[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2005 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 2005
To amend the Internal Revenue Code of 1986, the Employee Retirement
Income Security Act of 1974, and the Public Health Service Act to
extend the basic period for health care continuation coverage from 18
months to 5 years, to permit a further extension of continuation
coverage for individuals age 55 or older, and to provide for a 50
percent refundable tax credit towards premiums for COBRA continuation
coverage.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 24, 2001
Mr. Stark (for himself and Mr. Moakley) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addition
to the Committees on Education and the Workforce and Energy and
Commerce, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986, the Employee Retirement
Income Security Act of 1974, and the Public Health Service Act to
extend the basic period for health care continuation coverage from 18
months to 5 years, to permit a further extension of continuation
coverage for individuals age 55 or older, and to provide for a 50
percent refundable tax credit towards premiums for COBRA continuation
coverage.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``COBRA Coverage Extension and
Affordability Act of 2001''.
SEC. 2. EXTENSION OF BASIC COBRA CONTINUATION PERIOD FROM 18 MONTHS TO
5 YEARS.
(a) Internal Revenue Code Amendments.--Section 4980B(f)(2) of the
Internal Revenue Code of 1986 is amended--
(1) by amending subclause (I) of subparagraph (B)(i) to
read as follows:
``(I) General rule.--In the case of
a qualifying event not described in
paragraph (3)(F), the date which is 60
months after the date of the qualifying
event.'';
(2) in subparagraph (B)(i)--
(A) by striking subclause (II);
(B) by striking subclauses (IV) and all that
follows;
(C) by redesignating subclause (III) as subclause
(II); and
(D) in subclause (II), as so redesignated, by
inserting before the period at the end the following:
``or, in such case and if later, 60 months after the
date of the qualifying event''; and
(3) by striking the last sentence in subparagraph (C).
(b) ERISA Amendments.--Section 602 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1162) is amended--
(1) by amending clause (i) of paragraph (2)(A) to read as
follows:
``(i) General rule.--In the case of a
qualifying event not described in section
603(6), the date which is 60 months after the
date of the qualifying event.'';
(2) in paragraph (2)(A)--
(A) by striking clause (ii);
(B) by striking clause (iv) and all that follows;
(C) by redesignating clause (iii) as clause (ii);
and
(D) in clause (ii), as so redesignated, by striking
``36 months after the date of the death of the covered
employee'' and inserting ``the later of (I) 36 months
after the date of the death of the covered employee, or
(II) 60 months after the date of the qualifying
event''; and
(3) by striking the last sentence in paragraph (3).
(c) PHSA Amendments.--Section 2202 of the Public Health Service Act
429 U.S.C. 300bb-2) is amended--
(1) by amending subparagraph (A) of paragraph (2)(A) to
read as follows:
``(A) Maximum required period.--The date which is
60 months after the date of the qualifying event.'';
and
(2) by striking the last sentence of paragraph (3).
(d) Effective Date.--The amendments made by this section shall
apply to plan years beginning on or after January 1, 2002, with respect
to individuals whose period of extended coverage has not otherwise
expired as of the first day of the first such plan year.
SEC. 3. FURTHER EXTENSION OF COBRA CONTINUATION COVERAGE FOR
INDIVIDUALS AGE 55 OR OLDER.
(a) Internal Revenue Code Amendments.--Section 4980B(f)(2) of the
Internal Revenue Code of 1986 is amended--
(1) in subparagraph (B)(i), by inserting ``.--Subject to
subparagraph (F)(i)--'' after ``period'';
(2) in subparagraph (C)(i), by inserting ``subject to
subparagraph (F)(ii),'' after ``(i)''; and
(3) by adding at the end the following new subparagraph:
``(F) Extension of coverage for individuals age 55
or older.--In the case of an individual who attains the
age of 55 on the date the period of extended coverage
under this section would otherwise end by virtue of the
application of a durational limitation in subparagraph
(B)(i)--
``(i) such durational limitations shall no
longer apply to the individual; and
``(ii) during the period of any extended
coverage solely by reason of the application of
clause (i), in applying subparagraph (C)(i) any
reference in such subparagraph to `102 percent'
is deemed a reference to `125 percent'.''.
(b) ERISA Amendments.--Section 602 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1162) is amended--
(1) in paragraph (2)(A), by inserting ``Subject to
paragraph (6)(A)--'' after ``period.--'';
(2) in paragraph (3)(A), by inserting ``subject to
paragraph (6)(B),'' after ``(A)''; and
(3) by adding at the end the following new paragraph:
``(6) Extension of coverage for individuals age 55 or
older.--In the case of an individual who attains the age of 55
on the date the period of extended coverage under this section
would otherwise end by virtue of the application of a
durational limitation in paragraph (2)(A)--
``(A) such durational limitations shall no longer
apply to the individual; and
``(B) during the period of any extended coverage
solely by reason of the application of subparagraph
(A), in applying paragraph (3)(A) any reference in such
paragraph to `102 percent' is deemed a reference to
`125 percent'.''.
(c) PHSA Amendments.--Section 2202 of the Public Health Service Act
(42 U.S.C. 300bb-2) is amended--
(1) in paragraph (2)(A), by inserting ``Subject to
paragraph (6)(A)--'' after ``period.--'';
(2) in paragraph (3)(A), by inserting ``subject to
paragraph (6)(B),'' after ``(A)''; and
(3) by adding at the end the following new paragraph:
``(6) Extension of coverage for individuals age 55 or
older.--In the case of an individual who attains the age of 55
on the date the period of extended coverage under this section
would otherwise end by virtue of the application of a
durational limitation in paragraph (2)(A)--
``(A) such durational limitations shall no longer
apply to the individual; and
``(B) during the period of any extended coverage
solely by reason of the application of subparagraph
(A), in applying paragraph (3)(A) any reference in such
paragraph to `102 percent' is deemed a reference to
`125 percent'.''.
(d) Effective Date.--The amendments made by this section apply with
respect to plan years beginning on or after January 1, 2002, with
respect to individuals whose period of extended coverage otherwise ends
on or after first day of the first such plan year.
SEC. 4. 50 PERCENT REFUNDABLE TAX CREDIT TOWARDS PREMIUMS FOR COBRA
CONTINUATION COVERAGE.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to nonrefundable
personal credits) is amended by inserting after section 25A the
following new section:
``SEC. 25B. COBRA CONTINUATION COVERAGE PREMIUMS.
``(a) In General.--In the case of an individual, there shall be
allowed as a credit against the tax imposed by this chapter for the
taxable year an amount equal to 50 percent of the amount paid during
such year as continuation health coverage premiums.
``(b) Continuation Health Coverage Premiums Defined.--For purposes
of this section, the term `continuation health coverage premiums'
means, for any period, premiums paid for continuation coverage (as
defined in section 4980B(f)) under a group health plan for such period
but only if failure to offer such coverage to the taxpayer for such
period would constitute a failure by such health plan to meet the
requirements of section 4980B(f).''
(b) Clerical Amendment.--The table of sections for subpart A of
part IV of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 25A the following new
item:
``Sec. 25B. COBRA continuation coverage
premiums.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001, for premiums
for months beginning with January 2002.
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