TITLE XXII-REQUIREMENTS FOR CERTAIN GROUP HEALTH PLANS FOR CERTAIN STATE AND LOCAL EMPLOYEES

SEC. 2201. STATE AND LOCAL GOVERNMENTAL GROUP HEALTH PLANS MUST PROVIDE CONTINUATION COVERAGE TO CERTAIN INDIVIDUALS.

(a) IN GENERAL.-In accordance with regulations which the Secretary shall prescribe, each group health plan that is maintained by any State that receives funds under this Act, by any political subdivision of such a State, or by any agency or instrumentality of such a State or political subdivision, shall provide, in accordance with this title, that each qualified beneficiary who would lose coverage under the plan as a result of a qualifying event is entitled, under the plan, to elect, within the election period, continuation coverage under the plan.

(b) EXCEPTION FOR CERTAIN PLANS.-Subsection (a) shall not apply to―

(1) any group health plan for any calendar year if all employers maintaining such plan normally employed fewer than 20 employees on a typical business day during the preceding calendar year, or

(2) any group health plan maintained for employees by the government of the District of Columbia or any territory or possession of the United States or any agency or instrumentality. Under regulations, rules similar to the rules of subsections (a) and (b) of section 52 of the Internal Revenue Code of 1954 (relating to employers under common control) shall apply for purposes of paragraph (1).

SEC. 2202. CONTINUATION COVERAGE.

For purposes of section 2201, the term "continuation coverage" means coverage under the plan which meets the following requirements:

(1) TYPE OF BENEFIT COVERAGE.—The coverage must consist of coverage which, as of the time the coverage is being provided, is identical to the coverage provided under the plan to similarly situated beneficiaries under the plan with respect to whom a qualifying event has not occurred. If coverage is modified under the plan for any group of similarly situated beneficiaries, such coverage shall also be modified in the same manner for all individuals who are qualified beneficiaries under the plan pursuant to this part in connection with such group.

(2) PERIOD OF COVERAGE.-The coverage must extend for at least the period beginning on the date of the qualifying event and ending not earlier than the earliest of the following: (A) MAXIMUM REQUIRED PERIOD.—

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(i) GENERAL RULE FOR TERMINATIONS AND REDUCED HOURS. In the case of a qualifying event described in section 2203(2), except as provided in clause (ii), the date which is 18 months after the date of the qualifying event.

(ii) SPECIAL RULE FOR MULTIPLE QUALIFYING EVENTS.-If a qualifying event occurs during the 18 months after the date of a qualifying event described in section 2203(2), the date which is 36 months after the date of the qualifying event described in section 2203(2).

(iii) GENERAL RULE FOR OTHER QUALIFYING EVENTS.— In the case of a qualifying event not described in section 2203(2), the date which is 36 months after the date of the qualifying event.

(B) END OF PLAN.-The date on which the employer ceases to provide any group health plan to any employee.

(C) FAILURE TO PAY PREMIUM.-The date on which coverage ceases under the plan by reason of a failure to make timely payment of any premium required under the plan with respect to the qualified beneficiary. The payment of any premium (other than any payment referred to in the last sentence of paragraph (3)) shall be considered to be timely if made within 30 days after the date due or within such longer period as applies to or under the plan.

(D) REEMPLOYMENT OR MEDICARE ELIGIBILITY.-The date on which the qualified beneficiary first becomes, after the date of the election—

(i) a covered employee under any other group health plan, or

(ii) entitled to benefits under title XVIII of the Social Security Act.

(E) REMARRIAGE OF SPOUSE.-In the case of an individual who is a qualified beneficiary by reason of being the spouse of a covered employee, the date on which the beneficiary remarries and becomes covered under a group health plan.

(3) PREMIUM REQUIREMENTS.-The plan may require payment of a premium for any period of continuation coverage, except that such premium

(A) shall not exceed 102 percent of the applicable premium for such period, and

(B) may, at the election of the payor, be made in monthly installments.

If an election is made after the qualifying event, the plan shall permit payment for continuation coverage during the period preceding the election to be made within 45 days of the date of the election.

(4) NO REQUIREMENT OF INSURABILITY.—The coverage may not be conditioned upon, or discriminate on the basis of lack of, evidence of insurability.

(5) CONVERSION OPTION.-In the case of a qualified beneficiary whose period of continuation coverage expires under paragraph (2)(A), the plan must, during the 180-day period ending

on such expiration date, provide to the qualified beneficiary the option of enrollment under a conversion health plan otherwise generally available under the plan.

SEC. 2203. QUALIFYING EVENT.

For purposes of this title, the term "qualifying event" means, with respect to any covered employee, any of the following events which, but for the continuation coverage required under this title, would result in the loss of coverage of a qualified beneficiary:

(1) The death of the covered employee.

(2) The termination (other than by reason of such employee's gross misconduct), or reduction of hours, of the covered employee's employment.

(3) The divorce or legal separation of the covered employee from the employee's spouse.

(4) The covered employee becoming entitled to benefits under title XVIII of the Social Security Act.

(5) A dependent child ceasing to be a dependent child under the generally applicable requirements of the plan.

SEC. 2204. APPLICABLE PREMIUM.

