AUTHORITY TO CONTINUE COVERAGE.

SEC. 201. AUTHORITY TO CONTINUE COVERAGE. (a) Authority.— (1) In general.— Chapter 89 of title 5, United States Code, is amended by inserting after section 8905 the following: “§ 8905a. Continued coverage “(a) Any individual described in paragraph (1) or (2) of subsection (b) may elect to continue coverage under this chapter in accordance with the provisions of this section. “(b) This section applies with respect to— “(1) any employee who— “(A) is separated from service, whether voluntarily or involuntarily, except that if the separation is involuntary, this section shall not apply if the separation is for gross misconduct (as defined under regulations which the Office of Personnel Management shall prescribe); and “(B) would not otherwise be eligible for any benefits under this chapter (determined without regard to any temporary extension of coverage and without regard to any benefits available under a nongroup contract); and “(2) any individual who— “(A) ceases to meet the requirements for being considered an unmarried dependent child under this chapter; 102 STAT. 3842 “(B) on the day before so ceasing to meet the requirements referred to in subparagraph (A), was covered under a health benefits plan under this chapter as a member of the family of an employee or annuitant; and “(C) would not otherwise be eligible for any benefits under this chapter (determined without regard to any temporary extension of coverage and without regard to any benefits available under a nongroup contract). “(c) (1) The Office shall prescribe regulations and provide for the inclusion of appropriate terms in contracts with carriers to provide that— “(A) with respect to an employee who becomes (or will become) eligible for continued coverage under this section as a result of separation from service, the separating agency shall, before the end of the 30-day period beginning on the date as of which coverage (including any temporary extensions of coverage) would otherwise end, notify the individual of such individual’s rights under this section; and “(B) with respect to a child of an employee or annuitant who becomes eligible for continued coverage under this section as a result of ceasing to meet the requirements for being considered a member of the employee’s or annuitant’s family— “(i) the employee or annuitant may provide written notice of the child’s change in status (complete with the child’s name, address, and such other information as the Office may by regulation require)— “(I) to the employee’s employing agency; or “(II) in the case of an annuitant, to the Office; and “(ii) if the notice referred to in clause (i) is received within 60 days after the date as of which the child involved first ceases to meet the requirements involved, the employing agency or the Office (as the case may be) must, within 14 days after receiving such notice, notify the child of such child’s rights under this section. “(2) In order to obtain continued coverage under this section, an appropriate written election (submitted in such manner as the Office by regulation prescribes) must be made— “(A) in the case of an individual seeking continued coverage based on a separation from service, before the end of the 60-day period beginning on the later of— “(i) the effective date of the separation; or “(ii) the date the separated individual receives the notice required under paragraph (1)(A); or “(B) in the case of an individual seeking continued coverage based on a change in circumstances making such individual ineligible for coverage as an unmarried dependent child, before the end of the 60-day period beginning on the later of— “(i) the date as of which such individual first ceases to meet the requirements for being considered an unmarried dependent child; or “(ii) the date such individual receives notice under paragraph (1)(B)(u); except that if a parent fails to provide the notice required under paragraph (1)(B)(i) in timely fashion, the 60-day period under this subparagraph shall be based on the date under clause (i), irrespective of whether or not any notice under paragraph (1)(B)(ii) is provided. 102 STAT. 3843 “(d) (1) (A) An individual receiving continued coverage under this section shall be required to pay currently into the Employees Health Benefits Fund, under arrangements satisfactory to the Office, an amount equal to the sum of— “(i) the employee and agency contributions which would be required in the case of an employee enrolled in the same health benefits plan and level of benefits; and “(ii) an amount, determined under regulations prescribed by the Office, necessary for administrative expenses, but not to exceed 2 percent of the total amount under clause (i). “(B) Payments under this section to the Fund shall— “(i) in the case of an individual whose continued coverage is based on such individual’s separation, be made through the agency which last employed such individual; or “(ii) in the case of an individual whose continued coverage is based on a change in circumstances referred to in subsection (c)(2)(B), be made through— “(I) the Office, if, at the time coverage would (but for this section) otherwise have been discontinued, the individual was covered as the child of an annuitant; or “(II) if, at the time referred to in subclause (I), the individual was covered as the child of an employee, the employee’s employing agency as of such time. “(2) If an individual elects to continue coverage under this section before the end of the applicable period under subsection (c)(2), but after such individual’s coverage under this chapter (including any temporary extensions of coverage) expires, coverage shall be restored retroactively, with appropriate contributions (determined in accordance with paragraph (1)) and claims (if any), to the same extent and effect as though no break in coverage had occurred. “(3) (A) An individual making an election under