1.Short title; table of
contents
(a)This Act may be cited
as the TAA Health Coverage Improvement
Act of 2007
.
(b)The table of
contents for this Act is as follows:
Sec. 1. Short title; table of
contents.
Sec. 2. Improvement of the
affordability of the credit.
Sec. 3. 100 percent credit and
payment for monthly premiums paid prior to certification of eligibility for the
credit.
Sec. 4. Eligibility for certain
pension plan participants; presumptive eligibility.
Sec. 5. Clarification of
3-month creditable coverage requirement.
Sec. 6. TAA pre-certification
period rule for purposes of determining whether there is a 63-day lapse in
creditable coverage.
Sec. 7. Continued qualification
of family members after certain events.
Sec. 8. Offering of Federal
group coverage.
Sec. 9. Additional requirements
for individual health insurance costs.
Sec. 10. Alignment of COBRA
coverage with TAA period for TAA-eligible individuals.
Sec. 11. Notice
requirements.
Sec. 12. Annual report on
enhanced TAA benefits.
Sec. 13. Extension of national
emergency grants.
2.Improvement of the
affordability of the credit
(a)Improvement of
affordability
(1)Section 35(a) of the
Internal Revenue Code of 1986 (relating to credit for health insurance costs of
eligible individuals) is amended by striking 65
and inserting
95
.
(2)Section 7527(b) of
such Code (relating to advance payment of credit for health insurance costs of
eligible individuals) is amended by striking 65
and inserting
95
.
(b)The amendments made by
this section apply to taxable years beginning after December 31, 2007.
3.100 percent credit and
payment for monthly premiums paid prior to certification of eligibility for the
credit
(a)Subsection (a) of
section 35 of the Internal Revenue Code of 1986, as amended by section 2(a)(1),
is amended—
(1)by striking the subsection heading and all
that follows through “In case” and inserting “Amount of Credit.—
(1)In
case
;
and
(2)by adding at the end the following new
paragraph:
(2)100 percent
credit for months prior to issuance of eligibility certificateThe amount allowed as a credit against the
tax imposed by subtitle A shall be equal to 100 percent in the case of the
taxpayer’s first eligible coverage months occurring prior to the issuance of a
qualified health insurance costs credit eligibility
certificate.
.
(b)Payment for
premiums due prior to certification of eligibility for the creditSection 7527 of the Internal Revenue Code
of 1986 (relating to advance payment of credit for health insurance costs of
eligible individuals) is amended by adding at the end the following new
subsection:
(e)Payment for
premiums due prior to issuance of certificateThe program established under subsection
(a) shall provide—
(1)that the Secretary shall make payments on
behalf of a certified individual of an amount equal to 100 percent of the
premiums for coverage of the taxpayer and qualifying family members under
qualified health insurance for eligible coverage months (as defined in section
35(b)) occurring prior to the issuance of a qualified health insurance costs
credit eligibility certificate; and
(2)that any payments made under paragraph (1)
shall not be included in the gross income of the taxpayer on whose behalf such
payments were
made.
.
(c)The amendments made by
this section shall apply to months beginning after the date of the enactment of
this Act in taxable years ending after such date.
4.Eligibility for
certain pension plan recipients; presumptive eligibility
(a)Eligibility for
certain pension plan recipientsSubsection (c) of section 35 of the
Internal Revenue Code of 1986 is amended—
(1)in paragraph (1)—
(A)in subparagraph (B), by striking
and
at the end;
(B)in subparagraph (C), by striking the period
and inserting , and
; and
(C)by adding at the end the following:
(D)an eligible multiemployer pension
participant.
;
and
(2)by adding at the end the following new
paragraph:
(5)Eligible
multiemployer pension recipientThe term eligible multiemployer
pension recipient means, with respect to any month, any
individual—
(A)who has attained age 55 as of the first day
of such month,
(B)who is receiving a benefit from a
multiemployer plan (as defined in section 3(37)(A) of the
Employee Retirement Income Security Act of
1974), and
(C)whose former employer has withdrawn from
such multiemployer plan pursuant to section 4203(a) of such
Act.
