
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC9801]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
               Subtitle K--Group Health Plan Requirements
 
               CHAPTER 100--GROUP HEALTH PLAN REQUIREMENTS
 
    Subchapter A--Requirements Relating to Portability, Access, and 
                              Renewability
 
Sec. 9801. Increased portability through limitation on 
        preexisting condition exclusions
        

(a) Limitation on preexisting condition exclusion period; crediting for 
        periods of previous coverage

    Subject to subsection (d), a group health plan may, with respect to 
a participant or beneficiary, impose a preexisting condition exclusion 
only if--
        (1) such exclusion relates to a condition (whether physical or 
    mental), regardless of the cause of the condition, for which medical 
    advice, diagnosis, care, or treatment was recommended or received 
    within the 6-month period ending on the enrollment date;
        (2) such exclusion extends for a period of not more than 12 
    months (or 18 months in the case of a late enrollee) after the 
    enrollment date; and
        (3) the period of any such preexisting condition exclusion is 
    reduced by the length of the aggregate of the periods of creditable 
    coverage (if any) applicable to the participant or beneficiary as of 
    the enrollment date.

(b) Definitions

    For purposes of this section--

                 (1) Preexisting condition exclusion

        (A) In general

            The term ``preexisting condition exclusion'' means, with 
        respect to coverage, a limitation or exclusion of benefits 
        relating to a condition based on the fact that the condition was 
        present before the date of enrollment for such coverage, whether 
        or not any medical advice, diagnosis, care, or treatment was 
        recommended or received before such date.

        (B) Treatment of genetic information

            For purposes of this section, genetic information shall not 
        be treated as a condition described in subsection (a)(1) in the 
        absence of a diagnosis of the condition related to such 
        information.

                         (2) Enrollment date

        The term ``enrollment date'' means, with respect to an 
    individual covered under a group health plan, the date of enrollment 
    of the individual in the plan or, if earlier, the first day of the 
    waiting period for such enrollment.

                          (3) Late enrollee

        The term ``late enrollee'' means, with respect to coverage under 
    a group health plan, a participant or beneficiary who enrolls under 
    the plan other than during--
            (A) the first period in which the individual is eligible to 
        enroll under the plan, or
            (B) a special enrollment period under subsection (f).

                         (4) Waiting period

        The term ``waiting period'' means, with respect to a group 
    health plan and an individual who is a potential participant or 
    beneficiary in the plan, the period that must pass with respect to 
    the individual before the individual is eligible to be covered for 
    benefits under the terms of the plan.

(c) Rules relating to crediting previous coverage

                   (1) Creditable coverage defined

        For purposes of this part, the term ``creditable coverage'' 
    means, with respect to an individual, coverage of the individual 
    under any of the following:
            (A) A group health plan.
            (B) Health insurance coverage.
            (C) Part A or part B of title XVIII of the Social Security 
        Act.
            (D) Title XIX of the Social Security Act, other than 
        coverage consisting solely of benefits under section 1928.
            (E) Chapter 55 of title 10, United States Code.
            (F) A medical care program of the Indian Health Service or 
        of a tribal organization.
            (G) A State health benefits risk pool.
            (H) A health plan offered under chapter 89 of title 5, 
        United States Code.
            (I) A public health plan (as defined in regulations).
            (J) A health benefit plan under section 5(e) of the Peace 
        Corps Act (22 U.S.C. 2504(e)).

    Such term does not include coverage consisting solely of coverage of 
    excepted benefits (as defined in section 9832(c)).

       (2) Not counting periods before significant breaks in 
                                  coverage

        (A) In general

            A period of creditable coverage shall not be counted, with 
        respect to enrollment of an individual under a group health 
        plan, if, after such period and before the enrollment date, 
        there was a 63-day period during all of which the individual was 
        not covered under any creditable coverage.

        (B) Waiting period not treated as a break in coverage

            For purposes of subparagraph (A) and subsection (d)(4), any 
        period that an individual is in a waiting period for any 
        coverage under a group health plan or is in an affiliation 
        period shall not be taken into account in determining the 
        continuous period under subparagraph (A).

