[Congressional Record Volume 141, Number 78 (Thursday, May 11, 1995)]
[Extensions of Remarks]
[Pages E1001-E1004]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                   WORKING FAMILIES HEALTH ACCESS ACT

                                 ______


                         HON. NANCY L. JOHNSON

                             of connecticut

                    in the house of representatives

                         Wednesday, May 10, 1995
  Mrs. JOHNSON of Connecticut. Mr. Speaker, as a step toward creating a 
national health care policy that assures continuity of coverage for all 
working Americans, I am introducing the Working Families Health Access 
Act of 1995 and invite your co-sponsorship.
  The text of the bill follows:
                                H.R. --

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     [[Page E1002]]
     
     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Working Families Health 
     Access Act of 1995''.

     SEC. 2. PROMOTING THE CONTINUITY AND PORTABILITY OF HEALTH 
                   COVERAGE.

       (a) In general.--Subtitle D of the Internal Revenue Code of 
     1986 is amended by inserting after chapter 44 the following 
     new chapter:

      ``CHAPTER 45--CONTINUITY AND PORTABILITY OF HEALTH COVERAGE
``Sec. 4986. Imposition of tax.
``Sec. 4987. Nondiscrimination based on health status.
``Sec. 4988. Limited use of preexisting condition exclusions.
``Sec. 4989. Guaranteed renewability of health insurance coverage.
``Sec. 4990. Relation to State standards.
``Sec. 4991. Definitions.
     ``SEC. 4986. IMPOSITION OF TAX FOR FAILURE TO MEET CONTINUITY 
                   AND PORTABILITY STANDARDS.

       ``(a) Insured Health Plans.--
       ``(1) In general.--In the case of any health insurance 
     policy which fails to meet the applicable standards specified 
     in this chapter at any time during a calendar year, there is 
     hereby imposed a tax equal to 25 percent of the premiums 
     received under such policy during the calendar year.
       ``(2) Liability for tax.--The tax imposed by paragraph (1) 
     shall be paid by the issuer of the policy.
       ``(3) Treatment of prepaid health coverage.--For purposes 
     of this subsection:
       ``(A) In general.--In the case of any prepaid health 
     arrangement--
       ``(i) such arrangement shall be treated as a health 
     insurance policy,
       ``(ii) the payments or premiums referred to in subparagraph 
     (B)(i) shall be treated as premiums received for a health 
     insurance policy, and
       ``(iii) the person referred to in subparagraph (B)(i) shall 
     be treated as the issuer.
       ``(B) Prepaid health arrangement.--For purposes of 
     subparagraph (A), the term `prepaid health arrangement' means 
     an arrangement under which--
       ``(i) fixed payments or premiums are received as 
     consideration for any person's agreement to provide or 
     arrange for the provision of accident or health coverage 
     regardless of how such coverage is provided or arranged to be 
     provided, and
       ``(ii) substantially all the risks of the rates of 
     utilization of services is assumed by such person or the 
     provider of such services.
       ``(4) Insurance policy.--For purposes of this subsection, 
     the term `insurance policy' means any policy or other 
     instrument whereby a contract of insurance is issued, 
     renewed, or extended.
       ``(5) Premium.--For purposes of this subsection, the term 
     `premium' means the gross amount of premiums and other 
     consideration (including advance premiums, deposits, fees, 
     and assessments) arising from policies issued by a person 
     acting as the primary insurer, adjusted for any return or 
     additional premiums paid as a result of endorsements, 
     cancellations, audits, or retrospective rating.
       ``(b) Self-Insured Health Plans.--
       ``(1) In general.--In the case of a self-insured health 
     plan which fails to meet the applicable standards specified 
     in this chapter at any time during a calendar year, there is 
     hereby imposed a tax equal to 25 percent of the health 
     coverage expenditures for such calendar year under such plan.
       ``(2) Liability for tax.--The tax imposed by paragraph (1) 
     shall be paid by the plan sponsor.
       ``(3) Self-insured health plan.--For purposes of this 
     subsection, the term `self-insured health plan' means any 
     plan for providing accident or health coverage if any portion 
     of such coverage is provided other than through an insurance 
     policy.
       ``(4) Health coverage expenditures.--For purposes of this 
     subsection, the health coverage expenditures of any self-
     insured health plan for any calendar year are the aggregate 
     expenditures for such year for health coverage provided under 
     such plan.
       ``(c) Limitations on Imposition.--
       ``(1) Tax not to apply where failure not discovered 
     exercising reasonable diligence.--No tax shall be imposed 
     under this section on any failure for which it is established 
     to the satisfaction of the Secretary that none of the persons 
     liable for the tax knew, or exercising reasonable diligence 
     would have known, that such failure existed.
       ``(2) Tax not to apply to certain failures corrected within 
     30 days.--No tax shall be imposed by subsection (a) or (b) 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 person liable for the tax knew, 
     or exercising
      reasonable diligence would have known, that such failure 
     existed.
       ``(3) 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 this 
     section to the extent that the payment of such tax would be 
     excessive relative to the failure involved.