.
(b)Presumptive
eligibility for petitioners for trade adjustment assistanceSubsection (c) of section 35 of the
Internal Revenue Code of 1986, as amended by subsection (a), is amended by
adding at the end the following new paragraph:
(6)Presumptive
status as a TAA recipientThe
term eligible individual shall include any individual who is
covered by a petition filed with the Secretary of Labor under section 221 of
the Trade Act of 1974. This paragraph
shall apply to any individual only with respect to months which—
(A)end after the date that such petition is so
filed, and
(B)begin before the earlier of—
(i)the 90th day after the date of filing of
such petition, or
(ii)the date on which the Secretary of Labor
makes a final determination with respect to such
petition.
.
(c)
(1)Paragraph (1) of section 7527(d) of such
Code is amended by striking or an eligible alternative TAA recipient (as
defined in section 35(c)(3))
and inserting , an eligible
alternative TAA recipient (as defined in section 35(c)(3)), an eligible
multiemployer pension recipient (as defined in section 35(c)(5), or an
individual who is an eligible individual by reason of section
35(c)(6)
.
(2)Section 173(f)(4) of the Workforce
Investment Act of 1998 (29 U.S.C. 2918(f)(4)) is amended—
(A)in subparagraph (B), by striking
and
at the end;
(B)in subparagraph (C), by striking the period
and inserting a comma; and
(C)by inserting after subparagraph (C), the
following new subparagraphs:
(D)an eligible multiemployer pension recipient
(as defined in section 35(c)(5) of the Internal Revenue Code of 1986),
and
(E)an individual who is an eligible individual
by reason of section 35(c)(6) of the Internal Revenue Code of
1986.
.
(d)Technical
amendment clarifying eligibility of certain displaced workers receiving a
benefit under a defined benefit pension planThe first sentence of section 35(c)(2) of
the Internal Revenue Code of 1986 is amended by inserting before the period the
following: , and shall include any such individual who would be eligible
to receive such an allowance but for the fact that the individual is receiving
a benefit under a defined benefit plan (as defined in section 3(35) of the
Employee Retirement Income Security Act of
1974).
.
(e)The amendments made by
this section shall apply to months beginning after the date of the enactment of
this Act in taxable years ending after such date.
5.Clarification of
3-MONTH creditable coverage requirement
(a)Clause (i) of section
35(e)(2)(B) of the Internal Revenue Code of 1986 (defining qualifying
individual) is amended by inserting (prior to the employment separation
necessary to attain the status of an eligible individual)
after
9801(c)
.
(b)Section
173(f)(2)(B)(ii)(I) of the Workforce Investment Act of 1998 (29 U.S.C.
2918(f)(2)(B)(ii)(I)) is amended by inserting (prior to the employment
separation necessary to attain the status of an eligible individual)
after 1986
.
(c)The amendments made by
this section shall apply to months beginning after the date of the enactment of
this Act in taxable years ending after such date.
6.TAA pre-certification
period rule for purposes of determining whether there is a 63-DAY lapse in
creditable coverage
(a)Section 701(c)(2)
of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1181(c)(2)) is amended by adding at the end the
following new subparagraph:
(C)
(i)TAA
pre-certification period ruleIn the case of a TAA-eligible individual,
the period beginning on the date the individual has a TAA-related loss of
coverage and ending on the date that is 5 days after the postmark date of the
notice by the Secretary (or by any person or entity designated by the
Secretary) that the individual is eligible for a qualified health insurance
costs credit eligibility certificate for purposes of section 7527 of the
Internal Revenue Code of 1986 shall not be taken into account in determining
the continuous period under subparagraph (A).
(ii)The terms TAA-eligible
individual, and TAA-related loss of coverage have the
meanings given such terms in section
605(b)(4)(C).
.
