Page:United States Statutes at Large Volume 100 Part 1.djvu/265

 PUBLIC LAW 99-272—APR. 7, 1986

100 STAT. 229

"(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. "SEC. 603. QUALIFYING EVENT.

29 USC 1163.

"For purposes of this part, the term 'qualifying event' means, with respect to any covered employee, 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 reduction of hours, of the covered employee's employment. "(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 Security Act. 42 USC 1395. "(5) A dependent child ceasing to be a dependent child under the generally applicable requirements of the plan. "SEC. 604. APPLICABLE PREMIUM.

29 USC 1164.

"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 regard to whether such cost is paid by the employer 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 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. "(B)

DETERMINATION ON BASIS OF PAST COST.—If

an

administrator elects to have this subparagraph 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 paragraph (3), 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. "(C) SUBPARAGRAPH (B) NOT TO APPLY WHERE SIGNIFICANT

CHANGE.—An administrator may not elect to have subpara-

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