Page:United States Statutes at Large Volume 98 Part 1.djvu/823

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 775

the date of the enactment of this Act in taxable years ending after such date. (2) TRANSITIONAL RULES FOR CONTRACTS ISSUED BEFORE EFFECTIVE DATE.—In the case of any contract (other than a single

premium contract) which is issued on or before the day which is 6 months after the date of the enactment of this Act, for purposes of section 72(q)(l)(A) of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of this/Act), any investment in such contract which is made during any calendar year shall be treated as having been made on January 1 of such calendar year. SEC. 223. GROUP-TERM LIFE INSURANCE PURCHASED FOR EMPLOYEES. (a) SECTION 79 EXTENDED TO FORMER EMPLOYEES.—

26 USC 79.

(1) Section 79 (relating to group-term insurance purchased for employees) is amended by adding at the end thereof the following new subsection: "(e) EMPLOYEE INCLUDES FORMER EMPLOYEE.—For purposes of this section, the term 'employee' includes a former employee.' (2) Paragraph (1) of section 79(b) is amended to read as follows: "(1) the cost of group-term life insurance on the life of an individual which is provided under a policy carried directly or indirectly by an employer after such individual has terminated his employment with such employer and is disabled (within the meaning of section 72(m)(7)),". (b) AMOUNT OF INCLUSION IN CASE OF DISCRIMINATORY PLANS.—

Paragraph (1) of section 79(d) (relating to nondiscrimination requirements) is amended to read as follows: "(1) IN GENERAL.—In the case of a discriminatory group-term life insurance plan— "(A) subsection (a)(1) shall not apply with respect to any kev employee, and '(B) the cost of group-term life insurance on the life of any key employee shall be determined without regard to subsection (c)."

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(c) CLARIFICATION OF COORDINATION WITH SECTION 83.—Subsection

(e) of section 83 (relating to application of section) is amended by 26 USC 83. striking out "or" at the end of paragraph (3), by striking out the period at the end of paragraph (4) and inserting in lieu thereof ', or", and by adding at the end thereof the following new paragraph: ! "(5) the cost of group-term life insurance to which section 79 applies.". (d) EFFECTIVE DATE.— 26 USC 79 note. (1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 1983. (2) INCLUSION OF FORMER EMPLOYEES IN THE CASE OF EXISTING GROUP-TERM INSURANCE PLANS.—

(A) IN GENERAL.—The amendments made by subsection (a) shall not apply— (i) to any group-term life insurance plan of the employer in existence on January 1, 1984, or (ii) to any group-term life insurance plan of the employer (or a successor employer) which is a comparable successor to a plan described in clause (i),

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