Home > Data > Subtitle D > Chapter 43 > Sec. 4980b. Failure
Satisfy Continuation Coverage Requirements Of Group Health Plans
Last Updated: January 8, 2012
(a) General rule
There is hereby imposed a tax on the failure of a group health
plan to meet the requirements of subsection (f) with respect to any
qualified beneficiary.
(b) Amount of tax
(1) In general
The amount of the tax imposed by subsection (a) on any failure
with respect to a qualified beneficiary shall be $100 for each
day in the noncompliance period with respect to such failure.
(2) Noncompliance period
For purposes of this section, the term "noncompliance period"
means, with respect to any failure, the period -
(A) beginning on the date such failure first occurs, and
(B) ending on the earlier of -
(i) the date such failure is corrected, or
(ii) the date which is 6 months after the last day in the
period applicable to the qualified beneficiary under
subsection (f)(2)(B) (determined without regard to clause
(iii) thereof).
If a person is liable for tax under subsection (e)(1)(B) by
reason of subsection (e)(2)(B) with respect to any failure, the
noncompliance period for such person with respect to such failure
shall not begin before the 45th day after the written request
described in subsection (e)(2)(B) is provided to such person.
(3) Minimum tax for noncompliance period where failure discovered
after notice of examination
Notwithstanding paragraphs (1) and (2) of subsection (c) -
(A) In general
In the case of 1 or more failures with respect to a qualified
beneficiary -
(i) which are not corrected before the date a notice of
examination of income tax liability is sent to the employer,
and
(ii) which occurred or continued during the period under
examination,
the amount of tax imposed by subsection (a) by reason of such
failures with respect to such beneficiary shall not be less
than the lesser of $2,500 or the amount of tax which would be
imposed by subsection (a) without regard to such paragraphs.
(B) Higher minimum tax where violations are more than de
minimis
To the extent violations by the employer (or the plan in the
case of a multiemployer plan) for any year are more than de
minimis, subparagraph (A) shall be applied by substituting
"$15,000" for "$2,500" with respect to the employer (or such
plan).
(c) Limitations on amount of tax
(1) Tax not to apply where failure not discovered exercising
reasonable diligence
No tax shall be imposed by subsection (a) on any failure during
any period for which it is established to the satisfaction of the
Secretary that none of the persons referred to in subsection (e)
knew, or exercising reasonable diligence would have known, that
such failure existed.
(2) Tax not to apply to failures corrected within 30 days
No tax shall be imposed by subsection (a) on any failure if -
(A) such failure was due to reasonable cause and not to
willful neglect, and
(B) such failure is corrected during the 30-day period
beginning on the 1st date any of the persons referred to in
subsection (e) knew, or exercising reasonable diligence would
have known, that such failure existed.
(3) $100 limit on amount of tax for failures on any day with
respect to a qualified beneficiary
(A) In general
Except as provided in subparagraph (B), the maximum amount of
tax imposed by subsection (a) on failures on any day during the
noncompliance period with respect to a qualified beneficiary
shall be $100.
(B) Special rule where more than 1 qualified beneficiary
If there is more than 1 qualified beneficiary with respect to
the same qualifying event, the maximum amount of tax imposed by
subsection (a) on all failures on any day during the
noncompliance period with respect to such qualified
beneficiaries shall be $200.
(4) Overall limitation for unintentional failures
In the case of failures which are due to reasonable cause and
not to willful neglect -
(A) Single employer plans
(i) In general
In the case of failures with respect to plans other than
multiemployer plans, the tax imposed by subsection (a) for
failures during the taxable year of the employer shall not
exceed the amount equal to the lesser of -
(I) 10 percent of the aggregate amount paid or incurred
by the employer (or predecessor employer) during the
preceding taxable year for group health plans, or
(II) $500,000.
(ii) Taxable years in the case of certain controlled groups
For purposes of this subparagraph, if not all persons who
are treated as a single employer for purposes of this section
have the same taxable year, the taxable years taken into
account shall be determined under principles similar to the
principles of section 1561.
(B) Multiemployer plans
(i) In general
In the case of failures with respect to a multiemployer
plan, the tax imposed by subsection (a) for failures during
the taxable year of the trust forming part of such plan shall
not exceed the amount equal to the lesser of -
(I) 10 percent of the amount paid or incurred by such
trust during such taxable year to provide medical care (as
defined in section 213(d)) directly or through insurance,
reimbursement, or otherwise, or
(II) $500,000.
For purposes of the preceding sentence, all plans of which
the same trust forms a part shall be treated as 1 plan.
(ii) Special rule for employers required to pay tax
If an employer is assessed a tax imposed by subsection (a)
by reason of a failure with respect to a multiemployer plan,
the limit shall be determined under subparagraph (A) (and not
under this subparagraph) and as if such plan were not a
multiemployer plan.
(C) Special rule for persons providing benefits
In the case of a person described in subsection (e)(1)(B)
(and not subsection (e)(1)(A)), the aggregate amount of tax
imposed by subsection (a) for failures during a taxable year
with respect to all plans shall not exceed $2,000,000.
