
in retiree health benefits provided under a
group health plan); and
‘‘(B) such modification or change in retiree
health benefits in a group health plan takes ef-
fect after the Secretary of Labor makes the de-
termination required by section 104(d) of such
Act that such change or 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 plan years ending
after August 1, 1996.
SEC. 3. CONTINUATION OF COVERAGE FOR PERSONS 55
AND OLDER UNTIL ELIGIBLE FOR MEDICARE.
(a) IN GENERAL.—Section 4980B(f)(2) of the Inter-
nal Revenue Code of 1986 is amended by adding at the
end the following:
‘‘(F) COVERAGE
FOR
PERSONS
AND
OLDER
UNTIL
ELIGIBLE
FOR
MEDICARE.—In
the case of a covered employee who has attained
the age of 55 before a qualifying event de-
scribed in paragraph (3)(B)—
‘‘(i) in no event shall the period of
continued coverage under subparagraph
(B)(i) with respect to such event end be-
fore the applicable date under subpara-
graph (B)(iv), and
‘‘(ii) the premium requirements for
any period of continuation of coverage sole-
ly be reason of clause (i) shall be deter-
mined by substituting ‘110 percent’ for
‘102 percent’ in subparagraph (C)(i), un-
less the last sentence of subparagraph (C)
otherwise applies.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to plan years ending
after August 1, 1996.
SEC. 4. PROTECTIONS UNDER THE MEDICARE PROGRAM
FOR RETIRED WORKERS WHO LOSE RETIREE
HEALTH BENEFITS.
(a) NO PREMIUM PENALTY
FOR LATE ENROLL-
MENT.—The second sentence of section 1839(b) of the So-
cial Security Act (42 U.S.C. 1395r(b)) is amended by in-
serting ‘‘and not pursuant to a special enrollment period
under section 1837(i)(4)’’ after ‘‘section 1837)’’.
(b) SPECIAL MEDICARE ENROLLMENT PERIOD.—
(1) IN GENERAL.—Section 1837(i) of such Act
(42 U.S.C. 1395p(i)) is amended by adding at the
end the following new paragraph:
‘‘(4)(A) In the case of an individual who—
‘‘(i) at the time the individual first satisfies
paragraph (1) or (2) of section 1836—
‘‘(I) is enrolled in a group health plan de-
scribed in section 1862(b)(1)(A)(v) by reason of
the individual’s (or the individual’s spouse’s)
current employment or otherwise, and
‘‘(II) has elected not to enroll (or to be
deemed enrolled) under this section during the
individual’s initial enrollment period; and
‘‘(ii) whose continuous enrollment under such
group health plan is involuntarily terminated at a
time when the enrollment under the plan is not by
reason of the individual’s (or the individual’s
spouse’s) current employment,
there shall be a special enrollment period described in sub-
paragraph (B).
‘‘(B) The special enrollment period referred to in sub-
paragraph (A) is the 6-month period beginning on the date
of the enrollment termination described in subparagraph
(A)(ii).’’.
(2) COVERAGE
PERIOD.—Section 1838(e) of
such Act (42 U.S.C. 1395q(e)) is amended—
(A) by inserting ‘‘or 1837(i)(4)(B)’’ after
‘‘1837(i)(3)’’ the first place it appears, and
(B) by inserting ‘‘or specified in section
1837(i)(4)(A)(i)’’ after ‘‘1837(i)(3)’’ the second
place it appears’’.
(c) PROVIDING FOR MEDIGAP OPEN ENROLLMENT
PERIOD.—Section 1882(s)(2)(A) of such Act (42 U.S.C.
1395ss(s)(2)(A)) is amended—
(1) by inserting ‘‘(i)’’ after ‘‘during’’, and
(2) by inserting before the period at the end the
following: ‘‘or (ii) 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’’.
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—Subject to paragraph (2),
the amendments made by this section shall take ef-
fect on the date of the enactment of this Act and
apply to involuntary terminations of coverage under
a group health plan occurring on or after August 1,
1996.
(2) TRANSITION.—In the case of an involuntary
termination of coverage under a group health plan
that occurred during the period beginning on August
1, 1996, and ending on the date of the enactment
of this Act, the special enrollment period under sec-
tion 1837(i)(4)(B) of the Social Security Act (as
amended by subsection (b)) is deemed to begin as of
the date of the enactment of this Act.
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