A bill to amend title 10, United States Code, to revise the age and service requirements for eligibility to receive retired pay for non-regular service; to expand certain authorities to provide health care benefits for Reserves and their families, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Guard and Reserve Readiness and 
Retention Act of 2004''.

SEC. 2. ELIGIBILITY FOR RETIRED PAY FOR NON-REGULAR SERVICE.

    (a) Age and Service Requirements.--Subsection (a) of section 12731 
of title 10, United States Code, is amended to read as follows:
    ``(a)(1) Except as provided in subsection (c), a person is 
entitled, upon application, to retired pay computed under section 12739 
of this title, if the person--
            ``(A) satisfies one of the combinations of requirements for 
        minimum age and minimum number of years of service (computed 
        under section 12732 of this title) that are specified in the 
        table in paragraph (2);
            ``(B) performed the last six years of qualifying service 
        while a member of any category named in section 12732(a)(1) of 
        this title, but not while a member of a regular component, the 
        Fleet Reserve, or the Fleet Marine Corps Reserve, except that 
        in the case of a person who completed 20 years of service 
        computed under section 12732 of this title before October 5, 
        1994, the number of years of qualifying service under this 
        subparagraph shall be eight; and
            ``(C) is not entitled, under any other provision of law, to 
        retired pay from an armed force or retainer pay as a member of 
        the Fleet Reserve or the Fleet Marine Corps Reserve.
    ``(2) The combinations of minimum age and minimum years of service 
required of a person under subparagraph (A) of paragraph (1) for 
entitlement to retired pay as provided in such paragraph are as 
follows:

``Age, in years, is                        The minimum years of service
  at least:                                   required for that age is:
    53......................................................        34 
    54......................................................        32 
    55......................................................        30 
    56......................................................        28 
    57......................................................        26 
    58......................................................        24 
    59......................................................        22 
    60......................................................     20.''.
    (b) 20-Year Letter.--Subsection (d) of such section is amended by 
striking ``the years of service required for eligibility for retired 
pay under this chapter'' in the first sentence and inserting ``20 years 
of service computed under section 12732 of this title.''.
    (c) Effective Date.--This section and the amendments made by this 
subsection (a) shall take effect on the first day of the first month 
beginning on or after the date of the enactment of this Act and shall 
apply with respect to retired pay payable for that month and subsequent 
months.

SEC. 3. EXPANDED ELIGIBILITY OF READY RESERVE MEMBERS UNDER TRICARE 
              PROGRAM.

    (a) Unconditional Eligibility.--Subsection (a) of section 1076b of 
title 10, United States Code, is amended by striking ``and receive 
benefits'' and all that follows through ``an employer-sponsored health 
benefits plan''.
    (b) Permanent Authority.--Subsection (l) of such section is 
repealed.
    (c) Conforming Repeal of Obsolete Provisions.--Such section is 
further amended--
            (1) by striking subsections (i) and (j); and
            (2) by redesignating subsection (k) as subsection (i).

SEC. 4. CONTINUATION OF NON-TRICARE HEALTH BENEFITS PLAN COVERAGE FOR 
              CERTAIN RESERVES CALLED OR ORDERED TO ACTIVE DUTY AND 
              THEIR DEPENDENTS.

