Page:United States Statutes at Large Volume 100 Part 1.djvu/261

 PUBLIC LAW 99-272—APR. 7, 1986

100 STAT. 225

"(C) The divorce or legal separation of the covered employee from the employee's spouse. "(D) The covered employee becoming entitled to benefits under title XVIII of the Social Security Act. 42 USC 1395. "(E) A dependent child ceasing to be a dependent child under the generally applicable requirements of the plan. "(4) APPLICABLE PREMIUM.—For purposes of this subsection— "(A) 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 regard to whether such cost is paid by the employer or employee). "(B) SPECIAL RULE FOR SELF-INSURED PLANS.—To

the

extent that a plan is a self-insured plan— "(i) IN GENERAL.—Except as provided in clause (ii), the applicable premium for any period of continuation coverage of qualified beneficiaries shall be equal to a reasonable estimate of the cost of providing coverage for such period for similarly situated beneficiaries which— "(I) is determined on an actuarial basis, and "(II) takes into account such factors as the Secretary may prescribe in regulations. "(ii) DETERMINATION ON BASIS OF PAST COST.—If a plan administrator elects to have this clause apply, the applicable premium for any period of continuation coverage of qualified beneficiaries shall be equal to— "(I) the cost to the plan for similarly situated beneficiaries for the same period occurring during the preceding determination period under subparagraph (C), adjusted by "(II) the percentage increase or decrease in the implicit price deflator of the gross national product (calculated by the Department of Commerce and published in the Survey of Current Business) for the 12-month period ending on the last day of the sixth month of such preceding determination period. "(iii) CLAUSE (ii) NOT TO APPLY WHERE SIGNIFICANT

CHANGE.—A plan administrator may not elect to have clause (ii) apply in any case in which there is any significant difference, between the determination period and the preceding determination period, in coverage under, or in employees covered by, the plan. The determination under the preceding sentence for any determination period shall be made at the same time as the determination under subparagraph (C). "(C) DETERMINATION PERIOD.—The determination of any

applicable premium shall be made for a period of 12 months and shall be made before the beginning of such period. "(5) ELECTION.—For purposes of this subsection— "(A) ELECTION PERIOD.—The term 'election period' means the period which—

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