(b)Section 2701(c)(2)
of the Public Health Service Act (42
U.S.C. 300gg(c)(2)) is amended by adding at the end the following new
subparagraph:
(C)
(i)TAA
pre-certification period ruleIn the case of a TAA-eligible individual,
the period beginning on the date the individual has a TAA-related loss of
coverage and ending on the date that is 5 days after the postmark date of the
notice by the Secretary (or by any person or entity designated by the
Secretary) that the individual is eligible for a qualified health insurance
costs credit eligibility certificate for purposes of section 7527 of the
Internal Revenue Code of 1986 shall not be taken into account in determining
the continuous period under subparagraph (A).
(ii)The terms TAA-eligible
individual, and TAA-related loss of coverage have the
meanings given such terms in section
2205(b)(4)(C).
.
(c)Section 9801(c)(2)
of the Internal Revenue Code of 1986 (relating to not counting periods before
significant breaks in creditable coverage) is amended by adding at the end the
following new subparagraph:
(D)
(i)TAA
pre-certification period ruleIn the case of a TAA-eligible individual,
the period beginning on the date the individual has a TAA-related loss of
coverage and ending on the date which is 5 days after the postmark date of the
notice by the Secretary (or by any person or entity designated by the
Secretary) that the individual is eligible for a qualified health insurance
costs credit eligibility certificate for purposes of section 7527 shall not be
taken into account in determining the continuous period under subparagraph
(A).
(ii)The terms TAA-eligible
individual, and TAA-related loss of coverage have the
meanings given such terms in section
4980B(f)(5)(C)(iv).
.
(d)The amendments made by
this section shall apply to months beginning after the date of the enactment of
this Act in taxable years ending after such date.
7.Continued
qualification of family members after certain events
(a)Subsection (g) of
section 35 of the Internal Revenue Code of 1986 is amended by redesignating
paragraph (9) as paragraph (10) and inserting after paragraph (8) the following
new paragraph:
(9)Continued
qualification of family members after certain events
(A)Eligible
individual becomes medicare eligibleIn the case of a month which would be an
eligible coverage month with respect to an eligible individual but for
subsection (f)(2)(A), such month shall be treated as an eligible coverage month
with respect to any qualifying family member of such eligible individual (but
not with respect to such eligible individual).
(B)In the case of a month which would be an
eligible coverage month with respect to a former spouse of a taxpayer but for
the finalization of a divorce between the spouse and the taxpayer that occurs
during the period in which the taxpayer is an eligible individual, such month
shall be treated as an eligible coverage month with respect to such former
spouse.
(C)In the case of a month which would be an
eligible coverage month with respect to an eligible individual but for the
death of such individual, such month shall be treated as an eligible coverage
month with respect to any qualifying family of such eligible
individual.
.
(b)Section 173(f) of
the Workforce Investment Act of 1998 (29 U.S.C. 2918(f)) is amended by adding
at the end the following:
(8)Continued
qualification of family members after certain events
(A)Eligible
individual becomes medicare eligibleIn the case of a month which would be an
eligible coverage month with respect to an eligible individual but for
subsection (f)(2)(A), such month shall be treated as an eligible coverage month
with respect to any qualifying family member of such eligible individual (but
not with respect to such eligible individual).
(B)In the case of a month which would be an
eligible coverage month with respect to a former spouse of a taxpayer but for
the finalization of a divorce between the spouse and the taxpayer that occurs
during the period in which the taxpayer is an eligible individual, such month
shall be treated as an eligible coverage month with respect to such former
spouse.
(C)In the case of a month which would be an
eligible coverage month with respect to an eligible individual but for the
death of such individual, such month shall be treated as an eligible coverage
month with respect to any qualifying family of such eligible
individual.
.
(c)The amendments made by
this section shall apply to months beginning after the date of the enactment of
this Act in taxable years ending after such date.
8.Offering of Federal
group coverage
(a)Provision of
group coverage
(1)The Director of the
Office of Personnel Management jointly with the Secretary of the Treasury shall
establish a program under which eligible individuals (as defined in section
35(c) of the Internal Revenue Code of 1986) are offered enrollment under health
benefit plans that are made available under FEHBP.
(2)The terms and
conditions of health benefits plans offered under paragraph (1) shall be the
same as the terms and coverage offered under FEHBP, except that the percentage
of the premium charged to eligible individuals (as so defined) for such health
benefit plans shall be equal to 5 percent.
