AMENDMENTS RELATED TO TITLE XVIII OF THE REFORM ACT.

SEC. 7862. AMENDMENTS RELATED TO TITLE XVIII OF THE REFORM ACT. (a) Amendment Related to Section 1852 or the Reform Act.—Paragraph (1) of section 4402(h) of ERISA is amended by striking “January 12, 1982” the second place it appears and inserting “January 16, 1982”. 103 STAT. 2432 (b) Amendment Related to Section 1879 of the Reform Act.— (1) Subsection (u) of section 1879 of the Reform Act is amended— (A) by striking “206(h)” each place it appears in paragraphs (1) and (4)(B) and inserting “204(h)”, (B) by redesignating paragraph (4) as paragraph (5), and (C) by inserting after paragraph (3) the following: “(4) Correction of cross reference.—Section 4218(1)(A) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1398(1)(A)) is amended by striking ‘section 4062(d)’ and inserting ‘section 4069(b)’.” (2) So much of section 204(h)(2) of ERISA as precedes subparagraph (A) thereof is amended by adjusting the left-hand margination thereof to full measure. (c) Amendments Related to Section 1895 of the Reform Act.— (1)(A) Section 106(b)(2) (relating to exception to certain plans) is amended by striking the last sentence thereof. (B) Section 601(b) of ERISA is amended by striking the last sentence thereof. (C) The amendments made by this paragraph shall apply to years beginning after December 31, 1986. (2)(A) Section 607(2) of ERISA is amended by striking “the individual’s employment or previous employment with an employer” and inserting “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) of the Internal Revenue Code of 1986)”. (B) Section 4980B(f)(7), as added by the Technical and Miscellaneous Revenue Act of 1988, is amended by striking “the individual’s employment or previous employment with an employer” and inserting “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))”. (C) The amendments made by this paragraph shall apply to plan years beginning after December 31, 1989. (3)(A) Clause (iv) of section 162(k)(2)(B) is amended— (i) by striking “eligibility” in the heading and inserting “entitlement”, and (ii) by inserting “which does not contain any exclusion or limitation with respect to any preexisting condition of such beneficiary” after “or otherwise)” in subclause (I). (B) Section 602(2)(D) of ERISA is amended— (i) by striking “eligibility” in the heading and inserting “entitlement”, and (ii) by inserting “which does not contain any exclusion or limitation with respect to any preexisting condition of such beneficiary” after “or otherwise)” in clause (i). (C) Clause (iv) of section 4980B(f)(2)(B), as added by the Technical and Miscellaneous Revenue Act of 1988, is amended— (i) by striking “eligibility” in the heading and inserting “entitlement”, and (ii) by inserting “which does not contain any exclusion or limitation with respect to any preexisting condition of such beneficiary” after “or otherwise)” in subclause (I). (D) The amendments made by this paragraph shall apply to— (i) qualifying events occurring after December 31, 1989, and 103 STAT. 2433 (ii) in the case of qualified beneficiaries who elected continuation coverage after December 31, 1988, the period for which the required premium was paid (or was attempted to be paid but was rejected as such). (4)(A) The last sentence of section 602(3) of ERISA is amended to read as follows: “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.” (B) The last sentence of section 4980B(f)(2)(C) of the 1986 Code (as added by the Technical and Miscellaneous Revenue Act of 1988) is amended to read as follows: “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.” (C) The amendments made by this paragraph shall apply to plan years beginning after December 31, 1989. (5)(A) Clause (i) of section 4980B(f)(2)(B) is amended by adding at the end thereof the following new subclause: “(V) Qualifying event involving medicare entitlement.—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.” (B) Section 602(2)(A) of ERISA is amended by adding at the end thereof the following new clause: “(v) Qualifying event involving medicare entitlement.—In the case of an event described in section 603(4) (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.” (C) The amendments made by this paragraph shall apply to plan years beginning after December 31, 1989. (6)(A) Section 3011(b)(6) of the Technical and Miscellaneous Revenue Act of 1988 (Public Law 100–647) is repealed. (B) Subparagraph (A) shall be effective as if included in the enactment of section 3011(b) of the Technical and Miscellaneous Revenue Act of 1988. (d) Amendments Related to Section 1898 of the Reform Act.— (1)(A) Clause (ii) of section 417(a)(3)(B) (defining applicable period) is amended by striking subclause (V) and inserting at the end thereof the following new flush sentence: “In the case of a participant who separates from service before attaining age 35, the applicable period shall be a reasonable period after separation.”. 103 STAT. 2434 (B) Clause (ii) of section 205(c)(3)(B) of ERISA is amended by striking subclause (V) and inserting at the end thereof the following new flush sentence: “In the case of a participant who separates from service before attaining age 35, the applicable period shall be a reasonable period after separation.”. (2) Section 1898(b)(8) of the Reform Act is amended by adding at the end thereof the following new subparagraph: “(C) Effective date.—The amendments made by this paragraph shall apply to distributions after the date of the enactment of this Act.”. (3) Section 205(h) of ERISA is amended— (A) in paragraph (1), by striking “the term” and inserting “The term”, and by striking “benefit,” and inserting “benefit.”; and (B) in paragraph (3), by striking “the term” and inserting “The term”. (4) Subparagraph (B) of section 1898(d)(1) of the Reform Act is amended by striking “Paragraph (1)” and inserting “Subsection (e)(i)”. (5) Section 203(e)(1) of ERISA (as amended by section 1898(d)(1) of the Tax Reform Act of 1986) is further amended to read as follows: “(e)(1) If the present value of any nonforfeitable benefit with respect to a participant in a plan exceeds $3,500, the plan shall provide that such benefit may not be immediately distributed without the consent of the participant.”. (6) Subclause (IV) of section 205(c)(3)(B)(ii) of ERISA is amended by striking “401(a)(11)” and inserting “205”. (7) Subparagraph (B) of section 1898(b)(7) of the Reform Act is amended by striking “Subparagraph (C) of section 205(b)(1)” and inserting “Clause (i) of section 205(b)(1)(C)”. (8) Section 205(e)(2) of ERISA is amended by striking “nonforfeitable accrued benefit” and inserting “nonforfeitable right (within the meaning of section 203)”. (9)(A) Subparagraph (B) of section 1898(b)(14) of the Reform Act is amended by inserting “(as amended by section 1145(b))” after “1974”. (B) Paragraph (3) of section 205(b) of ERISA (as added by section 1898(b)(14)(B) of the Reform Act) is redesignated as paragraph (4). (10) Section 203(e)(1) of ERISA is amended by striking “vested accrued benefit” and inserting “nonforfeitable benefit” .