text: 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.
target: 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.
feat_title: Health Care Assurance for Retired Employees Act of 1996