        (C) Affiliation period

            (i) In general

                For purposes of this section, the term ``affiliation 
            period'' means a period which, under the terms of the health 
            insurance coverage offered by the health maintenance 
            organization, must expire before the health insurance 
            coverage becomes effective. During such an affiliation 
            period, the organization is not required to provide health 
            care services or benefits and no premium shall be charged to 
            the participant or beneficiary.
            (ii) Beginning

                Such period shall begin on the enrollment date.
            (iii) Runs concurrently with waiting periods

                Any such affiliation period shall run concurrently with 
            any waiting period under the plan.

                  (3) Method of crediting coverage

        (A) Standard method

            Except as otherwise provided under subparagraph (B), for 
        purposes of applying subsection (a)(3), a group health plan 
        shall count a period of creditable coverage without regard to 
        the specific benefits for which coverage is offered during the 
        period.

        (B) Election of alternative method

            A group health plan may elect to apply subsection (a)(3) 
        based on coverage of any benefits within each of several classes 
        or categories of benefits specified in regulations rather than 
        as provided under subparagraph (A). Such election shall be made 
        on a uniform basis for all participants and beneficiaries. Under 
        such election a group health plan shall count a period of 
        creditable coverage with respect to any class or category of 
        benefits if any level of benefits is covered within such class 
        or category.

        (C) Plan notice

            In the case of an election with respect to a group health 
        plan under subparagraph (B), the plan shall--
                (i) prominently state in any disclosure statements 
            concerning the plan, and state to each enrollee at the time 
            of enrollment under the plan, that the plan has made such 
            election, and
                (ii) include in such statements a description of the 
            effect of this election.

                     (4) Establishment of period

        Periods of creditable coverage with respect to an individual 
    shall be established through presentation of certifications 
    described in subsection (e) or in such other manner as may be 
    specified in regulations.

(d) Exceptions

          (1) Exclusion not applicable to certain newborns

        Subject to paragraph (4), a group health plan may not impose any 
    preexisting condition exclusion in the case of an individual who, as 
    of the last day of the 30-day period beginning with the date of 
    birth, is covered under creditable coverage.

      (2) Exclusion not applicable to certain adopted children

        Subject to paragraph (4), a group health plan may not impose any 
    preexisting condition exclusion in the case of a child who is 
    adopted or placed for adoption before attaining 18 years of age and 
    who, as of the last day of the 30-day period beginning on the date 
    of the adoption or placement for adoption, is covered under 
    creditable coverage. The previous sentence shall not apply to 
    coverage before the date of such adoption or placement for adoption.

              (3) Exclusion not applicable to pregnancy

        For purposes of this section, a group health plan may not impose 
    any preexisting condition exclusion relating to pregnancy as a 
    preexisting condition.

                    (4) Loss if break in coverage

        Paragraphs (1) and (2) shall no longer apply to an individual 
    after the end of the first 63-day period during all of which the 
    individual was not covered under any creditable coverage.

(e) Certifications and disclosure of coverage

     (1) Requirement for certification of period of creditable 
                                  coverage

        (A) In general

            A group health plan shall provide the certification 
        described in subparagraph (B)--
                (i) at the time an individual ceases to be covered under 
            the plan or otherwise becomes covered under a COBRA 
            continuation provision,
                (ii) in the case of an individual becoming covered under 
            such a provision, at the time the individual ceases to be 
            covered under such provision, and
                (iii) on the request on behalf of an individual made not 
            later than 24 months after the date of cessation of the 
            coverage described in clause (i) or (ii), whichever is 
            later.

        The certification under clause (i) may be provided, to the 
        extent practicable, at a time consistent with notices required 
        under any applicable COBRA continuation provision.

        (B) Certification

            The certification described in this subparagraph is a 
        written certification of--
                (i) the period of creditable coverage of the individual 
            under such plan and the coverage under such COBRA 
            continuation provision, and
                (ii) the waiting period (if any) (and affiliation 
            period, if applicable) imposed with respect to the 
            individual for any coverage under such plan.

        (C) Issuer compliance

            To the extent that medical care under a group health plan 
        consists of health insurance coverage offered in connection with 
        the plan, the plan is deemed to have satisfied the certification 
        requirement under this paragraph if the issuer provides for such 
        certification in accordance with this paragraph.

         (2) Disclosure of information on previous benefits

        (A) In general

            In the case of an election described in subsection (c)(3)(B) 
        by a group health plan, if the plan enrolls an individual for 
        coverage under the plan and the individual provides a 
        certification of coverage of the individual under paragraph 
        (1)--
                (i) upon request of such plan, the entity which issued 
            the certification provided by the individual shall promptly 
            disclose to such requesting plan information on coverage of 
            classes and categories of health benefits available under 
            such entity's plan, and
                (ii) such entity may charge the requesting plan or 
            issuer for the reasonable cost of disclosing such 
            information.

