109 HR 4385 IH: To amend the Internal Revenue Code of 1986 to provide that employees of certain companies seeking bankruptcy protection are eligible for the health coverage tax credit, and for other purposes. U.S. House of Representatives 2005-11-17 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 1st Session H. R. 4385 IN THE HOUSE OF REPRESENTATIVES November 17, 2005 Mr. Strickland (for himself, Mr. Ryan of Ohio, and Mr. Brown of Ohio) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to provide that employees of certain companies seeking bankruptcy protection are eligible for the health coverage tax credit, and for other purposes.

1.

Eligibility of employees of corporations in bankruptcy for health coverage tax credit

(a)

In general

Section 35 of the Internal Revenue Code of 1986 (relating to health insurance costs of eligible individuals) is amended by adding at the end the following new subsection: (h)

Application to eligible bankrupt business employees

(1)

In general

An eligible bankrupt business employee shall be treated as an eligible individual for purposes of this section and section 7527. (2)

Employer provided health care

In the case of an eligible bankrupt business employee (and any qualifying family member of such employee), for purposes of this section and section 7527— (A)the term qualified health insurance shall include coverage under a group health plan that is available through the employment of such employee by the corporation referred to in paragraph (3)(A), and (B)subsection (f)(1) shall not apply with respect to such coverage. (3)

Eligible bankrupt business employee

For purposes of this subsection— (A)

In general

The term eligible bankrupt business employee means any individual who is employed by a corporation on the date that such corporation becomes a debtor in a case under chapter 11 of title 11, United States Code. (B)

Time limitations

(i)

In general

An individual shall be treated as an eligible bankrupt business employee only with respect to the period of months beginning with the month which includes the date described in subparagraph (A) and ending with the month which includes the earliest of— (I)the date that such debtor receives a discharge in such case, (II)the date that such case is converted to a case under chapter 7 of such title, or (III)the date that such case is dismissed. (ii)

2 year limitation

An individual shall not be treated as an eligible bankrupt business employee with respect to any month beginning after the 2-year period beginning on the date described in subparagraph (A). (C)

Coordination with TAA and PBGC recipient status

An individual shall not be treated as an eligible bankrupt business employee with respect to any month if such individual is an eligible TAA recipient, an eligible alternative TAA recipient, or an eligible PBGC pension recipient with respect to such month. . (b)

Effective date

The amendment made by this section shall apply to months beginning after the date of the enactment of this Act, with respect to cases commenced under title 11, United State Code, before, on, or after such date.

2.

Other health care tax credit improvements

(a)

Decrease in age eligibility requirement for PBGC pension recipients

Subparagraph (A) of section 35(c)(4) of the Internal Revenue Code of 1986 (defining eligible PBGC pension recipient) is amended by striking age 55 and inserting age 50. (b)

Repeal of 3 month requirement of existing coverage

Clause (i) of section 35(e)(2)(B) of such Code (defining qualifying individual) is amended by striking 9801(c) and inserting 9801(c) (prior to the employment separation necessary to attain the status of an eligible individual). (c)

Eligibility of spouse of certain individuals entitled to medicare

Subsection (b) of section 35 of such Code (defining eligible coverage month) is amended by adding at the end the following new paragraph: (3)

Special rule for spouse of individual entitled to medicare

Any month which would be an eligible coverage month with respect to a taxpayer (determined without regard to subsection (f)(2)(A)) shall be an eligible coverage month for any spouse of such taxpayer.. (d)

Effective date

The amendments made by this section shall apply to months beginning after the date of the enactment of this Act.