[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3040 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 3040

To make COBRA continuing coverage more affordable for laid-off American 
                                workers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 4, 2001

  Mr. Schiff (for himself, Mr. Hinchey, and Mr. Frost) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To make COBRA continuing coverage more affordable for laid-off American 
                                workers.

    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 Act of 2001''.

SEC. 2. CREDIT FOR EMPLOYER-PROVIDED COBRA COVERAGE.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business-related 
credits) is amended by adding at the end the following new section:

``SEC. 45G. EMPLOYER-PROVIDED COBRA COVERAGE.

    ``(a) In General.--For purposes of section 38, the employer-
provided COBRA coverage credit determined under this section for the 
taxable year is an amount equal to the COBRA premiums paid or incurred 
by the taxpayer for continuation coverage during the taxable year of 
any individual who is a qualified beneficiary by reason of--
            ``(1) being a covered employee with respect to the 
        taxpayer, or
            ``(2) bearing a relationship to such a covered employee.
    ``(b) Dollar Limitation.--The credit determined under subsection 
(a) for coverage for any month with respect to each qualified 
beneficiary shall not exceed whichever of the following is the least:
            ``(1) 50 percent of the COBRA premium for continuation 
        coverage for such month.
            ``(2) $110 in the case of self-only coverage and $290 in 
        the case of family coverage for such month.
    ``(c) COBRA Premiums.--For purposes of this section, the term 
`COBRA premiums' means, with respect to any period of continuation 
coverage for a qualified beneficiary, the cost of such coverage for 
such period to the extent such cost does not exceed the maximum amount 
which (without regard to this section) may be required under section 
4980B(f)(2)(C) to be paid for such coverage for such beneficiary.
    ``(d) Other Definitions.--Terms used in this section which are also 
used in section 4980B shall have the respective meanings given such 
terms by section 4980B.''
    (b) Denial of Double Benefit.--Section 280C of such Code (relating 
to certain expenses for which credits are allowable) is amended by 
adding at the end the following new subsection:
    ``(d) Credit for Employer-Provided COBRA Coverage.--No deduction 
shall be allowed for that portion of the COBRA premiums (as defined in 
section 45G(c)) otherwise allowable as a deduction for the taxable year 
which is equal to the amount of the credit allowable for the taxable 
year under section 45G (determined without regard to section 38(c)).''
    (c) Conforming Amendments.--
            (1) Subsection (b) of section 38 of such Code is amended by 
        striking ``plus'' at the end of paragraph (14), by striking the 
        period at the end of paragraph (15) and inserting ``, plus'', 
        and by adding at the end the following:
            ``(16) the employer-provided COBRA coverage credit 
        determined under section 45G.''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

                              ``Sec. 45G. Employer-provided COBRA 
                                        coverage.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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