                           (3) Regulations

        The Secretary shall establish rules to prevent an entity's 
    failure to provide information under paragraph (1) or (2) with 
    respect to previous coverage of an individual from adversely 
    affecting any subsequent coverage of the individual under another 
    group health plan or health insurance coverage.

(f) Special enrollment periods

                (1) Individuals losing other coverage

        A group health plan shall permit an employee who is eligible, 
    but not enrolled, for coverage under the terms of the plan (or a 
    dependent of such an employee if the dependent is eligible, but not 
    enrolled, for coverage under such terms) to enroll for coverage 
    under the terms of the plan if each of the following conditions is 
    met:
            (A) The employee or dependent was covered under a group 
        health plan or had health insurance coverage at the time 
        coverage was previously offered to the employee or individual.
            (B) The employee stated in writing at such time that 
        coverage under a group health plan or health insurance coverage 
        was the reason for declining enrollment, but only if the plan 
        sponsor (or the health insurance issuer offering health 
        insurance coverage in connection with the plan) required such a 
        statement at such time and provided the employee with notice of 
        such requirement (and the consequences of such requirement) at 
        such time.
            (C) The employee's or dependent's coverage described in 
        subparagraph (A)--
                (i) was under a COBRA continuation provision and the 
            coverage under such provision was exhausted; or
                (ii) was not under such a provision and either the 
            coverage was terminated as a result of loss of eligibility 
            for the coverage (including as a result of legal separation, 
            divorce, death, termination of employment, or reduction in 
            the number of hours of employment) or employer contributions 
            toward such coverage were terminated.

            (D) Under the terms of the plan, the employee requests such 
        enrollment not later than 30 days after the date of exhaustion 
        of coverage described in subparagraph (C)(i) or termination of 
        coverage or employer contribution described in subparagraph 
        (C)(ii).

                   (2) For dependent beneficiaries

        (A) In general

            If--
                (i) a group health plan makes coverage available with 
            respect to a dependent of an individual,
                (ii) the individual is a participant under the plan (or 
            has met any waiting period applicable to becoming a 
            participant under the plan and is eligible to be enrolled 
            under the plan but for a failure to enroll during a previous 
            enrollment period), and
                (iii) a person becomes such a dependent of the 
            individual through marriage, birth, or adoption or placement 
            for adoption,

        the group health plan shall provide for a dependent special 
        enrollment period described in subparagraph (B) during which the 
        person (or, if not otherwise enrolled, the individual) may be 
        enrolled under the plan as a dependent of the individual, and in 
        the case of the birth or adoption of a child, the spouse of the 
        individual may be enrolled as a dependent of the individual if 
        such spouse is otherwise eligible for coverage.

        (B) Dependent special enrollment period

            The dependent special enrollment period under this 
        subparagraph shall be a period of not less than 30 days and 
        shall begin on the later of--
                (i) the date dependent coverage is made available, or
                (ii) the date of the marriage, birth, or adoption or 
            placement for adoption (as the case may be) described in 
            subparagraph (A)(iii).

        (C) No waiting period

            If an individual seeks coverage of a dependent during the 
        first 30 days of such a dependent special enrollment period, the 
        coverage of the dependent shall become effective--
                (i) in the case of marriage, not later than the first 
            day of the first month beginning after the date the 
            completed request for enrollment is received;
                (ii) in the case of a dependent's birth, as of the date 
            of such birth; or
                (iii) in the case of a dependent's adoption or placement 
            for adoption, the date of such adoption or placement for 
            adoption.

(Added Pub. L. 104-191, title IV, Sec. 401(a), Aug. 21, 1996, 110 Stat. 
2073; amended Pub. L. 105-34, title XV, Sec. 1531(b)(1)(A), Aug. 5, 
1997, 111 Stat. 1084.)

                       References in Text

    The Social Security Act, referred to in subsec. (c)(1)(C), (D), is 
act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Parts A and B of 
title XVIII of the Act are classified generally to parts A (Sec. 1395c 
et seq.) and B (Sec. 1395j et seq.) of subchapter XVIII of chapter 7 of 
Title 42, The Public Health and Welfare. Title XIX of the Act is 
classified generally to subchapter XIX (Sec. 1396 et seq.) of chapter 7 
of Title 42. Section 1928 of the Act is classified to section 1396s of 
Title 42. For complete classification of this Act to the Code, see 
section 1305 of Title 42 and Tables.


