102 STAT. 3484 PUBLIC LAW 100-647—NOV. 10, 1988

able year with or within which the plan year following
the plan year in which the excess benefits occurred
ends."

(2) Paragraph (4) of section 89(b) of the 1986 Code (defining
nontaxable benefits) is amended by adding at the end thereof
the following new sentence: "Such term includes any group-
term life insurance the cost of which is includible in gross
income under section 79."

(3) Paragraph (1) of section 89(g) of the 1986 Code (relating to
the aggregation of comparable health plans) is amended by
adding at the end thereof the following new subparagraph:

"(C) EMPLOYEES COVERED BY MORE THAN i PLAN.—The
Secretary may provide that 2 or more plans providing
benefits to the same participant shall be treated as 1 plan
for purposes of applying subsections (dXIXB), (dX2), and (f)."

(4) Subparagraph (B) of section 89(gX2) of the 1986 Code
(relating to sworn statements) is amended by adding at the end
thereof the following new sentence: "No statement shall be
required under clause (ii) with respect to any individual eligible
for coverage at no cost under a health plan which provides core
health benefits and with respect to whom the employee does not
elect any core health coverage from the employer/1

(5) Subparagraph (D) of section 89(gX2) of the 1986 Code is
amended by striking out "under such plan" and inserting in
lieu thereof "under such plans".

(6) Section 89(g) of the 1986 Code is amended by striking out
paragraph (6).

(7) Subparagraph (A) of section 89(hXD of the 1986 Code
(relating to excluded employees) is amended by inserting "(or
1st day of a period of less than 31 days specified by the plan)"
after 'rmonth .

(8) Section 89(j) of the 1986 Code (relating to other definitions
and special rules) is amended by adding at the end thereof the
following new paragraph:

"(12) EMPLOYERS WITH ONLY HIGHLY COMPENSATED EMPLOY-
EES.—The requirements of subsections (d) and (e) shall not apply
to any statutory employee benefit plan for any year for which
the only employees of the employer maintaining the plan are
highly compensated employees."

(9) Section 89(k) of the 1986 Code (relating to requirement that
plan be in writing) is amended by adding at the end thereof the
following new paragraph:

"(5) Loss OF EXEMPTION FOR CERTAIN PLANS.—If a plan de-
scribed in paragraph (2XE) fails to meet the requirements of
paragraph (1), the organization which is part of such plan shall
not be exempt from tax under section 501(a)."

(10) Section 6652(kX2XB) of the 1986 Code (relating to amount
of additional tax) is amended by striking out "subsection (gX3)"
and inserting in lieu thereof "subsection (gX3XCXi)".

(11XA) Subsection (a) of section 125 of the 1986 Code is
amended to read as follows:

"(a) GENERAL RULE.—Except as provided in subsection (b), no
amount shall be included in the gross income of a participant in a
cafeteria plan solely because, under the plan, the participant may
choose among the benefits of the plan/'

(B) Paragraph <1) of section 125(b) of the 1986 Code iramended
by striking out "A plan shall be treated as failing to meet the