     ``SEC. 4987. NONDISCRIMINATION BASED ON HEALTH STATUS.

       ``(a) Coverage Under Group Health Plans.--A group health 
     plan and a carrier offering health insurance coverage in 
     connection with such a plan may not establish or impose 
     eligibility, continuation, enrollment, or contribution 
     requirements for an individual based on factors directly 
     related to the health status, medical condition, claims 
     experience, receipt of health care, medical history, 
     disability, or evidence of insurability of the individual.
       ``(b) Individual Coverage.--
       ``(1) In general.--A carrier offering health insurance 
     coverage (other than in connection with a group health plan) 
     may not establish or impose eligibility, continuation, or 
     enrollment requirements for a qualifying individual (as 
     defined in paragraph (2)) based on factors directly related 
     to the health status, medical condition, claims experience, 
     receipt of health care, medical history, disability, or 
     evidence of insurability of the individual.
       ``(2) Qualifying individual defined.--For purposes of 
     paragraphs (1), the term `qualifying individual' means an 
     individual who meets all of the following requirements:
       ``(A) The individual is in a period of qualifying previous 
     coverage (as defined in paragraph (3)) which is at least 6 
     months long.
       ``(B) The individual is not eligible for coverage under any 
     group health plan (including continuation coverage under 
     section 4980B) and has not lost such coverage but for a 
     failure to make required premium payments or contributions or 
     due to fraud or misrepresentation of material fact.
       ``(C) If the individual's most recent coverage during the 
     period of qualifying previous coverage under subparagraph (A) 
     was health insurance coverage not in connection with a group 
     health plan, such coverage was discontinued or terminated by 
     the carrier only on the basis of--
       ``(i) a change in residence of the individual so that the 
     individual no longer resided within a service area of a 
     carrier with respect to such coverage, or
       ``(ii) a change in the individual's status so that the 
     individual was no longer eligible for dependent coverage, if 
     the individual previously was only eligible for such coverage 
     as a dependent.

     Nothing in subparagraph (C) shall be construed as preventing 
     a carrier from waiving the application of such subparagraph 
     during an annual open enrollment period or otherwise.
       ``(3) Period of qualifying previous coverage defined.--For 
     purposes of this chapter, the term `period of qualifying 
     previous coverage' means the period--
       ``(A) beginning on the date an individual is enrolled under 
     a group health plan or is provided health insurance coverage, 
     and
       ``(B) ending on the date the individual is neither covered 
     under a group health plan or covered under health insurance 
     coverage (including coverage described in section 4991(2)(D)) 
     for a continuous period of more than 2 months.

     SEC. 4988. LIMITED USE OF PREEXISTING CONDITION EXCLUSIONS.