(3)The Director of the Office of Personnel
Management jointly with the Secretary of the Treasury shall conduct a study of
the impact of the offering of health benefit plans under this subsection on the
terms and conditions, including premiums, for health benefit plans offered
under FEHBP and shall submit to Congress, not later than 2 years after the date
of the enactment of this Act, a report on such study. Such report may contain
such recommendations regarding the establishment of separate risk pools for
individuals covered under FEHBP and eligible individuals covered under health
benefit plans offered under paragraph (1) as may be appropriate to protect the
interests of individuals covered under FEHBP and alleviate any adverse impact
on FEHBP that may result from the offering of such health benefit plans.
(4)In this section, the
term FEHBP means the Federal Employees Health Benefits Program
offered under chapter 89 of title 5, United States Code.
(b)
(1)Paragraph (1) of section 35(e) of the
Internal Revenue Code of 1986 is amended by adding at the end the following new
subparagraph:
(K)Coverage under a health benefits plan
offered under section 8(a)(1) of the TAA
Health Coverage Improvement Act of
2007.
.
(2)Section 173(f)(2)(A) of the Workforce
Investment Act of 1998 (29 U.S.C. 2918(f)(2)(A)) is amended by adding at the
end the following new clause:
(xi)Coverage under a health benefits plan
offered under section 8(a)(1) of the TAA
Health Coverage Improvement Act of
2007.
.
9.Additional
requirements for individual health insurance costs
(a)Subparagraph (A) of
section 35(e)(2) of such Code is amended by striking subparagraphs (B)
through (H) of paragraph (1)
and inserting paragraph (1) (other
than subparagraphs (A), (I), and (K) thereof)
.
(b)Rating system
requirementSubparagraph (J)
of section 35(e)(1) of such Code is amended by adding at the end the following:
For purposes of this subparagraph and clauses (ii), (iii), and (iv) of
subparagraph (F), such term does not include any insurance unless the premiums
for such insurance are restricted based on a community rating system
(determined other than on the basis of age).
.
(c)Clarification
of congressional intent To limit use of individual health insurance coverage
optionSection 35(e)(1)(J)
(relating to qualified health insurance) is amended in the matter preceding
clause (i), by inserting , but only
after under
individual health insurance
.
(d)Section 173(f)(2)
of the Workforce Investment Act of 1998 (29 U.S.C. 2918(f)(2)) is
amended—
(1)in subparagraph (A)(x), by adding at the
end the following: Such term does not include any insurance unless the
premiums for such insurance are restricted based on a community rating system
(determined other than on the basis of age).
; and
(2)in subparagraph (B)—
(A)in the matter preceding subclause (I), by
inserting , but only
after under individual health
insurance
; and
(B)in clause (i), by striking clauses
(ii) through (viii) of subparagraph (A)
and inserting
subparagraph (A) (other than clauses (i), (x), and (xi)
thereof)
.
10.Alignment of COBRA
coverage with TAA period for TAA-eligible individuals
(a)Section 605(b) of the
Employee Retirement Income Security Act of
1974 (29 U.S.C. 1165(b)) is amended—
(1)in the subsection heading, by inserting
and
Coverage
after Election
; and
(2)in paragraph (2)—
(A)in the paragraph heading, by inserting
and
period
after Commencement
;
(B)by striking and shall
and
inserting , shall
; and
(C)by inserting , and in no event shall
the maximum period required under section 602(2)(A) be less than the period
during which the individual is a TAA-eligible individual
before the
period at the end.
(b)Internal
Revenue Code of 1986Section
4980B(f)(5)(C) of the Internal Revenue Code of 1986 is amended—
(1)in the subparagraph heading, by inserting
and
coverage
after election
; and
(2)in clause (ii)—
(A)in the clause heading, by inserting
and
period
after Commencement
;
(B)by striking and shall
and
inserting , shall
; and
(C)by inserting , and in no event shall
the maximum period required under paragraph (2)(B)(i) be less than the period
during which the individual is a TAA-eligible individual
before the
period at the end.
