29 U.S.C. § 1162 — Continuation coverage

Page 558 TITLE 29—LABOR § 1162 1 See References in Text note below. thereof agreed to after the date of the enactment of this Act), or ‘‘(B) January 1, 1987. For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement re- lating to the plan which amends the plan solely to con- form to any requirement added by this section shall not be treated as a termination of such collective bar- gaining agreement.’’ § 1162. Continuation coverage For purposes of section 1161 of this title, the term ‘‘continuation coverage’’ means coverage under the plan which meets the following re- quirements: (1) Type of benefit coverage The coverage must consist of coverage which, as of the time the coverage is being provided, is identical to the coverage provided under the plan to similarly situated bene- ficiaries under the plan with respect to whom a qualifying event has not occurred. If cov- erage is modified under the plan for any group of similarly situated beneficiaries, such cov- erage shall also be modified in the same man- ner for all individuals who are qualified bene- ficiaries under the plan pursuant to this part in connection with such group. (2) Period of coverage The coverage must extend for at least the period beginning on the date of the qualifying event and ending not earlier than the earliest of the following: (A) Maximum required period (i) General rule for terminations and re- duced hours In the case of a qualifying event de- scribed in section 1163(2) of this title, ex- cept as provided in clause (ii), the date which is 18 months after the date of the qualifying event. (ii) Special rule for multiple qualifying events If a qualifying event (other than a quali- fying event described in section 1163(6) of this title) occurs during the 18 months after the date of a qualifying event de- scribed in section 1163(2) of this title, the date which is 36 months after the date of the qualifying event described in section 1163(2) of this title. (iii) Special rule for certain bankruptcy proceedings In the case of a qualifying event de- scribed in section 1163(6) of this title (re- lating to bankruptcy proceedings), the date of the death of the covered employee or qualified beneficiary (described in sec- tion 1167(3)(C)(iii) of this title), or in the case of the surviving spouse or dependent children of the covered employee, 36 months after the date of the death of the covered employee. (iv) General rule for other qualifying events In the case of a qualifying event not de- scribed in section 1163(2) or 1163(6) of this title, the date which is 36 months after the date of the qualifying event. (v) Special rule for PBGC recipients In the case of a qualifying event de- scribed in section 1163(2) of this title with respect to a covered employee who (as of such qualifying event) has a nonforfeitable right to a benefit any portion of which is to be paid by the Pension Benefit Guar- anty Corporation under subchapter III, notwithstanding clause (i) or (ii), the date of the death of the covered employee, or in the case of the surviving spouse or depend- ent children of the covered employee, 24 months after the date of the death of the covered employee. The preceding sentence shall not require any period of coverage to extend beyond January 1, 2014. (vi) Special rule for TAA-eligible individ- uals In the case of a qualifying event de- scribed in section 1163(2) of this title with respect to a covered employee who is (as of the date that the period of coverage would, but for this clause or clause (vii), other- wise terminate under clause (i) or (ii)) a TAA-eligible individual (as defined in sec- tion 1165(b)(4)(B) of this title), the period of coverage shall not terminate by reason of clause (i) or (ii), as the case may be, be- fore the later of the date specified in such clause or the date on which such indi- vidual ceases to be such a TAA-eligible in- dividual. The preceding sentence shall not