subsection (c)(2)(B) may, at such individual’s option, elect coverage either as an individual or, if appropriate, for self and family. “(B) For the purpose of this paragraph, members of an individual’s family shall be determined in the same way as would apply under this chapter in the case of an enrolled employee. “(C) Nothing in this paragraph shall be considered to limit an individual making an election under subsection (c)(2)(A) to coverage for self alone. “(e) (1) Continued coverage under this section may not extend beyond— “(A) in the case of an individual whose continued coverage is based on separation from service, the date which is 18 months after the effective date of the separation; or “(B) in the case of an individual whose continued coverage is based on ceasing to meet the requirements for being considered an unmarried dependent child, the date which is 36 months after the date on which the individual first ceases to meet those requirements, subject to paragraph (2). “(2) In the case of an individual who— “(A) ceases to meet the requirements for being considered an unmarried dependent child; “(B) as of the day before so ceasing to meet the requirements referred to in subparagraph (A), was covered as the child of a former employee receiving continued coverage under this section based on the former employee’s separation from service; and 102 STAT. 3844 “(C) so ceases to meet the requirements referred to in subparagraph (A) before the end of the 18-month period beginning on the date of the former employee’s separation from service, extended coverage under this section may not extend beyond the date which is 36 months after the separation date referred to in subparagraph (C). “(f) (1) The Office shall prescribe regulations under which, in addition to any individual otherwise eligible for continued coverage under this section, and to the extent practicable, continued coverage may also, upon appropriate written application, be afforded under this section— “(A) to any individual who— “(i) if subparagraphs (A) and (O of paragraph (10) of section 8901 were disregarded, would be eligible to be considered a former spouse within the meaning of such paragraph; but “(ii) would not, but for this subsection, be eligible to be so considered; and “(B) to any individual whose coverage as a family member would otherwise terminate as a result of a legal separation. “(2) The terms and conditions for coverage under the regulations shall include— “(A) consistent with subsection (c), any necessary notification provisions, and provisions under which an election period of at least 60 days’ duration is afforded; “(B) terms and conditions identical to those under subsection (d), except that contributions to the Employees Health Benefits Fund shall be made through such agency as the Office by regulation prescribes; “(C) provisions relating to the termination of continued coverage, except that continued coverage under this section may not (subject to paragraph (3)) extend beyond the date which is 36 months after the date on which the qualifying event under this subsection (the date of divorce, annulment, or legal separation, as the case may be) occurs; and “(D) provisions designed to ensure that any coverage pursuant to this subsection does not adversely affect any eligibility for coverage which the individual involved might otherwise have under this chapter (including as a result of any change in personal circumstances) if this subsection had not been enacted. “(3) In the case of an individual— “(A) who becomes eligible for continued coverage under this subsection based on a divorce, annulment, or legal separation from a person who, as of the day before the date of the divorce, annulment, or legal separation (as the case may be) was receiving continued coverage under this section for self and family based on such person’s separation from service; and “(B) whose divorce, annulment, or legal separation (as the case may be) occurs before the end of the 18-month period beginning on the date of the separation from service referred to in subparagraph (A), extended coverage under this section may not extend beyond the date which is 36 months after the date of the separation from service, as referred to in subparagraph (A).”. 102 STAT. 3845 (2) Table of sections.— The table of sections for chapter 89 of title 5, United States Code, is amended by inserting after the item relating to section 8905 the following: “8905a. Continued coverage.”. (b) Option To Convert to a Nongroup Contract After Continued Coverage Ends.— Section 8902(g) of title 5, United States Code, is amended by striking “or former spouse” each place it appears and inserting “former spouse, or person having continued coverage under section 8905a of this title” (c) Change of Coverage Based on Change in Family Status.— Section 8905(e) of title 5, United States Code, is amended by striking “or former spouse” and inserting “former spouse, or person having continued coverage under section 8905a of this title”. (d) Open Season.— Section 8905(f) of title 5, United States Code, is amended— (1) by striking “or former spouse” each place it appears and inserting “former spouse, or person having continued coverage under section 8905a of this title”; and (2) by adding at the end the following: “(3) (A) In addition to any informational requirements otherwise applicable under this chapter, the regulations shall include provisions to ensure that each employee eligible to enroll in a health benefits plan under this chapter (whether actually enrolled or not) is notified in writing as to the rights afforded under section 8905a of this title. “(B) Notification under this paragraph shall be provided by employing agencies at an appropriate point in time before each period under paragraph (1) so that employees may be aware of their rights under section 8905a of this title when making enrollment decisions during such period.”.