(5) Waiver by Secretary
In the case of a failure which is due to reasonable cause and
not to willful neglect, the Secretary may waive part or all of
the tax imposed by subsection (a) to the extent that the payment
of such tax would be excessive relative to the failure involved.
(d) Tax not to apply to certain plans
This section shall not apply to -
(1) any failure of a group health plan to meet the requirements
of subsection (f) with respect to any qualified beneficiary if
the qualifying event with respect to such beneficiary occurred
during the calendar year immediately following a calendar year
during which all employers maintaining such plan normally
employed fewer than 20 employees on a typical business day,
(2) any governmental plan (within the meaning of section
414(d)), or
(3) any church plan (within the meaning of section 414(e)).
(e) Liability for tax
(1) In general
Except as otherwise provided in this subsection, the following
shall be liable for the tax imposed by subsection (a) on a
failure:
(A)(i) In the case of a plan other than a multiemployer plan,
the employer.
(ii) In the case of a multiemployer plan, the plan.
(B) Each person who is responsible (other than in a capacity
as an employee) for administering or providing benefits under
the plan and whose act or failure to act caused (in whole or in
part) the failure.
(2) Special rules for persons described in paragraph (1)(B)
(A) No liability unless written agreement
Except in the case of liability resulting from the
application of subparagraph (B) of this paragraph, a person
described in subparagraph (B) (and not in subparagraph (A)) of
paragraph (1) shall be liable for the tax imposed by subsection
(a) on any failure only if such person assumed (under a legally
enforceable written agreement) responsibility for the
performance of the act to which the failure relates.
(B) Failure to cover qualified beneficiaries where current
employees are covered
A person shall be treated as described in paragraph (1)(B)
with respect to a qualified beneficiary if -
(i) such person provides coverage under a group health plan
for any similarly situated beneficiary under the plan with
respect to whom a qualifying event has not occurred, and
(ii) the -
(I) employer or plan administrator, or
(II) in the case of a qualifying event described in
subparagraph (C) or (E) of subsection (f)(3) where the
person described in clause (i) is the plan administrator,
the qualified beneficiary,
submits to such person a written request that such person
make available to such qualified beneficiary the same
coverage which such person provides to the beneficiary
referred to in clause (i).
(f) Continuation coverage requirements of group health plans
(1) In general
A group health plan meets the requirements of this subsection
only if the coverage of the costs of pediatric vaccines (as
defined under section 2162 of the Public Health Service Act) (!1)
is not reduced below the coverage provided by the plan as of May
1, 1993, and only if each qualified beneficiary who would lose
coverage under the plan as a result of a qualifying event is
entitled to elect, within the election period, continuation
coverage under the plan.
(2) Continuation coverage
For purposes of paragraph (1), the term "continuation coverage"
means coverage under the plan which meets the following
requirements:
(A) 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 under the plan is modified for any group
of similarly situated beneficiaries, the coverage shall also be
modified in the same manner for all individuals who are
qualified beneficiaries under the plan pursuant to this
subsection in connection with such group.
(B) 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:
(i) Maximum required period
(I) General rule for terminations and reduced hours
In the case of a qualifying event described in paragraph
(3)(B), except as provided in subclause (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 (other than a qualifying event
described in paragraph (3)(F)) occurs during the 18 months
after the date of a qualifying event described in paragraph
(3)(B), the date which is 36 months after the date of the
qualifying event described in paragraph (3)(B).
(III) Special rule for certain bankruptcy proceedings
In the case of a qualifying event described in paragraph
(3)(F) (relating to bankruptcy proceedings), the date of
the death of the covered employee or qualified beneficiary
(described in subsection (g)(1)(D)(iii)), or in the case of
the surviving spouse or dependent children of the covered
employee, 36 months after the date of the death of the
covered employee.
(IV) General rule for other qualifying events
In the case of a qualifying event not described in
paragraph (3)(B) or (3)(F), the date which is 36 months
after the date of the qualifying event.
(V) Special rule for PBGC recipients
In the case of a qualifying event described in paragraph
(3)(B) with respect to a covered employee who (as of such
qualifying event) has a nonforfeitable right to a benefit
any portion of which is to be paid by the Pension Benefit
Guaranty Corporation under title IV of the Employee
Retirement Income Security Act of 1974, notwithstanding
subclause (I) or (II), the date of the death of the covered
employee, or in the case of the surviving spouse or
dependent children of the covered employee, 24 months after
the date of the death of the covered employee. The
preceding sentence shall not require any period of coverage
to extend beyond February 12, 2011.
(VI) Special rule for TAA-eligible individuals
In the case of a qualifying event described in paragraph
(3)(B) with respect to a covered employee who is (as of the
date that the period of coverage would, but for this
subclause or subclause (VII), otherwise terminate under
subclause (I) or (II)) a TAA-eligible individual (as
defined in paragraph (5)(C)(iv)(II)), the period of
coverage shall not terminate by reason of subclause (I) or
(II), as the case may be, before the later of the date
specified in such subclause or the date on which such
individual ceases to be such a TAA-eligible individual. The
preceding sentence shall not require any period of coverage
to extend beyond February 12, 2011.