require any period of coverage to extend beyond January 1, 2014. (vii) Medicare entitlement followed by qualifying event In the case of a qualifying event de- scribed in section 1163(2) of this title that occurs less than 18 months after the date the covered employee became entitled to benefits under title XVIII of the Social Se- curity Act [42 U.S.C. 1395 et seq.], the pe- riod of coverage for qualified beneficiaries other than the covered employee shall not terminate under this subparagraph before the close of the 36-month period beginning on the date the covered employee became so entitled. (viii) Special rule for disability In the case of a qualified beneficiary who is determined, under title II or XVI of the Social Security Act [42 U.S.C. 401 et seq., 1381 et seq.], to have been disabled at any time during the first 60 days of continu- ation coverage under this part, any ref- erence in clause (i) or (ii) to 18 months is deemed a reference to 29 months (with re- spect to all qualified beneficiaries), but only if the qualified beneficiary has pro- vided notice of such determination under section 1166(3) 1 of this title before the end of such 18 months. Page 559 TITLE 29—LABOR § 1162 2 See References in Text note below. (B) End of plan The date on which the employer ceases to provide any group health plan to any em- ployee. (C) Failure to pay premium The date on which coverage ceases under the plan by reason of a failure to make time- ly payment of any premium required under the plan with respect to the qualified bene- ficiary. The payment of any premium (other than any payment referred to in the last sentence of paragraph (3)) shall be consid- ered to be timely if made within 30 days after the date due or within such longer pe- riod as applies to or under the plan. (D) Group health plan coverage or medicare entitlement The date on which the qualified bene- ficiary first becomes, after the date of the election— (i) covered under any other group health plan (as an employee or otherwise) which does not contain any exclusion or limita- tion with respect to any preexisting condi- tion of such beneficiary (other than such an exclusion or limitation which does not apply to (or is satisfied by) such bene- ficiary by reason of chapter 100 of title 26, part 7 of this subtitle, or title XXVII of the Public Health Service Act [42 U.S.C. 300gg et seq.]), or (ii) in the case of a qualified beneficiary other than a qualified beneficiary de- scribed in section 1167(3)(C) of this title, entitled to benefits under title XVIII of the Social Security Act [42 U.S.C. 1395 et seq.]. (E) Termination of extended coverage for disability In the case of a qualified beneficiary who is disabled at any time during the first 60 days of continuation coverage under this part, the month that begins more than 30 days after the date of the final determina- tion under title II or XVI of the Social Secu- rity Act [42 U.S.C. 401 et seq., 1381 et seq.] that the qualified beneficiary is no longer disabled. (3) Premium requirements The plan may require payment of a premium for any period of continuation coverage, ex- cept that such premium— (A) shall not exceed 102 percent of the ap- plicable premium for such period, and (B) may, at the election of the payor, be made in monthly installments. 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 bene- ficiary made the initial election for continu- ation coverage. In the case of an individual de- scribed in the last sentence of paragraph (2)(A),2 any reference in subparagraph (A) of this paragraph to ‘‘102 percent’’ is deemed a reference to ‘‘150 percent’’ for any month after the 18th month of continuation coverage de- scribed in clause (i) or (ii) of paragraph (2)(A). (4) No requirement of insurability The coverage may not be conditioned upon, or discriminate on the basis of lack of, evi- dence of insurability. (5) Conversion option In the case of a qualified beneficiary whose period of continuation