### Question
How does the law define applicable health benefits?


### Answer
Under *26 U.S.C. § 420*, **applicable health benefits** is defined as:

> health benefits or coverage which are provided to—


(i) retired employees who, immediately before the qualified transfer, are entitled to receive such benefits by reason of retirement and who are entitled to pension benefits under the plan, and


(ii) their spouses and dependents

#### Citation:
  - *26 U.S.C. § 420*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter D-Deferred Compensation, Etc. > PART I-PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC. > Subpart E-Treatment of Transfers to Retiree Health Accounts**

