CONTINUED HEALTH BENEFITS.

SEC. 4438. CONTINUED HEALTH BENEFITS. (a) In General.—Section 8905a(d) of title 5, United States Code, is amended— (1) in paragraph (1)(A) by striking “An individual” and inserting “Except as provided in paragraph (4), an individual”; (2) in paragraph (2) by striking “, accordance with paragraph (1))” and inserting “in accordance with paragraph (1) or (4), as the case may be)”; and (3) by adding at the end the following; “(4) (A) If the basis for continued coverage under this section is an involuntary separation from a position in or under the Department of Defense due to a reduction in force— “(i) the individual shall be liable for not more than the employee contributions referred to in paragraph (I)(A)(i); and “(ii) the agency which last employed the individual shall pay the remaining portion of the amount required under paragraph (1)(A). “(B) This paragraph shall apply with respect to any individual whose continued coverage is based on a separation occurring on or after the date of enactment of this paragraph and before— “(i) October 1, 1997; or “(ii) February 1, 1998, if specific notice of such separation was given to such individual before October 1, 1997”. (b) Source of Payments.— (1) Any amount which becomes payable by an agency as a result of the enactment of subsection (a) shall be paid out of funds or appropriations available for salaries and expenses of such agency. (2) Of the amounts authorized to be appropriated pursuant to section 301, $2,000,000 shall be available for agency payments under section 8905a(d)(4)(A)(ii) of title 5, United States Code, as added by subsection (a).