coverage expires under paragraph (2)(A), the plan must, during the 180-day period ending on such expiration date, provide to the qualified beneficiary the option of enrollment under a conversion health plan otherwise generally available under the plan. (Pub. L. 93–406, title I, § 602, as added Pub. L. 99–272, title X, § 10002(a), Apr. 7, 1986, 100 Stat. 228; amended Pub. L. 99–509, title IX, § 9501(b)(1)(B), (2)(B), Oct. 21, 1986, 100 Stat. 2076, 2077; Pub. L. 99–514, title XVIII, § 1895(d)(1)(B), (2)(B), (3)(B), (4)(B), Oct. 22, 1986, 100 Stat. 2936–2938; Pub. L. 101–239, title VI, § 6703(a), (b), title VII, §§ 7862(c)(3)(B), (4)(A), (5)(B), 7871(c), Dec. 19, 1989, 103 Stat. 2296, 2432, 2433, 2435; Pub. L. 104–188, title I, § 1704(g)(1)(B), Aug. 20, 1996, 110 Stat. 1880; Pub. L. 104–191, title IV, § 421(b)(1), Aug. 21, 1996, 110 Stat. 2088; Pub. L. 111–5, div. B, title I, § 1899F(a), Feb. 17, 2009, 123 Stat. 428; Pub. L. 111–344, title I, § 116(a), Dec. 29, 2010, 124 Stat. 3615; Pub. L. 112–40, title II, § 243(a)(1), (2), Oct. 21, 2011, 125 Stat. 420.) Editorial Notes REFERENCES IN TEXT The Social Security Act, referred to in par. (2)(A)(vii), (viii), (D)(ii), (E), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Titles II, XVI, and XVIII of the Social Se- curity Act are classified generally to subchapters II (§ 401 et seq.), XVI (§ 1381 et seq.), and XVIII (§ 1395 et seq.), respectively, of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables. Section 1166(3) of this title, referred to in par. (2)(A)(viii), was redesignated as section 1166(a)(3) of this title by Pub. L. 101–239, title VII, § 7891(d)(1)(A)(ii)(I), Dec. 19, 1989, 103 Stat. 2445. The Public Health Service Act, referred to in par. (2)(D)(i), is act July 1, 1944, ch. 373, 58 Stat. 682. Title XXVII of the Act is classified generally to subchapter XXV (§ 300gg et seq.) of chapter 6A of Title 42, The Pub- lic Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 201 of Title 42 and Tables. The last sentence of paragraph (2)(A), referred to in par. (3), probably means par. (2)(A)(viii) of this section, which was originally enacted as the concluding provi- sions of par. (2)(A) and subsequently designated as cl. (vi) and redesignated as cl. (viii) of par. (2)(A) by Pub. L. 111–5, div. B, title I, § 1899F(a)(2), (3), Feb. 17, 2009, 123 Stat. 428. AMENDMENTS 2011—Par. (2)(A)(v), (vi). Pub. L. 112–40 substituted ‘‘January 1, 2014’’ for ‘‘February 12, 2011’’. 2010—Par. (2)(A)(v), (vi). Pub. L. 111–344 substituted ‘‘February 12, 2011’’ for ‘‘December 31, 2010’’. 2009—Par. (2)(A)(v). Pub. L. 111–5, § 1899F(a)(3), added cl. (v). Former cl. (v) redesignated (vii). Pub. L. 111–5, § 1899F(a)(1), transferred cl. (v) to ap- pear after cl. (iv). See 1989 Amendment note below. Par. (2)(A)(vi). Pub. L. 111–5, § 1899F(a)(3), added cl. (vi). Former cl. (vi) redesignated (viii). Pub. L. 111–5, § 1899F(a)(2), designated concluding pro- visions as cl. (vi) and inserted heading. Page 560 TITLE 29—LABOR § 1162 Par. (2)(A)(vii), (viii). Pub. L. 111–5, § 1899F(a)(3), re- designated cls. (v) and (vi) as (vii) and (viii), respec- tively. 1996—Par. (2)(A). Pub. L. 104–191, § 421(b)(1)(A), in clos- ing provisions, substituted ‘‘In the case of a qualified beneficiary’’ for ‘‘In the case of an individual’’ and ‘‘at any time during the first 60 days of continuation cov- erage under this part’’ for ‘‘at the time of a qualifying event described in section 1163(2) of this title’’, struck out ‘‘with respect to such event’’ after ‘‘(ii) to 18 months’’, and inserted ‘‘(with respect to all qualified beneficiaries)’’ after ‘‘29 months’’. Par. (2)(A)(v). Pub. L. 104–188 amended cl. (v) gen- erally. Prior to amendment, cl. (v) read as follows: ‘‘(v) QUALIFYING EVENT INVOLVING MEDICARE ENTITLE- MENT.—In the case of an event described in section 1163(4) of this title (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 Se- curity Act.’’ Par. (2)(D)(i). Pub. L. 104–191, § 421(b)(1)(B), inserted ‘‘(other than such an exclusion or limitation which does not apply to (or is satisfied by) such beneficiary by reason of chapter 100 of title 26, part 7 of this subtitle, or title XXVII of the Public Health Service Act [42 U.S.C. 300gg et seq.])’’ before ‘‘, or’’ at end. Par. (2)(E). Pub. L. 104–191, § 421(b)(1)(C), substituted ‘‘at any time during the first 60 days of continuation coverage under this part’’ for ‘‘at the time of a quali- fying event described in section 1163(2) of this title’’. 1989—Par. (2)(A). Pub. L. 101–239, § 6703(a)(1), inserted after and below cl. (iv) ‘‘In the case of an individual who is determined, under title II or XVI of the Social Security Act, to have been disabled at the time of a qualifying event described in section 1163(2) of this title, any reference in clause (i) or (ii) to 18 months with respect to such event is deemed a reference to 29 months, but only if the qualified beneficiary has pro- vided notice of such determination under section 1166(3) of this title before the end of such 18 months.’’ Par. (2)(A)(iii). Pub. L. 101–239, § 7871(c), substituted ‘‘described in section 1163(6)’’ for ‘‘described in 1163(6)’’. Par. (2)(A)(v). Pub. L. 101–239, § 7862(c)(5)(B), added cl. (v) after concluding provisions inserted by Pub. L. 101–239, § 6703(a)(1). See above. Par. (2)(D). Pub. L. 101–239, § 7862(c)(3)(B), substituted ‘‘entitlement’’ for ‘‘eligibility’’ in heading and inserted ‘‘which does not contain any exclusion or limitation with respect to any preexisting condition of such bene- ficiary’’ after ‘‘or otherwise)’’ in cl. (i). Par. (2)(E). Pub. L. 101–239, § 6703(a)(2), added subpar. (E). Par. (3). Pub. L. 101–239, § 7862(c)(4)(A), which directed substitution of ‘‘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.’’ for last sentence of par. (3), was executed by making the substitution for the following sentence: ‘‘If an elec- tion is made after the qualifying event, the plan shall permit payment for continuation coverage during the period preceding the election to be made within 45 days of the date of the election.’’, notwithstanding the sen- tence added at the end of par. (3) by Pub. L. 101–239, § 6703(b). Pub. L. 101–239, § 6703(b), inserted at end ‘‘In the case of an individual described in the last sentence of para- graph (2)(A), any reference in subparagraph (A) of this paragraph to ‘102 percent’ is deemed a reference to ‘150 percent’ for any month after the 18th month of con- tinuation coverage described in clause (i) or (ii) of para- graph (2)(A).’’ 1986—Par. (1). Pub. L. 99–514, § 1895(d)(1)(B), inserted ‘‘If coverage is modified under the plan for any group of similarly situated beneficiaries, such coverage shall also be modified in the same manner for all individuals who are qualified beneficiaries under the plan pursuant to this part in connection with such group.’’ Par. (2)(A). Pub. L. 99–514, § 1895(d)(2)(B), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: ‘‘(A) MAXIMUM PERIOD.—In the case of— ‘‘(i) a qualifying event described in section 1163(2) of this title (relating to terminations and reduced hours), the date which is 18 months after the date of the qualifying event, and ‘‘(ii) any qualifying event not described in clause (i), the date which is 36 months after the date of the qualifying event.’’ Par. (2)(A)(ii). Pub. L. 99–509, § 9501(b)(1)(B)(i), in- serted ‘‘(other than a qualifying event described in sec- tion 1163(6) of this title)’’. Par. (2)(A)(iii). Pub. L. 99–509, § 9501(b)(1)(B)(iv), added cl. (iii). Former cl. (iii) redesignated (iv). Par. (2)(A)(iv). Pub. L. 99–509, § 9501(b)(1)(B)(ii), (iii), redesignated cl. (iii) as (iv) and inserted ‘‘or 1163(6)’’. Par. (2)(C). Pub. L. 99–514, § 1895(d)(3)(B), inserted ‘‘The payment of any premium (other than any pay- ment referred to in the last sentence of paragraph (3)) shall be considered to be timely if made within 30 days after the date due or within such longer period as ap- plies to or under the plan.’’ Par. (2)(D). Pub. L. 99–514, § 1895(d)(4)(B)(ii), (iii), sub- stituted ‘‘Group health plan coverage or medicare eligi- bility’’ for ‘‘Reemployment or medicare eligibility’’ as heading and substituted ‘‘covered under any other group health plan (as an employee or otherwise)’’ for ‘‘a covered employee under any other group health plan’’ in cl. (i). Par. (2)(D)(ii). Pub. L. 99–509, § 9501(b)(2)(B), inserted ‘‘in the case of a qualified beneficiary other than a qualified beneficiary described in section 1167(3)(C) of this title’’ before ‘‘entitled’’. Par. (2)(E). Pub. L. 99–514, § 1895(d)(4)(B)(i), struck out subpar. (E), remarriage of spouse, which read as fol- lows: ‘‘In the case of an individual who is a qualified beneficiary by reason of being the spouse of a covered employee, the date on which the beneficiary remarries and becomes covered under a group health plan.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2011 AMENDMENT Amendment by Pub. L. 112–40 applicable to periods of coverage which would (without regard to the amend- ments made by section 243 of Pub. L. 112–40) end on or after the date which is 30 days after Oct. 21, 2011, see section 243(b) of Pub. L. 112–40, set out as a note under section 4980B of Title 26, Internal Revenue Code. EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–344 applicable to periods of coverage which would (without regard to such amendment) end on or after Dec. 31, 2010, see section 116(d) of Pub. L. 111–344, set out as a note under section 4980B of Title 26, Internal Revenue Code. EFFECTIVE DATE OF 2009 AMENDMENT Except as otherwise provided and subject to certain applicability provisions, amendment by Pub. L. 111–5 effective upon the expiration of the 90-day period begin- ning on Feb. 17, 2009, see section 1891 of Pub. L. 111–5, set out as an Effective and Termination Dates of 2009 Amendment note under section 2271 of Title 19, Cus- toms Duties. Amendment by Pub. L. 111–5 applicable to periods of coverage which would (without regard to amendment by Pub. L. 111–5) end on or after Feb. 17, 2009, see sec- tion 1899F(d) of Pub. L. 111–5, set out as a note under section 4980B of Title 26, Internal Revenue Code. EFFECTIVE DATE OF 1996 AMENDMENTS Amendment by Pub. L. 104–191 effective Jan. 1, 1997, regardless of whether qualifying event occurred before, on, or after such date, see section 421(d) of Pub. L. Page 561 TITLE 29—LABOR § 1164 104–191 set out as a note under section 4980B of Title 26, Internal Revenue Code. Amendment by Pub. L. 104–188 applicable to plan years beginning after Dec. 31, 1989, see section 1704(g)(2) of Pub. L. 104–188, set out as a note under section 4980B of Title 26. EFFECTIVE DATE OF 1989 AMENDMENT Pub. L. 101–239, title VI, § 6703(d), Dec. 19, 1989, 103 Stat. 2296, provided that: ‘‘The amendments made by this section [amending this section and section 1166 of this title] shall apply to plan years beginning on or after the date of the enactment of this Act [Dec. 19, 1989], regardless of whether the qualifying event oc- curred before, on, or after such date.’’ Amendment by section 7862(c)(3)(B) of Pub. L. 101–239 applicable to (i) qualifying events occurring after Dec. 31, 1989, and (ii) in the case of qualified beneficiaries who elected continuation coverage after Dec. 31, 1988, the period for which the required premium was paid (or was attempted to be paid but was rejected as such), see section 7862(c)(3)(D) of Pub. L. 101–239, set out as a note under section 162 of Title 26, Internal Revenue Code. Amendment by section 7862(c)(4)(A) of Pub. L. 101–239 applicable to plan years beginning after Dec. 31, 1989, see section 7862(c)(4)(C) of Pub. L. 101–239, set out as a note under section 4980B of Title 26. Amendment by section 7862(c)(5)(B) of Pub. L. 101–239 applicable to plan years beginning after Dec. 31, 1989, see section 7862(c)(5)(C) of Pub. L. 101–239, set out as a note under section 4980B of Title 