(VII) Medicare entitlement followed by qualifying event
In the case of a qualifying event described in paragraph
(3)(B) that occurs less than 18 months after the date the
covered employee became entitled to benefits under title
XVIII of the Social Security Act, the period of coverage
for qualified beneficiaries other than the covered employee
shall not terminate under this clause before the close of
the 36-month period beginning on the date the covered
employee became so entitled.
(VIII) Special rule for disability
In the case of a qualified beneficiary who is determined,
under title II or XVI of the Social Security Act, to have
been disabled at any time during the first 60 days of
continuation coverage under this section, any reference in
subclause (I) or (II) to 18 months is deemed a reference to
29 months (with respect to all qualified beneficiaries),
but only if the qualified beneficiary has provided notice
of such determination under paragraph (6)(C) before the end
of such 18 months.
(ii) End of plan
The date on which the employer ceases to provide any group
health plan to any employee.
(iii) 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 subparagraph (C)) 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.
(iv) Group health plan coverage or medicare entitlement
The date on which the qualified beneficiary first becomes,
after the date of the election -
(I) covered under any other group health plan (as an
employee or otherwise) which does not contain any exclusion
or limitation with respect to any preexisting condition of
such beneficiary (other than such an exclusion or
limitation which does not apply to (or is satisfied by)
such beneficiary by reason of chapter 100 of this title,
part 7 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974, or title XXVII of the Public
Health Service Act), or
(II) in the case of a qualified beneficiary other than a
qualified beneficiary described in subsection (g)(1)(D)
entitled to benefits under title XVIII of the Social
Security Act.
(v) Termination of extended coverage for disability
In the case of a qualified beneficiary who is disabled at
any time during the first 60 days of continuation coverage
under this section, the month that begins more than 30 days
after the date of the final determination under title II or
XVI of the Social Security Act that the qualified beneficiary
is no longer disabled.
(C) Premium requirements
The plan may require payment of a premium for any period of
continuation coverage, except that such premium -
(i) shall not exceed 102 percent of the applicable premium
for such period, and
(ii) may, at the election of the payor, be made in monthly
installments.
In no event may the plan require the payment of any premium
before the day which is 45 days after the day on which the
qualified beneficiary made the initial election for
continuation coverage. In the case of an individual described
in the last sentence of subparagraph (B)(i), any reference in
clause (i) of this subparagraph to "102 percent" is deemed a
reference to "150 percent" for any month after the 18th month
of continuation coverage described in subclause (I) or (II) of
subparagraph (B)(i).
(D) No requirement of insurability
The coverage may not be conditioned upon, or discriminate on
the basis of lack of, evidence of insurability.
(E) Conversion option
In the case of a qualified beneficiary whose period of
continuation coverage expires under subparagraph (B)(i), 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.
(3) Qualifying event
For purposes of this subsection, 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 subsection, would result in the loss of coverage of a
qualified beneficiary -
(A) The death of the covered employee.
(B) The termination (other than by reason of such employee's
gross misconduct), or reduction of hours, of the covered
employee's employment.
(C) The divorce or legal separation of the covered employee
from the employee's spouse.
(D) The covered employee becoming entitled to benefits under
title XVIII of the Social Security Act.
(E) A dependent child ceasing to be a dependent child under
the generally applicable requirements of the plan.
(F) A proceeding in a case under title 11, United States
Code, commencing on or after July 1, 1986, with respect to the
employer from whose employment the covered employee retired at
any time.
In the case of an event described in subparagraph (F), a loss of
coverage includes a substantial elimination of coverage with
respect to a qualified beneficiary described in subsection
(g)(1)(D) within one year before or after the date of
commencement of the proceeding.
(4) Applicable premium
For purposes of this subsection -
(A) 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).
(B) Special rule for self-insured plans
To the extent that a plan is a self-insured plan -
(i) In general
Except as provided in clause (ii), 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.
(ii) Determination on basis of past cost
If a plan administrator elects to have this clause 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 subparagraph (C),
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 12-month period ending on the
last day of the sixth month of such preceding determination
period.
(iii) Clause (ii) not to apply where significant change
A plan administrator may not elect to have clause (ii)
apply in any case in which there is any significant
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 subparagraph (C).
(C) 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.
(5) Election
For purposes of this subsection -
(A) Election period
The term "election period" means the period which -
(i) begins not later than the date on which coverage
terminates under the plan by reason of a qualifying event,
(ii) is of at least 60 days' duration, and
(iii) ends not earlier than 60 days after the later of -
(I) the date described in clause (i), or
(II) in the case of any qualified beneficiary who
receives notice under paragraph (6)(D), the date of such
notice.
(B) 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 subsection (g)(1) shall be deemed
to include an election of continuation coverage on behalf of
any other qualified 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 entitled to make a separate selection among such
types of coverage.