       ``(a) In General.--A carrier offering health insurance 
     coverage and a group health plan may impose a limitation or 
     exclusion of benefits relating to treatment of a condition 
     based on the fact that the condition is a preexisting 
     condition (as defined in subsection (c)) only if the 
     following requirements are met:
       ``(1) Limitations to 3-month lock-back.--The condition was 
     diagnosed or treated during the period not more than 3 months 
     before the date of enrollment for such coverage or under such 
     plan.
       ``(2) Limitation on exclusion period.--
       ``(A) General rule of maximum of 6-month exclusion.--
     Subject to paragraph (3), the limitation or exclusion extends 
     for a period not more than 6 months (or 12 months in the case 
     of a late enrollee described in subparagraph (B)) after such 
     date of enrollment.
       ``(B) Late enrollee described.--
       ``(i) In general.--Except as provided in clause (ii), a 
     late enrollee described in this subparagraph with respect to 
     a group health plan is an individual who becomes covered 
     under the plan but who, at the time the individual first was 
     eligible to elect such coverage, had elected not to be 
     covered under the plan.
       ``(ii) Exception for individuals with continuous 
     coverage.--An individual shall not be considered to be a late 
     enrollee with respect to a plan if the individual establishes 
     that, with respect to the period beginning on the date the 
     individual first could have obtained coverage under the plan 
     and until the date the individual was so covered, there was 
     no period of more than 2 months during all of which the 
     individual neither had health insurance coverage (including 
     coverage described in subparagraph (C) or (D) of section 
     4991(2)) or was covered under any group health plan.
       ``(3) Credit for previous qualifying coverage.--In the case 
     of an individual who is in a period of qualifying previous 
     coverage (as defined in section 4987(b)(3)) as of the date of 
     enrollment for health insurance coverage or under the group 
     health
      plan, the limitation or exclusion period under paragraph 
     (2)(A) shall be reduced by the length of such period of 
     qualifying previous coverage.
       ``(4) Exception for treatment of pregnancy.--The limitation 
     or exclusion does not apply to treatment relating to 
     pregnancy.
       ``(5) Exception for certain dependent coverage.--
       (A) Newborns.--The limitation or exclusion does not apply 
     to a child who has health insurance coverage (or is covered 
     under a group health plan) as a dependent within 1 month of 
     the birthdate until such time as the child does not have such 
     coverage (or is not so covered) for a continuous period of 
     more than 2 months. [[Page E1003]] 
       (B) Adopted children.--The limitation or exclusion does not 
     apply (beginning on the date of adoption) to an adopted child 
     who has health insurance coverage (or is covered under a 
     group health plan) within 1 month of such date until such 
     time as the child does not have such coverage (or is not so 
     covered) for a continuous period of more than 2 months.
       ``(b) Limitation on Use of Delayed Coverage In Lieu of 
     Preexisting Exclusion Limitations.--
       ``(1) In general.--A carrier offering health insurance 
     coverage and a group health plan providing coverage, with 
     respect to an individual, may delay the effective date of 
     coverage of the individual beyond the first date of the month 
     beginning after the date of election of the coverage only if 
     the following requirements are met:
       ``(A) Limitation on delay period.--Subject to paragraph 
     (2), such additional delay does not extend over a period of 
     longer than 2 months (or 3 months in the case of a late 
     enrollee described in subsection (a)(2)(B)).
       ``(B) No subsequent application of any preexisting 
     exclusion.--After the period of such additional delay, no 
     limitation or exclusion described in subsection (a) may be 
     applied.
       ``(C) No premiums.--No premium or required contribution may 
     be charged for the period before the effective date of 
     coverage.
     Nothing in this paragraph shall waive the applicable 
     requirements of subsection (a).
       ``(2) Voluntary waiver.--The additional delay may extend 
     over a period longer than the period specified under 
     paragraph (1)(A) if the individual involved waives the 
     protection provided under such paragraph.
       ``(c) Preexisting Condition Defined.--For purposes of this 
     section, the term `preexisting condition' means, with respect 
     to coverage under health insurance coverage or under a group 
     health plan, a condition which was diagnosed or treated for a 
     condition, or for which a reasonably prudent person would 
     have sought medical care diagnosis or treatment, within the 
     3-month period ending on the day before the date of 
     enrollment (without regard to any delayed coverage period).

     ``SEC. 4989. GUARANTEED RENEWABILITY OF HEALTH INSURANCE 
                   COVERAGE.

