I
105TH CONGRESS
1ST SESSION
H. R. 211
To amend the Internal Revenue Code of 1986 to assure continued health
insurance coverage of retired workers.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 7, 1997
Mr. KLECZKA (for himself, Mr. STARK, Mr. BARRETT of Wisconsin, Ms.
MCKINNEY, Mr. WAXMAN, Mr. HILLIARD, Mr. KILDEE, Mr. SANDERS,
Mr. MARTINEZ, Mr. EVANS, Mr. MANTON, Mr. LAFALCE, Mr. PALLONE,
Ms. NORTON, Ms. SLAUGHTER, Mrs. CLAYTON, Mr. LEWIS of Georgia,
Mr. COYNE, Mr. CLAY, Ms. DELAURO, and Mr. RANGEL) introduced the
following bill; which was referred to the Committee on Ways and Means,
and in addition to the Committees on Commerce and Education and the
Workforce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 to assure
continued health insurance coverage of retired workers.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Health Care Assurance
for Retired Employees Act of 1997’’.
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
(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’’;
(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 summary
description of any material modification described in sec-
tion 102(a)(1) that is a reduction 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 ben-
efits shall be furnished to participants and beneficiaries
(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 706(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 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 by reason of clause (i) shall by 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—
‘‘(i) who 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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