26. EFFECTIVE DATE OF 1986 AMENDMENTS Amendment by Pub. L. 99–514 effective, except as oth- erwise provided, as if included in enactment of the Con- solidated Omnibus Budget Reconciliation Act of 1985, Pub. L. 99–272, see section 1895(e) of Pub. L. 99–514, set out as a note under section 162 of Title 26, Internal Rev- enue Code. Amendment by Pub. L. 99–509 effective, except as oth- erwise provided, as if included in title X of the Consoli- dated Omnibus Budget Reconciliation Act of 1985, Pub. L. 99–272, see section 9501(e) of Pub. L. 99–509, set out as a note under section 162 of Title 26. PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, set out as a note under section 401 of Title 26, Internal Revenue Code. § 1163. Qualifying event For purposes of this part, the term ‘‘qualifying event’’ means, with respect to any covered em- ployee, any of the following events which, but for the continuation coverage required under this part, would result in the loss of coverage of a qualified beneficiary: (1) The death of the covered employee. (2) The termination (other than by reason of such employee’s gross misconduct), or reduc- tion of hours, of the covered employee’s em- ployment. (3) The divorce or legal separation of the covered employee from the employee’s spouse. (4) The covered employee becoming entitled to benefits under title XVIII of the Social Se- curity Act [42 U.S.C. 1395 et seq.]. (5) A dependent child ceasing to be a depend- ent child under the generally applicable re- quirements of the plan. (6) A proceeding in a case under title 11, commencing on or after July 1, 1986, with re- spect to the employer from whose employment the covered employee retired at any time. In the case of an event described in paragraph (6), a loss of coverage includes a substantial elimination of coverage with respect to a quali- fied beneficiary described in section 1167(3)(C) of this title within one year before or after the date of commencement of the proceeding. (Pub. L. 93–406, title I, § 603, as added Pub. L. 99–272, title X, § 10002(a), Apr. 7, 1986, 100 Stat. 229; amended Pub. L. 99–509, title IX, § 9501(a)(2), Oct. 21, 1986, 100 Stat. 2076.) Editorial Notes REFERENCES IN TEXT The Social Security Act, referred to in par. (4), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Title XVIII of the So- cial Security Act is classified generally to subchapter XVIII (§ 1395 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables. AMENDMENTS 1986—Pub. L. 99–509 added par. (6) and last sentence. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–509 effective, except as oth- erwise provided, as if included in title X of the Consoli- dated Omnibus Budget Reconciliation Act of 1985, Pub. L. 99–272, see section 9501(e) of Pub. L. 99–509, set out as a note under section 162 of Title 26, Internal Revenue Code. § 1164. Applicable premium For purposes of this part— (1) In general The term ‘‘applicable premium’’ means, with respect to any period of continuation coverage of qualified beneficiaries, the cost to the plan for such period of the coverage for similarly situated beneficiaries with respect to whom a qualifying event has not occurred (without re- gard to whether such cost is paid by the em- ployer or employee). (2) Special rule for self-insured plans To the extent that a plan is a self-insured plan— (A) In general Except as provided in subparagraph (B), the applicable premium for any period of continuation coverage of qualified bene- ficiaries shall be equal to a reasonable esti- mate of the cost of providing coverage for such period for similarly situated bene- ficiaries which— (i) is determined on an actuarial basis, and (ii) takes into account such factors as the Secretary may prescribe in regula- tions. (B) Determination on basis of past cost If an administrator elects to have this sub- paragraph apply, the applicable premium for any period of continuation coverage of quali- fied beneficiaries shall be equal to—