(2) PLAN
YEAR
EXCEPTION.—Such amend-
ments shall not apply to plan years ending before
the first day referred to in paragraph (1).
(c) CLERICAL AMENDMENT.—The table of chapters
for subtitle D is amended by inserting after the item relat-
ing to chapter 44 the following new item:
‘‘CHAPTER 45. Continuity and portability of health coverage.’’
SEC. 3. CHANGES IN COBRA CONTINUATION REQUIRE-
MENTS RELATING TO DIVORCES, LEGAL SEP-
ARATIONS, AND ANNULMENTS.
(a) CONTINUATION COVERAGE FOR CERTAIN FOR-
MERLY
COVERED
DEPENDENT
SPOUSES
AND
CHIL-
DREN.—Section 4980B(f) of the Internal Revenue Code
of 1986 is amended by adding at the end the following
new paragraph:
‘‘(9) CAPTURE OF DELAYED DIVORCE OR SEPA-
RATION.—
‘‘(A) IN GENERAL.—For purposes of this
section, if a covered employee disenrolls from
coverage (or fails to renew coverage of) a quali-
fied beneficiary within the 12-month period pre-
ceding the date of the divorce or legal separa-
tion of the employee from the employee’s
spouse, the divorce or separation shall be treat-
ed as a qualifying event described in paragraph
(3)(C) and the loss of coverage shall be consid-
ered to be a result (and by reason) of such
event.
‘‘(B) 
EXCEPTION.—Subparagraph 
(A)
shall not apply to a qualified beneficiary if—
‘‘(i) the beneficiary waives the rights
under such subparagraph, or
‘‘(ii) the qualified beneficiary at the
time of the qualifying event or at the time
of the disenrollment or failure to renew
coverage has coverage under a group
health plan (other than by reason of this
paragraph) if the plan does not contain
any exclusion or limitation with respect to
any preexisting condition of such bene-
ficiary.’’
(b) TREATMENT OF PERIOD BEFORE DELAYED DI-
VORCE OR SEPARATION.—Subparagraph (D) of section
4980B(f)(2) of such Code is amended by adding at the
end the following new sentence: ‘‘For purposes of applying
any preexisting condition limitation or restriction, any pe-
riod beginning on the date of the disenrollment or failure
to renew coverage referred to in paragraph (9)(A) and
ending on the date of the divorce or separation referred
to in such paragraph shall not be treated as a break in
coverage if such paragraph applies to the qualified bene-
ficiary.’’.
(c) 
TREATMENT
OF
ANNULMENTS.—Section
4980B(g) of such Code is amended by adding at the end
the following new paragraph:
‘‘(5) TREATMENT
OF
ANNULMENT
AS
DI-
VORCE.—The term ‘divorce’ includes an annul-
ment.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to divorces, legal separations, and
annulments occurring more than 60 days after the date
of the enactment of this Act.
SEC. 4. TERMINATION OF COBRA CONTINUATION IN CASE
OF ELIGIBILITY FOR GROUP HEALTH COV-
ERAGE WITHOUT IMPOSITION OF PREEXIST-
ING CONDITION EXCLUSION.
(a) IN GENERAL.—Section 4980B(f)(2)(B)(iv)(I) of
the Internal Revenue Code of 1986 is amended—
(1) insert ‘‘, or eligible for coverage in the case
of an employee,’’ after ‘‘otherwise)’’, and
(2) by inserting ‘‘or for which the period in
which such an exclusion or limitation may be applied
has ended under section 4988(a)(2)’’ after ‘‘of such
beneficiary’’.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
subsection (a) shall apply to individuals who com-
mence health insurance coverage or coverage under
a group health plan after the first day of the first
month beginning more than 6 months after the date
of the enactment of this Act.
(2) PLAN
YEAR
EXCEPTION.—Such amend-
ments shall not apply to plan years ending before
the first day referred to in paragraph (1).
Æ
HR 3043 IH——2