(c)Public Health Service ActSection 2205(b) of the
Public Health Service Act (42 U.S.C.
300bb–5(b)) is amended—
(1)in the subsection heading, by inserting
and
Coverage
after Election
; and
(2)in paragraph (2)—
(A)in the paragraph heading, by inserting
and
period
after Commencement
;
(B)by striking and shall
and
inserting , shall
; and
(C)by inserting , and in no event shall
the maximum period required under section 2202(2)(A) be less than the period
during which the individual is a TAA-eligible individual
before the
period at the end.
11.Section 7527 of
the Internal Revenue Code of 1986 (relating to advance payment of credit for
health insurance costs of eligible individuals), as amended by section 3(b), is
amended by adding at the end the following new subsection:
(f)Inclusion of
certain informationThe
notice by the Secretary (or by any person or entity designated by the
Secretary) that an individual is eligible for a qualified health insurance
costs credit eligibility certificate shall include—
(1)information
explaining how the program established under subsection (a) works with the
credit established under section 35,
(2)the name, address, and telephone number of
the State office or offices responsible for determining that the individual is
eligible for such certificate and for providing the individual with assistance
with enrollment in qualified health insurance (as defined in section
35(e)),
(3)a list of the coverage options that are
treated as qualified health insurance (as so defined) by the State in which the
individual resides, and
(4)in the case of a TAA-eligible individual
(as defined in section 4980B(f)(5)(C)(iv)(II)), a statement informing the
individual that the individual has 63 days from the date that is 5 days after
the postmark date of such notice to enroll in such insurance without a lapse in
creditable coverage (as defined in section
9801(c)).
.
12.Annual report on
enhanced TAA benefitsNot
later than October 1 of each year (beginning in 2008) the Secretary of the
Treasury, after consultation with the Secretary of Labor, shall report to the
Committee on Finance and the Committee on Health, Education, Labor, and
Pensions of the Senate and the Committee on Ways and Means and the Committee on
Education and the Workforce of the House of Representatives the following
information with respect to the most recent taxable year ending before such
date:
(1)The total number of participants utilizing
the health insurance tax credit under section 35 of the Internal Revenue Code
of 1986, including a measurement of such participants identified—
(A)by State, and
(B)by coverage under COBRA continuation
provisions (as defined in section 9832(d)(1) of such Code) and by non-COBRA
coverage (further identified by group and individual market).
(2)The range of monthly health insurance
premiums offered and the average and median monthly health insurance premiums
offered to TAA-eligible individuals (as defined in section
4980B(f)(5)(C)(iv)(II) of such Code) under COBRA continuation provisions (as
defined in section 9832(d)(1) of such Code), State-based continuation coverage
provided under a State law that requires such coverage, and each category of
coverage described in section 35(e)(1) of such Code, identified by State and by
the actuarial value of such coverage and the specific benefits provided and
cost-sharing imposed under such coverage.
(3)The number of States applying for and
receiving national emergency grants under section 173(f) of the Workforce
Investment Act of 1998 (29 U.S.C. 2918(f)) and the time necessary for
application approval of such grants.
(4)The cost of administering the health credit
program under section 35 of such Code, by function, including the cost of
subcontractors.
13.Extension of national
emergency grants
(a)Section 173(f) of the
Workforce Investment Act of 1998 (29 U.S.C. 2918(f)) is amended—
(1)by striking paragraph (1) and inserting the
following new paragraph:
(1)
(A)Health
insurance coverage for eligible individuals in order to obtain qualified health
insurance that has guaranteed issue and other consumer
protectionsFunds made
available to a State or entity under paragraph (4)(A) of subsection (a) shall
be used to provide an eligible individual described in paragraph (4)(C) and
such individual’s qualifying family members with health insurance coverage for
the 3-month period that immediately precedes the first eligible coverage month
(as defined in section 35(b) of the Internal Revenue Code of 1986) in which
such eligible individual and such individual’s qualifying family members are
covered by qualified health insurance that meets the requirements described in
clauses (i) through (iv) of section 35(e)(2)(A) of the Internal Revenue Code of
1986 (or such longer minimum period as is necessary in order for such eligible
individual and such individual’s qualifying family members to be covered by
qualified health insurance that meets such requirements).