(C) Temporary extension of COBRA election period for certain
individuals
(i) In general
In the case of a nonelecting TAA-eligible individual and
notwithstanding subparagraph (A), such individual may elect
continuation coverage under this subsection during the 60-day
period that begins on the first day of the month in which the
individual becomes a TAA-eligible individual, but only if
such election is made not later than 6 months after the date
of the TAA-related loss of coverage.
(ii) Commencement of coverage; no reach-back
Any continuation coverage elected by a TAA-eligible
individual under clause (i) shall commence at the beginning
of the 60-day election period described in such paragraph and
shall not include any period prior to such 60-day election
period.
(iii) Preexisting conditions
With respect to an individual who elects continuation
coverage pursuant to clause (i), the period -
(I) beginning on the date of the TAA-related loss of
coverage, and
(II) ending on the first day of the 60-day election
period described in clause (i),
shall be disregarded for purposes of determining the 63-day
periods referred to in section 9801(c)(2), section 701(c)(2)
of the Employee Retirement Income Security Act of 1974, and
section 2701(c)(2) (!1) of the Public Health Service Act.
(iv) Definitions
For purposes of this subsection:
(I) Nonelecting TAA-eligible individual
The term "nonelecting TAA-eligible individual" means a
TAA-eligible individual who has a TAA-related loss of
coverage and did not elect continuation coverage under this
subsection during the TAA-related election period.
(II) TAA-eligible individual
The term "TAA-eligible individual" means an eligible TAA
recipient (as defined in paragraph (2) of section 35(c))
and an eligible alternative TAA recipient (as defined in
paragraph (3) of such section).
(III) TAA-related election period
The term "TAA-related election period" means, with
respect to a TAA-related loss of coverage, the 60-day
election period under this subsection which is a direct
consequence of such loss.
(IV) TAA-related loss of coverage
The term "TAA-related loss of coverage" means, with
respect to an individual whose separation from employment
gives rise to being an TAA-eligible individual, the loss of
health benefits coverage associated with such separation.
(6) Notice requirement
In accordance with regulations prescribed by the Secretary -
(A) 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.
(B) The employer of an employee under a plan must notify the
plan administrator of a qualifying event described in
subparagraph (A), (B), (D), or (F) of paragraph (3) with
respect to such employee within 30 days (or, in the case of a
group health plan which is a multiemployer plan, such longer
period of time as may be provided in the terms of the plan) of
the date of the qualifying event.
(C) Each covered employee or qualified beneficiary is
responsible for notifying the plan administrator of the
occurrence of any qualifying event described in subparagraph
(C) or (E) of paragraph (3) within 60 days after the date of
the qualifying event and each qualified beneficiary who is
determined, under title II or XVI of the Social Security Act,
to have been disabled at any time during the first 60 days of
continuation coverage under this section is responsible for
notifying the plan administrator of such determination within
60 days after the date of the determination and for notifying
the plan administrator within 30 days of the date of any final
determination under such title or titles that the qualified
beneficiary is no longer disabled.
(D) The plan administrator shall notify -
(i) in the case of a qualifying event described in
subparagraph (A), (B), (D), or (F) of paragraph (3), any
qualified beneficiary with respect to such event, and
(ii) in the case of a qualifying event described in
subparagraph (C) or (E) of paragraph (3) where the covered
employee notifies the plan administrator under subparagraph
(C), any qualified beneficiary with respect to such event,
of such beneficiary's rights under this subsection.
The requirements of subparagraph (B) shall be considered
satisfied in the case of a multiemployer plan in connection with
a qualifying event described in paragraph (3)(B) if the plan
provides that the determination of the occurrence of such
qualifying event will be made by the plan administrator. For
purposes of subparagraph (D), any notification shall be made
within 14 days (or, in the case of a group health plan which is a
multiemployer plan, such longer period of time as may be provided
in the terms of the plan) of the date on which the plan
administrator is notified under subparagraph (B) or (C),
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.
(7) Covered employee
For purposes of this subsection, the term "covered employee"
means an individual who is (or was) provided coverage under a
group health plan by virtue of the performance of services by the
individual for 1 or more persons maintaining the plan (including
as an employee defined in section 401(c)(1)).
(8) Optional extension of required periods
A group health plan shall not be treated as failing to meet the
requirements of this subsection solely because the plan provides
both -
(A) that the period of extended coverage referred to in
paragraph (2)(B) commences with the date of the loss of
coverage, and
(B) that the applicable notice period provided under
paragraph (6)(B) commences with the date of the loss of
coverage.
(g) Definitions
For purposes of this section -
(1) 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.
Such term shall also include a child who is born to or placed
for adoption with the covered employee during the period of
continuation coverage under this section.
(B) Special rule for terminations and reduced employment
In the case of a qualifying event described in subsection
(f)(3)(B), the term "qualified beneficiary" includes the
covered employee.
(C) Exception for nonresident aliens
Notwithstanding subparagraphs (A) and (B), the term
"qualified beneficiary" does not include an individual whose
status as a covered employee is attributable to a period in
which such individual was a nonresident alien who received no
earned income (within the meaning of section 911(d)(2)) from
the employer which constituted income from sources within the
United States (within the meaning of section 861(a)(3)). If an
individual is not a qualified beneficiary pursuant to the
previous sentence, a spouse or dependent child of such
individual shall not be considered a qualified beneficiary by
virtue of the relationship of the individual.