       ``(a) In General.--Except as provided in subsection (b), a 
     carrier offering health insurance coverage shall guarantee 
     that such coverage may be renewed or continued in force at 
     the option of the policyholder or contractholder.
       ``(b) Grounds for Refusal to Renew.--
       ``(1) In general.--Subject to paragraphs (3) and (4), a 
     carrier offering health insurance coverage may cancel or 
     refuse to renew such coverage--
       ``(A) for nonpayment of premium or contribution in 
     accordance with the terms of the coverage;
       ``(B) for fraud or misrepresentation of material fact;
       ``(C) because of a general discontinuation or termination 
     of coverage, but only if the carrier provides prior notice of 
     such discontinuation or termination and if the conditions 
     described in clause (i) or (ii) of paragraph (2)(A) are met;
       ``(D) in the case of coverage offered in connection with a 
     group health plan, for failure of the plan to maintain 
     participation rules consistent with paragraph (4); or
       ``(E) in the case of coverage that is continuation coverage 
     under section 4980B, for loss of eligibility to continue such 
     coverage.
       ``(2) Conditions for discontinuation.--
       ``(A) In general.--
       ``(i) Nondiscriminatory substitution of alternative 
     coverage.--The conditions described in this clause are the 
     following:
       ``(I) The carrier is no longer offering health insurance 
     coverage to new policyholders or contractholders.
       ``(II) The carrier is offering to the previously covered 
     policyholder or contractholder the option to purchase any 
     other health insurance coverage currently being offered to 
     new policyholders or contractholders.
       ``(III) The discontinuation or termination of coverage and 
     option to replace with other coverage is made uniformly 
     without regard to the health status or insurability of any 
     person provided health insurance coverage.
       ``(ii) General discontinuation of coverage in a state.--The 
     conditions described in this clause are that the carrier is 
     discontinuing and not renewing all health insurance coverage 
     within a class of coverage (as defined in subparagraph (B)) 
     in a State.
       ``(B) Classes of coverage.--For purposes of subparagraph 
     (A)(ii), each of the following is considered a separate class 
     of health insurance coverage:
       ``(i) Individual coverage.--Health insurance coverage not 
     offered in connection with any group health plan.
       ``(ii) Small employer group coverage.--Health insurance 
     coverage offered to small employers (as defined by State law) 
     in connection with any group health plan for covered 
     employees and their dependents.
       ``(iii) Other group coverage.--Health insurance coverage 
     offered in connection with a group health plan and not 
     described in clause (ii).
       ``(3) Application of geographic limitations to coverage 
     provided through a network arrangement.--
       ``(A) In general.--Coverage under health insurance or under 
     a group health plan that consists primarily of coverage 
     through a network arrangement (as defined in subparagraph 
     (B)) may be denied to individuals who neither live nor reside 
     in the service area of the arrangement, but only if such 
     denial is applied uniformly, without regard to the health 
     status or the insurability of particular individuals.
       ``(B) Network arrangements.--For purposes of subparagraph 
     (A), the term `network arrangement' means, with respect to a 
     group health plan or under health insurance coverage, an 
     arrangement under such plan or coverage whereby providers 
     agree to provide items and services covered under the 
     arrangement to individuals covered under the plan or who have 
     such coverage.
       ``(4) Minimum participation requirements.--A carrier that 
     offers health insurance coverage in connection with a group 
     health plan that covers the employees of one or more 
     employers may require that a minimum percentage of eligible 
     employees of such an employer obtain such coverage if such 
     percentage is applied uniformly to all such coverage offered 
     to employers of comparable size.

     ``SEC. 4990. RELATION TO STATE STANDARDS.

       ``Nothing in this chapter shall prevent a State from 
     establishing, implementing, or continuing in effect standards 
     related to health insurance coverage (including the issuance, 
     renewal, or rating of such coverage) if such standards are at 
     least as stringent as the standards established under this 
     chapter with respect to such coverage.

     ``SEC. 4991. DEFINITIONS.