(B)Funds made available to
a State or entity under paragraph (4)(A) of subsection (a) may be used by the
State or entity for the following:
(i)Health
insurance coverageTo assist
an eligible individual and such individual’s qualifying family members with
enrolling in health insurance coverage and qualified health insurance or paying
premiums for such coverage or insurance.
(ii)Administrative
expenses and start-up expenses to establish group health plan coverage options
for qualified health insuranceTo pay the administrative expenses related
to the enrollment of eligible individuals and such individuals’ qualifying
family members in health insurance coverage and qualified health insurance,
including—
(I)eligibility verification activities;
(II)the notification of eligible individuals of
available health insurance and qualified health insurance options;
(III)processing qualified health insurance costs
credit eligibility certificates provided for under section 7527 of the Internal
Revenue Code of 1986;
(IV)providing assistance to eligible
individuals in enrolling in health insurance coverage and qualified health
insurance;
(V)the development or installation of
necessary data management systems; and
(VI)any other expenses determined appropriate
by the Secretary, including start-up costs and on going administrative
expenses, in order for the State to treat the coverage described in
subparagraph (C), (D), (E), or (F)(i) of section 35(e)(1) of the Internal
Revenue Code of 1986, or, only if the coverage is under a group health plan,
the coverage described in subparagraph (F)(ii), (F)(iii), (F)(iv), (G), or (H)
of such section, as qualified health insurance under that section.
(iii)To pay for outreach to eligible individuals
to inform such individuals of available health insurance and qualified health
insurance options, including outreach consisting of notice to eligible
individuals of such options made available after the date of enactment of this
clause and direct assistance to help potentially eligible individuals and such
individual’s qualifying family members qualify and remain eligible for the
credit established under section 35 of the Internal Revenue Code of 1986 and
advance payment of such credit under section 7527 of such Code.
(iv)To assist potentially
eligible individuals purchase qualified health insurance coverage prior to
issuance of a qualified health insurance costs credit eligibility certificate
under section 7527 of the Internal Revenue Code of 1986 and commencement of
advance payment, and receipt of expedited payment, under subsections (a) and
(e), respectively, of that section.
(C)The inclusion of
a permitted use under this paragraph shall not be construed as prohibiting a
similar use of funds permitted under subsection
(g).
;
and
(2)by striking paragraph (2) and inserting the
following new paragraph:
(2)Qualified
health insuranceFor purposes
of this subsection and subsection (g), the term qualified health
insurance has the meaning given that term in section 35(e) of the
Internal Revenue Code of
1986.
.
(b)Section 174(c)(1) of the Workforce
Investment Act of 1998 (29 U.S.C. 2919(c)(1)) is amended—
(1)in the paragraph heading, by striking
Authorization and
appropriation for fiscal year 2002
and inserting
Appropriations
; and
(2)by striking subparagraph (A) and inserting
the following new subparagraph:
(A)to carry out subsection (a)(4)(A) of
section 173—
(i)$10,000,000 for fiscal year 2002;
and
(ii)$300,000,000 for the period of fiscal years
2008 through 2010;
and
.
(c)Report
regarding failure To comply with requirements for expedited approval
proceduresSection 173(f) of
the Workforce Investment Act of 1998 (29 U.S.C. 2918(f)) is amended by adding
at the end the following new paragraph:
(8)Report for
failure to comply with requirements for expedited approval
proceduresIf the Secretary
fails to make the notification required under clause (i) of paragraph (3)(A)
within the 15-day period required under that clause, or fails to provide the
technical assistance required under clause (ii) of such paragraph within a
timely manner so that a State or entity may submit an approved application
within 2 months of the date on which the State or entity’s previous application
was disapproved, the Secretary shall submit a report to Congress explaining
such
failure.
.
(d)Effective as if
included in the enactment of the Trade Act of 2002 (Public Law 107–210; 116
Stat. 933), subsection (f) of section 203 of that Act is repealed.