(D) Special rule for retirees and widows
In the case of a qualifying event described in subsection
(f)(3)(F), the term "qualified beneficiary" includes a covered
employee who had retired on or before the date of substantial
elimination of coverage and any other individual who, on the
day before such qualifying event, is a beneficiary under the
plan -
(i) as the spouse of the covered employee,
(ii) as the dependent child of the covered employee, or
(iii) as the surviving spouse of the covered employee.
(2) Group health plan
The term "group health plan" has the meaning given such term by
section 5000(b)(1). Such term shall not include any plan
substantially all of the coverage under which is for qualified
long-term care services (as defined in section 7702B(c)).
(3) 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.
(4) Correction
A failure of a group health plan to meet the requirements of
subsection (f) with respect to any qualified beneficiary shall be
treated as corrected if -
(A) such failure is retroactively undone to the extent
possible, and
(B) the qualified beneficiary is placed in a financial
position which is as good as such beneficiary would have been
in had such failure not occurred.
For purposes of applying subparagraph (B), the qualified
beneficiary shall be treated as if he had elected the most
favorable coverage in light of the expenses he incurred since the
failure first occurred.
-SOURCE
(Added Pub. L. 100-647, title III, Sec. 3011(a), Nov. 10, 1988, 102
Stat. 3616; amended Pub. L. 101-239, title VI, Secs. 6202(b)(3)(B),
6701(a)-(c), title VII, Secs. 7862(c)(2)(B), (3)(C), (4)(B),
(5)(A), 7891(d)(1)(B), (2)(A), Dec. 19, 1989, 103 Stat. 2233, 2294,
2295, 2432, 2433, 2446; Pub. L. 101-508, title XI, Sec. 11702(f),
Nov. 5, 1990, 104 Stat. 1388-515; Pub. L. 103-66, title XIII, Sec.
13422(a), Aug. 10, 1993, 107 Stat. 566; Pub. L. 104-188, title I,
Sec. 1704(g)(1)(A), (t)(21), Aug. 20, 1996, 110 Stat. 1880, 1888;
Pub. L. 104-191, title III, Sec. 321(d)(1), title IV, Sec. 421(c),
Aug. 21, 1996, 110 Stat. 2058, 2088; Pub. L. 107-210, div. A, title
II, Sec. 203(e)(3), Aug. 6, 2002, 116 Stat. 971; Pub. L. 111-5,
div. B, title I, Sec. 1899F(b), Feb. 17, 2009, 123 Stat. 429; Pub.
L. 111-344, title I, Sec. 116(b), Dec. 29, 2010, 124 Stat. 3616.)
-MISC1
AMENDMENTS
2010 - Subsec. (f)(2)(B)(i)(V), (VI). Pub. L. 111-344 substituted
"February 12, 2011" for "December 31, 2010".
2009 - Subsec. (f)(2)(B)(i)(V). Pub. L. 111-5, Sec. 1899F(b)(2),
added subcl. (V). Former subcl. (V) redesignated (VII).
Subsec. (f)(2)(B)(i)(VI). Pub. L. 111-5, Sec. 1899F(b)(2), added
subcl. (VI). Former subcl. (VI) redesignated (VIII).
Pub. L. 111-5, Sec. 1899F(b)(1), designated concluding provisions
as subcl. (VI) and inserted heading.
Subsec. (f)(2)(B)(i)(VII), (VIII). Pub. L. 111-5, Sec.
1899F(b)(2), designated subcls. (V) and (VI) as (VII) and (VIII),
respectively.
2002 - Subsec. (f)(5)(C). Pub. L. 107-210 added subpar. (C).
1996 - Subsec. (f)(2)(B)(i). Pub. L. 104-191, Sec. 421(c)(1)(A),
in concluding provisions, substituted "at any time during the first
60 days of continuation coverage under this section" for "at the
time of a qualifying event described in paragraph (3)(B)", struck
out "with respect to such event" after "(II) to 18 months", and
inserted "(with respect to all qualified beneficiaries)" after "29
months".
Pub. L. 104-188, Sec. 1704(t)(21), made technical amendment to
directory language of Pub. L. 101-239, Sec. 6701(a)(1). See 1989
Amendment note below.
Subsec. (f)(2)(B)(i)(V). Pub. L. 104-188, Sec. 1704(g)(1)(A),
substituted "Medicare entitlement followed by qualifying event" for
"Qualifying event involving medicare entitlement" in heading and
amended text generally. Prior to amendment, text read as follows:
"In the case of an event described in paragraph (3)(D) (without
regard to whether such event is a qualifying event), the period of
coverage for qualified beneficiaries other than the covered
employee for such event or any subsequent qualifying event shall
not terminate before the close of the 36-month period beginning on
the date the covered employee becomes entitled to benefits under
title XVIII of the Social Security Act."