    (a) Required Continuation.--(1) Chapter 55 of title 10, United 
States Code, is amended by inserting after section 1078a the following 
new section:
``Sec. 1078b. Continuation of non-TRICARE health benefits plan coverage 
              for dependents of certain Reserves called or ordered to 
              active duty
    ``(a) Payment of Premiums.--The Secretary concerned shall pay the 
applicable premium to continue in force any qualified health benefits 
plan coverage for the members of the family of an eligible reserve 
component member for the benefits coverage continuation period 
if timely elected by the member in accordance with regulations 
prescribed under subsection (j).
    ``(b) Eligible Member; Family Members.--(1) A member of a reserve 
component is eligible for payment of the applicable premium for 
continuation of qualified health benefits plan coverage under 
subsection (a) while serving on active duty pursuant to a call or order 
issued under a provision of law referred to in section 101(a)(13)(B) of 
this title during a war or national emergency declared by the President 
or Congress.
    ``(2) For the purposes of this section, the members of the family 
of an eligible reserve component member include only the member's 
dependents described in subparagraphs (A), (D), and (I) of section 
1072(2) of this title.
    ``(c) Qualified Health Benefits Plan Coverage.--For the purposes of 
this section, health benefits plan coverage for the members of the 
family of a reserve component member called or ordered to active duty 
is qualified health benefits plan coverage if--
            ``(1) the coverage was in force on the date on which the 
        Secretary notified the reserve component member that issuance 
        of the call or order was pending or, if no such notification 
        was provided, the date of the call or order;
            ``(2) on such date, the coverage applied to the reserve 
        component member and members of the family of the reserve 
        component member; and
            ``(3) the coverage has not lapsed.
    ``(d) Applicable Premium.--The applicable premium payable under 
this section for continuation of health benefits plan coverage for the 
family members of a reserve component member is the amount of the 
premium payable by the member for the coverage of the family members.
    ``(e) Maximum Amount.--The total amount that the Department of 
Defense may pay for the applicable premium of a health benefits plan 
for the family members of a reserve component member under this section 
in a fiscal year may not exceed the amount determined by multiplying--
            ``(1) the sum of one plus the number of the family members 
        covered by the health benefits plan, by
            ``(2) the per capita cost of providing TRICARE coverage and 
        benefits for dependents under this chapter for such fiscal 
        year, as determined by the Secretary of Defense.
    ``(f) Benefits Coverage Continuation Period.--The benefits coverage 
continuation period under this section for qualified health benefits 
plan coverage for the family members of an eligible reserve component 
member called or ordered to active duty is the period that--
            ``(1) begins on the date of the call or order; and
            ``(2) ends on the earlier of--
                    ``(A) the date on which the reserve component 
                member's eligibility for transitional health care under 
                section 1145(a) of this title terminates under 
                paragraph (3) of such section;
                    ``(B) the date on which the reserve component 
                member elects to terminate the continued qualified 
                health benefits plan coverage of the member's family 
                members; or
                    ``(C) December 31, 2005.
    ``(g) Extension of Period of COBRA Coverage.--Notwithstanding any 
other provision of law--
            ``(1) any period of coverage under a COBRA continuation 
        provision (as defined in section 9832(d)(1) of the Internal 
        Revenue Code of 1986) for an eligible reserve component member 
        under this section shall be deemed to be equal to the benefits 
        coverage continuation period for such member under this 
        section; and
            ``(2) with respect to the election of any period of 
        coverage under a COBRA continuation provision (as so defined), 
        rules similar to the rules under section 4980B(f)(5)(C) of such 
        Code shall apply.
    ``(h) Nonduplication of Benefits.--A member of the family of a 
reserve component member who is eligible for benefits under qualified 
health benefits plan coverage paid on behalf of the reserve component 
member by the Secretary concerned under this section is not eligible 
for benefits under the TRICARE program during a period of the coverage 
for which so paid.
    ``(i) Revocability of Election.--A reserve component member who 
makes an election under subsection (a) may revoke the election. Upon 
such a revocation, the member's family members shall become eligible 
for benefits under the TRICARE program as provided for under this 
chapter.
    ``(j) Regulations.--The Secretary of Defense shall prescribe 
regulations for carrying out this section. The regulations shall 
include such requirements for making an election of payment of 
applicable premiums as the Secretary considers appropriate.''.
    (2) The table of sections at the beginning of such chapter is 
amended by inserting after the item relating to section 1078a the 
following new item:

``1078b. Continuation of non-TRICARE health benefits plan coverage for 
                            dependents of certain Reserves called or 
                            ordered to active duty.''.
    (b) Applicability.--Section 1078b of title 10, United States Code 
(as added by subsection (a)), shall apply with respect to calls or 
orders of members of reserve components of the Armed Forces to active 
duty as described in subsection (b) of such section, that are issued by 
the Secretary of a military department before, on, or after the date of 
the enactment of this Act, but only with respect to qualified health 
benefits plan coverage (as described in subsection (c) of such section) 
that is in effect on or after the date of the enactment of this Act.

Summary: Guard and Reserve Readiness Retention Act of 2004 - Makes eligible for retired pay non-regular service reserve personnel who obtain the following age and years of reserve service: (1) 60 and 20; (2) 59 and 22; (3) 58 and 24; (4) 57 and 26; (5) 56 and 28; (6) 55 and 30; (7) 54 and 32; and (8) 53 and 34. (Currently, only those obtaining 60 years of age with 20 years of such service are eligible.)

Removes the requirement that members of the Selected Reserve and the Individual Ready Reserve may be eligible for benefits under TRICARE (a Department of Defense managed health care program) only if such members: (1) are eligible unemployment compensation recipients; or (2) are not eligible for health care benefits under any employer-sponsored health benefits plan. Makes such eligibility permanent (currently terminates December 31, 2004).

Directs the Secretary of the military department concerned to pay the applicable premium to continue in force any qualified health plan coverage for a reserve member (and his or her dependents) while the member is serving on active duty pursuant to a call or order issued during a war or national emergency declared by the President or Congress. Requires the continuation of COBRA coverage during such period. Prohibits simultaneous coverage under both the qualified health plan and TRICARE.