       ``For purposes of this chapter--
       ``(1) Carrier.--The term `carrier' means--
       ``(A) a licensed insurance company;
       ``(B) an entity offering prepaid hospital or medical 
     service plan;
       ``(C) a health maintenance organization; and
       ``(D) any similar entity which (i) is engaged in the 
     business of providing a plan of health insurance or health 
     benefits or services and (ii) is regulated under State law 
     for solvency.
       ``(2) Health insurance coverage.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `health insurance coverage' means any hospital or 
     medical service policy or certificate, hospital or medical 
     service plan contract, or health maintenance organization 
     group contract offered by a carrier.
       ``(B) Exception.--Such term does not include any of the 
     following (or any combination of the following):
       ``(i) Coverage only for accident, dental, vision, or 
     disability income, or any combination thereof.
       ``(ii) Medicare supplemental health insurance.
       ``(iii) Coverage issued as a supplement to liability 
     insurance.
       ``(iv) Liability insurance, including general liability 
     insurance and automobile liability insurance.
       ``(v) Workers' compensation or similar insurance.
       ``(vi) Automobile medical-payment insurance.
       ``(vii) Coverage providing wages or payments in lieu of 
     wages for any period during which an employee is absent from 
     work on account of sickness or injury.
       ``(viii) A long-term care insurance coverage, including a 
     nursing home fixed indemnity policy (unless the Secretary of 
     Health and Human Services, in consultation with the 
     Secretaries of Labor and of the Treasury, determines that 
     such coverage is sufficiently comprehensive so that it should 
     be treated as health insurance coverage.)
       ``(ix) Any coverage not described in any preceding clause 
     which consists of benefit payments, on a periodic basis, for 
     a specified disease or illness or period of hospitalization 
     without regard to the costs incurred or services rendered 
     during the period to which the payments relate.
       ``(x) Such other coverage as the Secretary of Health and 
     Human Services, in consultation with the Secretaries of Labor 
     and of the Treasury, determines is not health insurance 
     coverage.
       ``(C) Treatment of state risk pools.--Except for purposes 
     of sections 4987(b)(3), 4988(a)(2)(B)(ii), and 4988(a)(3), 
     such term does not include coverage provided through a State 
     risk pool, uncompensated care pool or similar subsidized 
     program.
       ``(D) Public plans counted for purposes of qualifying 
     previous coverage.--For purposes of sections 4987(b)(3), 
     4988(a)(2)(B)(ii), and 4988(a)(3), such term also includes 
     coverage under any of the following:
       ``(i) The medicare program under title XVIII of the Social 
     Security Act.
       ``(ii) A State plan under title XIX of such Act.
       ``(iii) A program of the Indian Health Service.
       ``(iv) The Civilian Health and Medical Program of the 
     Uniformed Services (CHAMPUS) under title 10, United States 
     Code.
       ``(v) Any other similar governmental health insurance 
     program (including a program described in subparagraph (C)).
       ``(3) Group health plan.--The term `group health plan' has 
     the meaning given such term in section 5000(b)(1), but does 
     not include any type of coverage excluded from the definition 
     of health insurance coverage under paragraph (2)(B) or (C) 
     and does not include any plan unless at least one of the 
     following requirements is met:
       ``(A) Any portion of the premium or benefits under the plan 
     is paid by or on behalf of the employer. [[Page E1004]] 
       ``(B) An eligible employee or dependent is reimbursed, 
     whether through wage adjustments or otherwise, by or on 
     behalf of the employer for any portion of the premium.
       ``(C) The health benefit plan is treated by the employer, 
     or any of the eligible employees or dependents, as part of a 
     plan or program for the purposes of section 162, section 25, 
     or section 106 of the Internal Revenue Code of 1986.
       ``(4) State.--The term `State' includes the District of 
     Columbia, Puerto Rico, the Virgin Islands, Guam, American 
     Samoa, and the Northern Mariana Islands.''
       (b) Effective Date.--
       (1) In general.--The amendments made by subsection (a) 
     shall apply to individuals who commence health insurance 
     coverage or coverage under a group health plan after the 
     first day of the first month beginning more than 6 months 
     after the date of the enactment of this Act.
       (2) Plan year exception.--Such amendments shall not apply 
     to plan years ending before the first day referred to in 
     paragraph (1).
       (c) Clerical Amendment.--The table of chapters for subtitle 
     D is amended by inserting after the item relating to chapter 
     44 the following new item:

``Chapter 45. Continuity and portability of health coverage.''
     SEC. 3. CHANGES IN COBRA CONTINUATION REQUIREMENTS.