Subsec. (f)(2)(B)(iv)(I). Pub. L. 104-191, Sec. 421(c)(1)(B),
inserted "(other than such an exclusion or limitation which does
not apply to (or is satisfied by) such beneficiary by reason of
chapter 100 of this title, part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974, or title XXVII of
the Public Health Service Act)" before ", or".
Subsec. (f)(2)(B)(v). Pub. L. 104-191, Sec. 421(c)(1)(C),
substituted "at any time during the first 60 days of continuation
coverage under this section" for "at the time of a qualifying event
described in paragraph (3)(B)".
Subsec. (f)(6)(C). Pub. L. 104-191, Sec. 421(c)(2), substituted
"at any time during the first 60 days of continuation coverage
under this section" for "at the time of a qualifying event
described in paragraph (3)(B)".
Subsec. (g)(1)(A). Pub. L. 104-191, Sec. 421(c)(3), inserted at
end "Such term shall also include a child who is born to or placed
for adoption with the covered employee during the period of
continuation coverage under this section."
Subsec. (g)(2). Pub. L. 104-191, Sec. 321(d)(1), inserted at end
"Such term shall not include any plan substantially all of the
coverage under which is for qualified long-term care services (as
defined in section 7702B(c))."
1993 - Subsec. (f)(1). Pub. L. 103-66 inserted "the coverage of
the costs of pediatric vaccines (as defined under section 2162 of
the Public Health Service Act) is not reduced below the coverage
provided by the plan as of May 1, 1993, and only if" after "only
if".
1990 - Subsec. (d)(1). Pub. L. 101-508 amended par. (1)
generally. Prior to amendment, par. (1) read as follows: "any
failure of a group health plan to meet the requirements of
subsection (f) if all employers maintaining such plan normally
employed fewer than 20 employees on a typical business day during
the preceding calendar year,".
1989 - Subsec. (f)(2)(B)(i). Pub. L. 101-239, Sec. 6701(a)(1), as
amended by Pub. L. 104-188, Sec. 1704(t)(21), inserted at end "In
the case of a qualified beneficiary who is determined, under title
II or XVI of the Social Security Act, to have been disabled at the
time of a qualifying event described in paragraph (3)(B), any
reference in subclause (I) or (II) to 18 months with respect to
such event is deemed a reference to 29 months, but only if the
qualified beneficiary has provided notice of such determination
under paragraph (6)(C) before the end of such 18 months."
Subsec. (f)(2)(B)(i)(V). Pub. L. 101-239, Sec. 7862(c)(5)(A),
added subcl. (V).
Subsec. (f)(2)(B)(iv). Pub. L. 101-239, Sec. 7862(c)(3)(C),
substituted "entitlement" for "eligibility" in heading and inserted
"which does not contain any exclusion or limitation with respect to
any preexisting condition of such beneficiary" after "or
otherwise)" in subcl. (I).
Subsec. (f)(2)(B)(v). Pub. L. 101-239, Sec. 6701(a)(2), added cl.
(v).
Subsec. (f)(2)(C). Pub. L. 101-239, Sec. 7862(c)(4)(B), amended
last sentence generally. Prior to amendment, last sentence read as
follows: "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."
Pub. L. 101-239, Sec. 6701(b), inserted at end "In the case of an
individual described in the last sentence of subparagraph (B)(i),
any reference in clause (i) of this subparagraph to '102 percent'
is deemed a reference to '150 percent' for any month after the 18th
month of continuation coverage described in subclause (I) or (II)
of subparagraph (B)(i)."
Subsec. (f)(6). Pub. L. 101-239, Sec. 7891(d)(1)(B)(ii), inserted
after and below subpar. (D) the following new flush sentence "The
requirements of subparagraph (B) shall be considered satisfied in
the case of a multiemployer plan in connection with a qualifying
event described in paragraph (3)(B) if the plan provides that the
determination of the occurrence of such qualifying event will be
made by the plan administrator."
Pub. L. 101-239, Sec. 7891(d)(1)(B)(i)(II), inserted "(or, in the
case of a group health plan which is a multiemployer plan, such
longer period of time as may be provided in the terms of the plan)"
after "14 days" in last sentence.
Subsec. (f)(6)(B). Pub. L. 101-239, Sec. 7891(d)(1)(B)(i)(I),
inserted "(or, in the case of a group health plan which is a
multiemployer plan, such longer period of time as may be provided
in the terms of the plan)" after "30 days".
Subsec. (f)(6)(C). Pub. L. 101-239, Sec. 6701(c), inserted before
period at end "and each qualified beneficiary who is determined,
under title II or XVI of the Social Security Act, to have been
disabled at the time of a qualifying event described in paragraph
(3)(B) is responsible for notifying the plan administrator of such
determination within 60 days after the date of the determination
and for notifying the plan administrator within 30 days of the date
of any final determination under such title or titles that the
qualified beneficiary is no longer disabled".
Subsec. (f)(7). Pub. L. 101-239, Sec. 7862(c)(2)(B), substituted
"the performance of services by the individual for 1 or more
persons maintaining the plan (including as an employee defined in
section 401(c)(1))" for "the individual's employment or previous
employment with an employer".
