§332. TAX TREATMENT OF COMPANIES ISSUING QUALIFIED ACCELERATED DEATH BENEFIT RIDERS.

Health Insurance Portability and Accountability Act of 1996

TITLE III—TAX-RELATED HEALTH PROVISIONS

(a) Qualified Accelerated Death Benefit Riders Treated as Life Insurance.—Section 818 (relating to other definitions and special rules) is amended by adding at the end the following new subsection:

‘‘(g) Qualified Accelerated Death Benefit Riders Treated as Life Insurance.—For purposes of this part—

‘‘(1) In general.—Any reference to a life insurance contract shall be treated as including a reference to a qualified accelerated death benefit rider on such contract.

‘‘(2) Qualified accelerated death benefit riders.—For purposes of this subsection, the term 'qualified accelerated death benefit rider' means any rider on a life insurance contract if the only payments under the rider are payments meeting the requirements of section 101(g).

‘‘(3) Exception for long-term care riders.—Paragraph (1) shall not apply to any rider which is treated as a long-term care insurance contract under section 7702B.’’.

(b) Effective Date.— (26 usc 818)

(b)(1) In general.—The amendment made by this section shall take effect on January 1, 1997.

(b)(2) Issuance of rider not treated as material change.—For purposes of applying sections 101(f), 7702, and 7702A of the Internal Revenue Code of 1986 to any contract—

(b)(2)(A) the issuance of a qualified accelerated death benefit rider (as defined in section 818(g) of such Code (as added by this Act)), and

(b)(2)(B) the addition of any provision required to conform an accelerated death benefit rider to the requirements of such section 818(g), shall not be treated as a modification or material change of such contract.