article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Health Care Assurance for Retired Employees Act of 1996''. 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 (as amended by section 101(c)(1)(B) of the Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191)) 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 following: ``(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 modification or change described in section 102(a)(1) 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 benefits, a summary description of such modification or change shall be furnished to participants and beneficiaries not later than 180 days before the effective date of the modification or change. In any case in which an individual first becomes a participant under a group health plan during any such 180-day period with respect to such a modification or change or (in the case of any other beneficiary under the plan) first receives benefits under the plan during such 180-day period, the requirements of the preceding sentence may be met by providing the summary description of such modification or change not later than the date on which such individual first becomes a participant or such other beneficiary first receives benefits under the plan.''. (2) Determination by Secretary.--Section 104 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1024) is further amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection: ``(d) A change or modification in covered services or benefits provided in the case of a group health plan relating to retiree health benefits that is subject to the requirements of subsection (b)(1)(D) may not take effect until after the Secretary determines that such change or modification does not violate the plan, including collective bargaining agreements.''. (3) Advance notice to secretary.--Section 104(a)(1)(D) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1024(a)(1)(D)) is amended by inserting before the period the following: ``, or in the case of any such modifications and changes in covered services or benefits provided in the case of a group health plan relating to retiree health benefits, not later than 180 days before the effective date of such modification or change.''. (4) Civil penalty.--Section 502(c)(1) of such Act (29 U.S.C. 1132(c)(1)) is amended by striking ``or section 101(e)(1)'' and inserting ``, section 101(e)(1), or section 104(b)(1)(D)''. (b) Enforcement.-- (1) Requirements.--Section 4980B of the Internal Revenue Code of 1986 is amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection: ``(g) Notice of change or modification in health benefits.-- ``(1) In general.--A group health plan meets the requirements of this subsection if-- ``(A) the plan sponsor complies with section 104(b)(1)(D) of the Employee Retirement Income Security Act of 1974 (relating to providing advance notice of modification or change in retiree health benefits provided under a group health plan); and ``(B) such modification or change in retiree health benefits in a group health plan takes effect after the Secretary of Labor makes the determination required by section 104(d) of such Act that such change or modification does not violate the plan, including collective bargaining agreements. ``(2) Noncompliance period.--For the purposes 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 Internal Revenue Code of 1986 is amended by adding at the end the following: ``(F) Coverage for persons 55 and older until eligible for medicare.--In the case of a covered employee who has attained the age of 55 before a qualifying event described in paragraph (3)(B)-- ``(i) in no event shall the period of continued coverage under subparagraph (B)(i) with respect to such event end before the applicable date under subparagraph (B)(iv), and ``(ii) the premium requirements for any period of continuation of coverage solely be reason of clause (i) shall be determined by substituting `110 percent' for `102 percent' in subparagraph (C)(i), unless 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 Enrollment.--The second sentence of section 1839(b) of the Social Security Act (42 U.S.C. 1395r(b)) is amended by inserting ``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 who-- ``(i) at the time the individual first satisfies paragraph (1) or (2) of section 1836-- ``(I) is enrolled in a group health plan described 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 subparagraph (B). ``(B) The special enrollment period referred to in subparagraph (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 effect 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 section 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.
summary: Health Care Assurance for Retired Employees Act of 1996 - Amends the Employee Retirement Income Security Act of 1974, as amended by the Health Insurance Portability and Accountability Act of 1996, to require advance notice to participants and the Secretary of Labor of material reductions in group health plan covered services. Prohibits any such change from taking effect until the Secretary determines that it does not violate the plan, including collective bargaining agreements. Amends the Internal Revenue Code to require qualified pension plans to provide qualifying persons 55 years of age or older a coverage continuation option until they are eligible for Medicare. Amends title XVIII (Medicare) of the Social Security Act to provide retired workers who lose their retiree health benefits with specified Medicare enrollment and coverage protections.