                               Amendments

    1997--Subsec. (c)(1). Pub. L. 105-34 substituted ``section 9832(c)'' 
for ``section 9805(c)'' in concluding provisions.


                    Effective Date of 1997 Amendment

    Amendment by Pub. L. 105-34 applicable with respect to group health 
plans for plan years beginning on or after Jan. 1, 1998, see section 
1531(c) of Pub. L. 105-34, set out as a note under section 4980D of this 
title.


                             Effective Date

    Section 401(c) of Pub. L. 104-191 provided that:
    ``(1) In general.--The amendments made by this section [enacting 
this subtitle] shall apply to plan years beginning after June 30, 1997.
    ``(2) Determination of creditable coverage.--
        ``(A) Period of coverage.--
            ``(i) In general.--Subject to clause (ii), no period before 
        July 1, 1996, shall be taken into account under chapter 100 of 
        the Internal Revenue Code of 1986 (as added by this section) in 
        determining creditable coverage.
            ``(ii) Special rule for certain periods.--The Secretary of 
        the Treasury, consistent with section 104 [42 U.S.C. 300gg-92 
        note], shall provide for a process whereby individuals who need 
        to establish creditable coverage for periods before July 1, 
        1996, and who would have such coverage credited but for clause 
        (i) may be given credit for creditable coverage for such periods 
        through the presentation of documents or other means.
        ``(B) Certifications, etc.--
            ``(i) In general.--Subject to clauses (ii) and (iii), 
        subsection (e) of section 9801 of the Internal Revenue Code of 
        1986 (as added by this section) shall apply to events occurring 
        after June 30, 1996.
            ``(ii) No certification required to be provided before june 
        1, 1997.--In no case is a certification required to be provided 
        under such subsection before June 1, 1997.
            ``(iii) Certification only on written request for events 
        occurring before october 1, 1996.--In the case of an event 
        occurring after June 30, 1996, and before October 1, 1996, a 
        certification is not required to be provided under such 
        subsection unless an individual (with respect to whom the 
        certification is otherwise required to be made) requests such 
        certification in writing.
        ``(C) Transitional rule.--In the case of an individual who seeks 
    to establish creditable coverage for any period for which 
    certification is not required because it relates to an event 
    occurring before June 30, 1996--
            ``(i) the individual may present other credible evidence of 
        such coverage in order to establish the period of creditable 
        coverage; and
            ``(ii) a group health plan and a health insurance issuer 
        shall not be subject to any penalty or enforcement action with 
        respect to the plan's or issuer's crediting (or not crediting) 
        such coverage if the plan or issuer has sought to comply in good 
        faith with the applicable requirements under the amendments made 
        by this section.
    ``(3) Special rule for collective bargaining agreements.--Except as 
provided in paragraph (2), in the case of a group health plan maintained 
pursuant to 1 or more collective bargaining agreements between employee 
representatives and one or more employers ratified before the date of 
the enactment of this Act [Aug. 21, 1996], the amendments made by this 
section shall not apply to plan years beginning before the later of--
        ``(A) the date on which the last of the collective bargaining 
    agreements relating to the plan terminates (determined without 
    regard to any extension thereof agreed to after the date of the 
    enactment of this Act), or
        ``(B) July 1, 1997.
For purposes of subparagraph (A), any plan amendment made pursuant to a 
collective bargaining agreement relating to the plan which amends the 
plan solely to conform to any requirement added by this section shall 
not be treated as a termination of such collective bargaining agreement.
    ``(4) Timely regulations.--The Secretary of the Treasury, consistent 
with section 104, shall first issue by not later than April 1, 1997, 
such regulations as may be necessary to carry out the amendments made by 
this section.
    ``(5) Limitation on actions.--No enforcement action shall be taken, 
pursuant to the amendments made by this section, against a group health 
plan or health insurance issuer with respect to a violation of a 
requirement imposed by such amendments before January 1, 1998, or, if 
later, the date of issuance of regulations referred to in paragraph (4), 
if the plan or issuer has sought to comply in good faith with such 
requirements.''

                  Section Referred to in Other Sections

    This section is referred to in section 9802 of this title.