Subsec. (f)(8). Pub. L. 101-239, Sec. 7891(d)(2)(A), added par.
(8).
Subsec. (g)(2). Pub. L. 101-239, Sec. 6202(b)(3)(B), substituted
"section 5000(b)(1)" for "section 162(i)".
EFFECTIVE DATE OF 2010 AMENDMENT
Pub. L. 111-344, title I, Sec. 116(d), Dec. 29, 2010, 124 Stat.
3616, provided that: "The amendments made by this section [amending
this section, section 1162 of Title 29, Labor, and section 300bb-2
of Title 42, The Public Health and Welfare] shall apply to periods
of coverage which would (without regard to the amendments made by
this section) end on or after December 31, 2010."
EFFECTIVE DATE OF 2009 AMENDMENT
Except as otherwise provided and subject to certain applicability
provisions, amendment by Pub. L. 111-5 effective upon the
expiration of the 90-day period beginning on Feb. 17, 2009, see
section 1891 of Pub. L. 111-5, set out as an Effective and
Termination Dates of 2009 Amendment note under section 2271 of
Title 19, Customs Duties.
Pub. L. 111-5, div. B, title I, Sec. 1899F(d), Feb. 17, 2009, 123
Stat. 430, provided that: "The amendments made by this section
[amending this section, section 1162 of Title 29, Labor, and
section 300bb-2 of Title 42, The Public Health and Welfare] shall
apply to periods of coverage which would (without regard to the
amendments made by this section) end on or after the date of the
enactment of this Act [Feb. 17, 2009]."
EFFECTIVE DATE OF 2002 AMENDMENT
Amendment by Pub. L. 107-210 applicable to petitions for
certification filed under part 2 or 3 of subchapter II of chapter
12 of Title 19, Customs Duties, on or after the date that is 90
days after Aug. 6, 2002, except as otherwise provided, see section
151 of Pub. L. 107-210, set out as a note preceding section 2271 of
Title 19.
EFFECTIVE DATE OF 1996 AMENDMENTS
Amendment by section 321(d)(1) of Pub. L. 104-191 applicable to
contracts issued after Dec. 31, 1996, see section 321(f) of Pub. L.
104-191, set out as an Effective Date note under section 7702B of
this title.
Section 421(d) of Pub. L. 104-191 provided that: "The amendments
made by this section [amending this section, sections 1162, 1166,
and 1167 of Title 29, Labor, and sections 300bb-2, 300bb-6, and
300bb-8 of Title 42, The Public Health and Welfare] shall become
effective on January 1, 1997, regardless of whether the qualifying
event occurred before, on, or after such date."
Section 1704(g)(2) of Pub. L. 104-188 provided that: "The
amendments made by this subsection [amending this section, section
1162 of Title 29, Labor, and section 300bb-2 of Title 42, The
Public Health and Welfare] shall apply to plan years beginning
after December 31, 1989."
EFFECTIVE DATE OF 1993 AMENDMENT
Section 13422(b) of Pub. L. 103-66 provided that: "The amendment
made by subsection (a) [amending this section] shall apply with
respect to plan years beginning after the date of the enactment of
this Act [Aug. 10, 1993]."
EFFECTIVE DATE OF 1990 AMENDMENT
Amendment by Pub. L. 101-508 effective as if included in the
provision of the Technical and Miscellaneous Revenue Act of 1988,
Pub. L. 100-647, to which such amendment relates, see section
11702(j) of Pub. L. 101-508, set out as a note under section 59 of
this title.
EFFECTIVE DATE OF 1989 AMENDMENT
Amendment by section 6202(b)(3)(B) of Pub. L. 101-239 applicable
to items and services furnished after Dec. 19, 1989, see section
6202(b)(5) of Pub. L. 101-239, set out as a note under section 162
of this title.
Section 6701(d) of Pub. L. 101-239 provided that: "The amendments
made by this section [amending this section] shall apply to plan
years beginning on or after the date of the enactment of this Act
[Dec. 19, 1989], regardless of whether the qualifying event
occurred before, on, or after such date."
Section 7862(c)(2)(C) of Pub. L. 101-239 provided that: "The
amendments made by this paragraph [amending this section and
section 1167 of Title 29, Labor] shall apply to plan years
beginning after December 31, 1989."
Amendment by section 7862(c)(3)(C) of Pub. L. 101-239 applicable
to (i) qualifying events occurring after Dec. 31, 1989, and (ii) in
the case of qualified beneficiaries who elected continuation
coverage after Dec. 31, 1988, the period for which the required
premium was paid (or was attempted to be paid but was rejected as
such), see section 7862(c)(3)(D) of Pub. L. 101-239, set out as a
note under section 162 of this title.
Section 7862(c)(4)(C) of Pub. L. 101-239 provided that: "The
amendments made by this paragraph [amending this section and
section 1162 of Title 29, Labor] shall apply to plan years
beginning after December 31, 1989."
