102 STAT. 3624
PUBLIC LAW 100-647—NOV. 10, 1988 "(B)
SPECIAL
RULE
FOR TERMINATIONS AND REDUCED
EMPLOYMENT.—In the case of a qualifying event described in subsection (f)(3)(B), the term 'qualified beneficiary' includes the covered employee. "(C) EXCEPTION FOR NONRESIDENT ALIENS.—Notwithstand-
ing subparagraphs (A) and (B), the term 'qualified beneficiary' does not include an individual whose status as a covered employee is attributable to a period in which such individual was a nonresident alien who received no earned income (within the meaning of section 911(d)(2)) from the employer which constituted income from sources within the United States (within the meaning of section 861(a)(3)). If an individual is not a qualified beneficiary pursuant to the previous sentence, a spouse or dependent child of such individual shall not be considered a qualified beneficiary by virtue of the relationship of the individual. "(D) SPECIAL RULE FOR RETIREES AND WIDOWS.—In the case of a qualifying event described in subsection (f)(3)(F), the term 'qualified beneficiary' includes a covered employee who had retired on or before the date of substantial elimination of coverage and any other individual who, on the day before such qualifying event, is a beneficiary under the plan— "(i) as the spouse of the covered employee, "(ii) as the dependent child of the covered employee, or "(iii) as the surviving spouse of the covered employee. "(2) GROUP HEALTH PLAN.—The term 'group health plan' has the meaning given such term by section 162(i)." "(3) PLAN ADMINISTRATOR.—The term 'plan administrator' has the meaning given the term 'administrator' by section 3(16XA) of the Employee Retirement Income Security Act of 1974. "(4) CORRECTION.—A failure of a group health plan to meet the requirements of subsection (f) with respect to any qualified beneficiary shall be treated as corrected if^ "(A) such failure is retroactively undone to the extent possible, and "(B) the qualified beneficiary is placed in a financial position which is as good as such beneficiary would have been in had such failure not occurred. For purposes of applying subparagraph (B), the qualified beneficiary shall be treated as if he had elected the most favorable coverage in light of the expenses he incurred since the failure first occurred.", (b) TECHNICAL AMENDMENTS.—
(1) Section 106 of the 1986 Code (relating to contributions by employer to accident and health plans) is amended to read as follows: "SEC. 106. CONTRIBUTIONS BY EMPLOYER TO ACCIDENT AND HEALTH PLANS.
"Gross income of an employee does not include employer-provided coverage under an accident or health plan." (2) Subsection (i) of section 162 of the 1986 Code (relating to group health plans) is amended by striking out paragraph (2) and by redesignating paragraph (3) as paragraph (2).
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