[Congressional Record Volume 147, Number 132 (Thursday, October 4, 2001)]
[Senate]
[Pages S10296-S10297]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS (for himself, Mrs. Lincoln, Mr. Chafee, Mr. Bayh, 
        and Ms. Snowe):
  S. 1502. A bill to amend the internal Revenue Code of 1986 to allow a 
refundable tax credit for health insurance costs for COBRA continuation 
coverage, and for other purposes; to the Committee on Finance.
  Mr. JEFFORD. Mr. President, as President Bush said yesterday, 
regarding the need for an economic stimulus package: ``one person laid 
off is one person too many.'' I strongly agree. Today, I'm pleased to 
join with Senator Lincoln and my other colleagues in introducing the 
COBRA Plus Act of 2001. This legislation will help those who've lost 
their jobs in the aftermath of the terrorist acts of September 11 keep 
health insurance coverage for themselves and their families as they 
seek new employment.
  As we in Congress work with the administration to develop an economic 
stimulus package, it needs to reflect the three themes spelled out by 
Secretary O'Neill. The package must restore consumer confidence. For 
with the restoration of confidence, the American people will again 
begin buying our Nation's goods and services. We must also support 
increased business investment. Business investment is what creates new 
jobs and is the engine of our economy. And finally, and I think most 
importantly, we must help those individual Americans who lost their 
jobs as a consequence of the terrorist bombings of September 11.
  COBRA provides an existing mechanism to allow these laid-off workers 
the opportunity to keep their health insurance while they seek new 
employment. Under COBRA, an employer with 20 or more employees must 
provide those employees and their families the option of continuing 
their coverage under the employer's group health insurance plan in the 
case of losing their job. The employer is not required to pay for this 
coverage; instead, the individual can be required to pay up to 102 
percent of the premium.
  For all of its strengths, COBRA has some significant deficiencies. 
While it allows those who've lost their job to keep their health 
insurance coverage, it requires them to pay the entire premium at a 
time when they have no income. The high cost of COBRA is the major 
reason cited for the fact that only 18 percent of eligible enrollees 
utilize their coverage option. The COBRA Plus Act of 2001 solves this 
problem. It provides a 50-percent subsidy for the individual's health 
insurance premium, not to exceed a total of $110 per month for single 
coverage and $290 per month for family coverage. This subsidy would be 
a refundable tax credit, which means it is available regardless of 
one's tax liability, and the credit could be advanced directly on a 
monthly basis to the individual's employer or health insurance plan.
  The credit would be available for a period not to exceed 9 months and 
the credit must be used to purchase COBRA coverage. The credit would be 
available for 2 years beginning January 1, 2002 and it would sunset on 
December 31, 2003. While the Joint Committee on Taxation has not 
released a cost estimate, rough informal estimates are that the 
legislation will cost between $3.3 billion and $5 billion per year and 
it would more than double the number of individuals utilizing COBRA at 
any one time from the current level of $2.5 million to $6 million.
  Vermont's motto of ``Freedom and Unity'' captures the sense of 
individual responsibility and shared community that are the twin goals 
of the COBRA Plus Act of 2001. First, by giving unemployed workers 
access to additional financial resources, it will significantly 
increase the number of Americans who take advantage of COBRA's health 
insurance coverage option. And second, by relying on the tax code, the 
credit will go directly to individuals and eliminate the need to create 
a new Federal program.
  In my home State of Vermont, as is the case across the country, these 
recent events have put the security of a well-paid job with health 
insurance coverage at risk. It is important that we here in Congress 
help to restore confidence in the fundamental strength of our Nation's 
economy. Americans should know that they will still have productive 
jobs with health insurance coverage for their families now and into the 
future. I believe that the enactment of this legislation will be an 
important strand in strengthening the fabric of our society as we move 
forward in addressing the terrible acts of September 11.
  Mr. CHAFEE. Mr. President, I am pleased to join Senators Jeffords, 
Lincoln, Snowe, and Bayh today in introducing the COBRA Plus Act of 
2001.
  The COBRA Plus Act of 2001 will provide a tax credit to help offset 
the costs of COBRA health insurance for unemployed workers. This is 
particularly important due to the challenges that our economy faces and 
the number of individuals who have lost or will lose their jobs as a 
result of the terrorist attacks on September 11. Specifically, this 
bill will help unemployed individuals keep their health insurance 
coverage by subsidizing their COBRA premiums through an individual tax 
credit.
  According to the Congressional Research Service, it is estimated that 
4.7 million Americans are enrolled in

[[Page S10297]]

COBRA health plans at any given moment. With average annual COBRA 
insurance costing over $6,000, many individuals opt not to participate 
and therefore join the ranks of the 39 million uninsured in this 
country. A recent survey indicated that less than 20 percent of those 
eligible for COBRA insurance actually took advantage of the insurance. 
Without a premium subsidy such as the one offered in this bill, COBRA 
insurance is cost-prohibitive. The goal of this legislation is to 
decrease the number of uninsured individuals by providing an incentive 
to use COBRA insurance. This legislation will hopefully increase the 
number of COBRA users to at least six million.
  While I am deeply saddened by the events that led to the introduction 
of this bill, I am heartened that we are able to provide a way for 
individuals to retain their health insurance.
  I commend Senator Jeffords for his leadership on this issue, and am 
hopeful that it will get signed into law in the near future to assist 
our nation's displaced workers.
                                 ______