PUBLIC LAW 100-647—NOV. 10, 1988
102 STAT. 3633
may elect to treat base compensation as compensation." (B) Subparagraph (A) of section 89gX4) of the 1986 Code is amended by striking out "(within the meaning of section 414(s))". (c) TRANSITIONAL PROVISIONS FOR PURPOSES OF SECTION 89.— (1) TEMPORARY VALUATION RULES.—In the case of testing years beginning before the later of January 1, 1991, or the date 1 year after the Secretary of the Treasury or his delegate first issues such valuation rules as are necessary to apply the provisions of section 89 of the 1986 Code to health plans (or if later the effective date of such rules)— (A) Section 89(g)(3)(B) of the 1986 Code shall not apply. (B)(i) Except as provided in clause (ii), the value of coverage under a health plan for purposes of section 89 of the 1986 Code shall be determined in substantially the same manner as costs under a health plan are determined under section 4980B(fK4) of the 1986 Code. (ii) For purposes of determining whether an employer meets the requirements of subsections (d), (e), and (f) of section 89 of the 1986 Code, value under clause (i) may be determined under any other reasonable method selected by the employer. (2) FORMER EMPLOYEES.—The amendments made by section 1151 of the Reform Act shall not apply to former employees who separated from service with the employer before January 1, 1989 (and were not reemployed on or sifter such date), and such former employees shall not be taken into account in determining whether the requirements of section 89 of the 1986 Code are met with respect to other former employees. The preceding sentence shall not apply to the extent that— (A) the value of employer-provided benefits provided to any such former employee exceeds the value of such benefits which were provided under the terms of the plan as in effect on December 31, 1988, or (B) the employer-provided benefits provided to such former employees are modified so as to discriminate in favor of such former employees who are highly compensated employees. Any excess value under the preceding sentence shall be determined without regard to any increase required by Federal law, regulation or rule or any increase which is the same for employees separating on or before December 31, 1988, and employees separating after such date and which does not discriminate in favor of highly compensated employees who separated from service after December 31, 1988. (3) WRITTEN PLAN REQUIREMENT.—The requirements of section 89(k)(l)(A) of the 1986 Code shall be treated as met with respect to any testing year beginning in 1989, if— (A) the plan is in writing before the close of such year, (B) the employees had reasonable notice of the plan's
essential features on or before the beginning of such year, and (C) the provisions of the written plan apply for the entire year. (4) RULES TO BE PRESCRIBED BEFORE NOVEMBER 15, 1988.—Not
later than November 15, 1988, the Secretary of the Treasury or
26 USC 89 note.
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