For purposes of this title

(1) IN GENERAL.-The term "applicable premium" means, with respect to any period of continuation coverage of qualified beneficiaries, the cost to the plan for such period of the coverage for similarly situated beneficiaries with respect to whom a qualifying event has not occurred (without regard to whether such cost is paid by the employer or employee).

(2) SPECIAL RULE FOR SELF-INSURED PLANS.-To the extent that a plan is a self-insured plan

(A) IN GENERAL.-Except as provided in subparagraph (B), the applicable premium for any period of continuation coverage of qualified beneficiaries shall be equal to a reasonable estimate of the cost of providing coverage for such period for similarly situated beneficiaries which

(i) is determined on an actuarial basis, and

(ii) takes into account such factors as the Secretary may prescribe in regulations.

(B) DETERMINATION ON BASIS OF PAST COST.-If a plan administrator elects to have this subparagraph apply, the applicable premium for any period of continuation coverage of qualified beneficiaries shall be equal to

(i) the cost to the plan for similarly situated beneficiaries for the same period occurring during the preceding determination period under paragraph (3), adjusted by

(ii) the percentage increase or decrease in the implicit price deflator of the gross national product (calculated by the Department of Commerce and published in the Survey of Current Business) for the 12month period ending on the last day of the sixth month of such preceding determination period.

(C) SUBPARAGRAPH (B) NOT TO APPLY WHERE SIGNIFICANT CHANGE.-A plan administrator may not elect to have subparagraph (B) apply in any case in which there is any sig

nificant difference, between the determination period and the preceding determination period, in coverage under, or in employees covered by, the plan. The determination under the preceding sentence for any determination period shall be made at the same time as the determination under paragraph (3).

(3) DETERMINATION PERIOD.-The determination of any applicable premium shall be made for a period of 12 months and shall be made before the beginning of such period.

SEC. 2205. ELECTION.

For purposes of this title—

(1) ELECTION PERIOD.—The term "election period" means the period which

(A) begins not later than the date on which coverage ter-
minates under the plan by reason of a qualifying event,
(B) is of at least 60 days' duration, and

(C) ends not earlier than 60 days after the later of—
(i) the date described in subparagraph (A), or

(ii) in the case of any qualified beneficiary who re-
ceives notice under section 2206(4), the date of such
notice.
(2) EFFECT OF ELECTION ON OTHER BENEFICIARIES.-Except as
otherwise specified in an election, any election of continuation
coverage by a qualified beneficiary described in subparagraph
(A)(i) or (B) of section 2208(3) shall be deemed to include an
election of continuation coverage on behalf of any other quali-
fied beneficiary who would lose coverage under the plan by
reason of the qualifying event. If there is a choice among types
of coverage under the plan, each qualified beneficiary is enti-
tled to make a separate selection among such types of cover-
age.

SEC. 2206. NOTICE REQUIREMENTS.

In accordance with regulations prescribed by the Secretary

(1) the group health plan shall provide, at the time of commencement of coverage under the plan, written notice to each covered employee and spouse of the employee (if any) of the rights provided under this subsection,

(2) the employer of an employee under a plan must notify the plan administrator of a qualifying event described in paragraph (1), (2), or (4) of section 2203 within 30 days of the date of the qualifying event,

(3) each covered employee or qualified beneficiary is responsible for notifying the plan administrator of the occurrence of any qualifying event described in paragraph (3) or (5) of section 2203 within 60 days after the date of the qualifying event, and (4) the plan administrator shall notify

(A) in the case of a qualifying event described in paragraph (1), (2), or (4) of section 2203, any qualified beneficiary with respect to such event, and

(B) in the case of a qualifying event described in paragraph (3) or (5) of section 2203 where the covered employee notifies the plan administrator under paragraph (3), any qualified beneficiary with respect to such event,

of such beneficiary's rights under this subsection. For purposes of paragraph (4), any notification shall be made within 14 days of the date on which the plan administrator is notified under paragraph (2) or (3), whichever is applicable, and any such notification to an individual who is a qualified beneficiary as the spouse of the covered employee shall be treated as notification to all other qualified beneficiaries residing with such spouse at the time such notification is made.

SEC. 2207. ENFORCEMENT.

Any individual who is aggrieved by the failure of a State, political subdivision, or agency or instrumentality thereof, to comply with the requirements of this title may bring an action for appropriate equitable relief.

SEC. 2208. DEFINITIONS.

For purposes of this title

(1) GROUP HEALTH PLAN.-The term "group health plan" has the meaning given such term in section 162(i)(3) of the Internal Revenue Code of 1954.

(2) COVERED EMPLOYEE.-The term "covered employee" means an individual who is (or was) provided coverage under a group health plan by virtue of the individual's employment or previous employment with an employer.

(3) QUALIFIED BENEFICIARY.—

(A) IN GENERAL.-The term "qualified beneficiary" means, with respect to a covered employee under a group health plan, any other individual who, on the day before the qualifying event for that employee, is a beneficiary under the plan—

(i) as the spouse of the covered employee, or
(ii) as the dependent child of the employee.

(B) SPECIAL RULE FOR TERMINATIONS AND REDUCED EMPLOYMENT. In the case of a qualifying event described in section 2203(2), the term "qualified beneficiary" includes the covered employee.

(4) PLAN ADMINISTRATOR.-The term "plan administrator" has the meaning given the term "administrator" by section 3(16)(A) of the Employee Retirement Income Security Act of 1974.