       (a) More Affordable Coverage Through Requirement of Lower-
     Cost Health Plan Choices.--
       (1) In general.--Section 4980B(f) of the Internal Revenue 
     Code of 1986 is amended--
       (A) in paragraph (1), by striking ``, continuation coverage 
     under the plan'' and inserting ``and as selected by the 
     qualified beneficiary under this subsection, continuation 
     coverage of the type described in subparagraph (A), (F)(i), 
     or (F)(ii) of paragraph (2)'';
       (B) in paragraph (2)(A), by striking ``The coverage'' and 
     inserting ``Unless the coverage is the type of coverage 
     described in clause (i) or (ii) of subparagraph (F), the 
     coverage'';
       (C) in paragraph (2)(C)--
       (i) in clause (i), by inserting ``(or in the case of 
     alternative continuation coverage described in clause (i) or 
     (ii) of subparagraph (F), 69 percent or 52 percent, 
     respectively, of such applicable premium)'' after ``for such 
     period'', and
       (ii) in the last sentence by inserting ``, `69 percent', or 
     `52 percent''' after `` `102 percent''' and by inserting ``, 
     `100 percent', or `75 percent', respectively,'';
       (D) by adding at the end of paragraph (2) the following new 
     subparagraph:
       ``(F) Types of alternative continuation coverage 
     required.--
       ``(i) Coverage with two-thirds actuarial value.--The type 
     of coverage described in this clause is coverage which--
       ``(I) has an actuarial value (determined with respect to 
     the similarly situated beneficiaries referred to in 
     subparagraph (A)) of not less than \2/3\ of the actuarial 
     value (determined with respect to such beneficiaries) of the 
     reference coverage, and
       ``(II) meets the requirements of clause (iii).
       ``(ii) Coverage with one-half actuarial value.--The type of 
     coverage described in this clause is coverage which--
       ``(I) has an actuarial value (determined with respect to 
     the similarly situated beneficiaries referred to in 
     subparagraph (A)) of not less than \1/2\ of the actuarial 
     value (determined with respect to such beneficiaries) of the 
     reference coverage, and
       ``(II) meets the requirements of clause (iii).
       ``(iii) Requirements relating to general availability and 
     preexisting conditions.--Coverage meets the requirements of 
     this clause if the coverage--
       ``(I) is made available to all qualified beneficiaries who 
     become eligible for coverage under this subsection after the 
     effective date of this subparagraph, and
       ``(II) does not impose any restriction or limitation on 
     coverage based on a preexisting condition unless such 
     restriction or limitation could be imposed under the coverage 
     described in subparagraph (A).
       ``(iv) Reference coverage defined.--For purposes of this 
     subparagraph, the term `reference coverage'
      means, with respect to a group health plan, the costliest 
     continuation coverage available under subparagraph (A) 
     under the plan, excluding coverage in which an 
     insignificant proportion of the eligible individuals is 
     enrolled.''; and
       (E) by adding at the end of paragraph (4) the following new 
     subparagraph:
       ``(D) Computation based on full coverage.--For purposes of 
     this section, the applicable premium shall be computed based 
     on the type of coverage described in paragraph (2)(A).''
       (2) Effective date.--The amendments made by this subsection 
     shall apply to plan years beginning on or after the first day 
     of the first month beginning at least 6 months after the date 
     of the enactment of this Act.
       (b) Continuation Coverage for Certain Formerly Covered 
     Dependent Spouses and Children.--
       (1) In general.--Section 4980B(f) of such Code is amended 
     by adding at the end the following new paragraph:
       ``(9) Capture of delayed divorce or separation.--
       ``(A) In general.--For purposes of this section, if a 
     covered employee disenrolls from coverage (or fails to renew 
     coverage of) a qualified beneficiary within the 12-month 
     period preceding the date of the divorce or legal separation 
     of the employee from the employee's spouse, the divorce or 
     separation shall be treated as a qualifying event described 
     in paragraph (3)(C) and the loss of coverage shall be 
     considered to be a result (and by reason) of such event.
       ``(B) Exception.--Subparagraph (A) shall not apply to a 
     qualified beneficiary if--
       ``(i) the beneficiary waives the rights under such 
     subparagraph, or
       ``(ii) the qualified beneficiary at the time of the 
     qualifying event or at the time of the disenrollment or 
     failure to renew coverage has coverage under a group health 
     plan (other than by reason of this paragraph) if the plan 
     does not contain any exclusion or limitation with respect to 
     any preexisting condition of such beneficiary.''
       (2) Treatment of period before delayed divorce or 
     separation.--Subparagraph (D) of section 4980B(f)(2) of such 
     Act is amended by adding at the end the following new 
     sentence: ``For purposes of applying any preexisting 
     condition limitation or restriction, any period beginning on 
     the date of the disenrollment or failure to renew coverage 
     referred to in paragraph (9)(A) and ending on the date of the 
     divorce or separation referred to in such paragraph shall not 
     be treated as a break in coverage if such paragraph applies 
     to the qualified beneficiary.''.
       (3) Treatment of annulments.--Section 4980B(g) of such Code 
     is amended by adding at the end the following new paragraph:
       ``(5) Treatment of annulment as divorce.--The term 
     `divorce' includes an annulment.''.
       (4) Effective date.--The amendments made by this section 
     shall apply to divorces, legal separations, and annulments 
     occurring more than 60 days after the date of the enactment 
     of this Act.
       (c) Elimination of Termination of Continuation Coverage by 
     Reason of Medicare Eligibility Through End Stage Renal 
     Disease.--
       (1) In general.--Subclause (II) of section 
     4980B(f)(2)(B)(iv) of such Code is amended by inserting 
     ``other than by reason of section 226A of such Act'' after 
     ``the Social Security Act''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to covered employees and qualified beneficiaries 
     who become entitled to benefits under title XVIII of the 
     Social Security Act pursuant to section 226A of such Act on 
     or after the first day of the first month that begins after 
     the date of the enactment of this Act.
     

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