Section 7862(c)(5)(C) of Pub. L. 101-239 provided that: "The
amendments made by this paragraph [amending this section and
section 1162 of Title 29] shall apply to plan years beginning after
December 31, 1989."
Section 7891(d)(1)(C) of Pub. L. 101-239 provided that: "The
amendments made by this paragraph [amending this section and
section 1166 of Title 29] shall apply with respect to plan years
beginning on or after January 1, 1990."
Section 7891(d)(2)(C) of Pub. L. 101-239 provided that: "The
amendments made by this paragraph [amending this section and
section 1167 of Title 29] shall apply with respect to plan years
beginning on or after January 1, 1990."
EFFECTIVE DATE
Section applicable to taxable years beginning after Dec. 31,
1988, but not applicable to any plan for any plan year to which
section 162(k) of this title (as in effect on the day before Nov.
10, 1988) did not apply by reason of section 10001(e)(2) of Pub. L.
99-272, see section 3011(d) of Pub. L. 100-647, set out as an
Effective Date of 1988 Amendment note under section 162 of this
title.
CONSTRUCTION OF 2002 AMENDMENT
Nothing in amendment by Pub. L. 107-210, other than provisions
relating to COBRA continuation coverage and reporting requirements,
to be construed as creating new mandate on any party regarding
health insurance coverage, see section 203(f) of Pub. L. 107-210,
set out as a note under section 2918 of Title 29, Labor.
NOTIFICATION OF CHANGES IN CONTINUATION COVERAGE
Section 421(e) of Pub. L. 104-191 provided that: "Not later than
November 1, 1996, each group health plan (covered under title XXII
of the Public Health Service Act [42 U.S.C. 300bb-1 et seq.], part
6 of subtitle B of title I of the Employee Retirement Income
Security Act of 1974 [29 U.S.C. 1161 et seq.], and section 4980B(f)
of the Internal Revenue Code of 1986) shall notify each qualified
beneficiary who has elected continuation coverage under such title,
part or section of the amendments made by this section [amending
this section, sections 1162, 1166, and 1167 of Title 29, Labor, and
sections 300bb-2, 300bb-6, and 300bb-8 of Title 42, The Public
Health and Welfare]."
-REFTEXT
REFERENCES IN TEXT
The Public Health Service Act, referred to in subsec. (f)(1),
does not contain a section 2162. The reference probably should be
to section 1928 of the Social Security Act, which is classified to
section 1396s of Title 42, The Public Health and Welfare, and which
relates to pediatric vaccines.
The Social Security Act, referred to in subsec. (f)(2)(B)(i)(IV),
(VII), (VIII), (iv)(II), (v), (3)(D), (6)(C), is act Aug. 14, 1935,
ch. 531, 49 Stat. 620. Titles II, XVI, and XVIII of the Social
Security Act are classified generally to subchapters II (Sec. 401
et seq.), XVI (Sec. 1381 et seq.), and XVIII (Sec. 1395 et seq.),
respectively, of chapter 7 of Title 42, The Public Health and
Welfare. For complete classification of this Act to the Code, see
section 1305 of Title 42 and Tables.
The Employee Retirement Income Security Act of 1974, referred to
in subsecs. (f)(2)(B)(i)(V), (iv)(I), (5)(C)(iii), and (g)(3), is
Pub. L. 93-406, Sept. 2, 1974, 88 Stat. 832. Part 7 of subtitle B
of title I of the Act is classified generally to part 7 (Sec. 1181
et seq.) of subtitle B of subchapter I of chapter 18 of Title 29,
Labor. Sections 3(16)(A) and 701(c)(2) of the Act are classified to
sections 1002(16)(A) and 1181(c)(2), respectively, of Title 29.
Title IV of the Act is classified principally to subchapter III
(Sec. 1301 et seq.) of chapter 18 of Title 29. For complete
classification of this Act to the Code, see Short Title note set
out under section 1001 of Title 29 and Tables.
The Public Health Service Act, referred to in subsec.
(f)(2)(B)(iv)(I), is act July 1, 1944, ch. 373, 58 Stat. 682. Title
XXVII of the Act is classified generally to subchapter XXV (Sec.
300gg et seq.) of chapter 6A of Title 42, The Public Health and
Welfare. For complete classification of this Act to the Code, see
Short Title note set out under section 201 of Title 42 and Tables.
Section 2701 of the Public Health Service Act, referred to in
subsec. (f)(5)(C)(iii), was classified to section 300gg of Title
42, The Public Health and Welfare, was renumbered section 2704,
effective for plan years beginning on or after Jan. 1, 2014, with
certain exceptions, and amended, by Pub. L. 111-148, title I, Secs.
1201(2), 1563(c)(1), formerly Sec. 1562(c)(1), title X, Sec.
10107(b)(1), Mar. 23, 2010, 124 Stat. 154, 264, 911, and was
transferred to section 300gg-3 of Title 42. A new section 2701,
related to fair health insurance premiums, was added and amended by
Pub. L. 111-148, title I, Sec. 1201(4), title X, Sec. 10103(a),
Mar. 23, 2010, 124 Stat. 155, 892, and is classified to section
300gg of Title 42.