[Congressional Record Volume 153, Number 106 (Thursday, June 28, 2007)]
[Senate]
[Pages S8709-S8713]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROCKEFELLER (for himself and Mr. Brown):
  S. 1739. A bill to amend section 35 of the Internal Revenue Code of 
1986 to improve the health coverage tax credit, and for other purposes; 
to the Committee on Finance.
  Mr. ROCKEFELLER. Mr. President, last month, the Government 
Accountability Office, GAO, released yet another report about the Trade 
Adjustment Assistance, TAA, health coverage tax credit, HCTC. The 
report confirms what many in Congress have been saying since the HCTC 
program began, the credit is not enough, the program has several 
barriers to enrollment, the premiums are prohibitively high for some 
workers because of medical underwriting, and the program is very 
confusing and expensive to administer. Although the GAO reported a $19 
million decrease in costs of administration between 2003 and the end of 
fiscal year 2006, administrative costs still make up approximately 34 
percent of the total spending for the HCTC.
  The Trade Adjustment Assistance Act is up for reauthorization this 
year. It is long past time for Congress to focus on the problems with 
the TAA health coverage tax credit and reauthorization presents us with 
that opportunity. That is why I am introducing legislation today that 
will make much-needed improvements to the HCTC program. And, I am proud 
that the distinguished Senator from Ohio, Mr. Brown, is joining me in 
introducing this important bill. The TAA Health Coverage Improvement 
Act of 2007 offers solutions to many of the problems with the HCTC 
identified by the GAO. This legislation will go a long way to make the 
TAA health care tax credit a realistic option for displaced workers and 
their families.
  When Congress passed the Trade Act of 2002, we made a promise to 
American workers that the potential loss of jobs will not equal the 
loss of health care coverage. Unfortunately, Congress has failed to 
make good on that promise. Since we passed this bill, I have heard from 
steel retirees and widows in my State about how unaffordable the TAA 
health care tax credit is. And I have been very frustrated, just as I 
was when this bill passed, that we were not able to make the credit 
more affordable and accessible for people who need it the most--laid-
off workers and retirees with very limited income. We can fix these 
problems by including provisions from the TAA Health Coverage 
Improvement Act in the TAA reauthorization bill.
  For a good number of supporters of the Trade Act of 2002, the health 
insurance tax credit was the single most important factor in overcoming 
their concerns about giving the President fast-track authority to move 
trade agreements through Congress. In my own judgment, the fast-track 
would not have passed Congress without the health care tax credit. The 
TAA health credit was the trade-off to balance the President's 
authority.
  Yet, the success many of us envisioned for the health care tax credit 
has not been realized through implementation. The number of people who 
have been able to access the health care tax credit over the last 2 
years is extremely disappointing. As of January 31, 2007, only 15,506 
out of 252,280 who are eligible for the credit are enrolled

[[Page S8710]]

in the program. That is just over 6 percent, which means that almost 94 
percent of those eligible are not participating.
  In my home State of West Virginia, we have worked hard to promote the 
HCTC for trade-displaced workers. When Weirton Steel instituted 
significant layoffs, thousands of employees lost their jobs. In the 
aftermath, State and national officials, health plan staff, and 
representatives of the Independent Steelworkers Union and United Steel 
Workers worked collaboratively to provide continuous health care 
coverage for HCTC-eligible workers and retirees. The community really 
came together and worked around the clock to educate workers and 
retirees about their coverage options and to ensure they were enrolled 
in the HCTC.

  Loss of employment is absolutely devastating to workers and their 
families. While health care coverage alone cannot replace job loss, it 
does help to ease the burden on displaced workers and their dependents. 
West Virginia is a model example of how HCTC can work. However, with 
only 6 percent of those eligible for HCTC enrolled across the country, 
there is still much more that needs to be done.
  I must say to my colleagues that Congress has had a hand in these 
disappointing enrollment figures. We have ignored every opportunity to 
improve the health coverage tax credit and enhance the lives of workers 
displaced by trade. Members of this body have previously voted against 
TAA bills that would have extended Trade Adjustment Assistance to 
service workers and also addressed some of the problems the GAO has 
identified with the health coverage credit.
  The TAA Health Coverage Improvement Act makes long overdue 
improvements to the TAA health care tax credit. First, this legislation 
addresses the issue of affordability. In addition to the GAO, several 
consumer advocacy groups and research organizations, including the 
Commonwealth Fund, the Center on Budget and Policy Priorities, and 
Families USA, have cited affordability of the credit as the primary 
reason for low participation in the HCTC program. The bottom line is 
that a 65 percent subsidy is not enough. With a 65 percent credit, an 
eligible individual still has to pay an average of $2,104 in annual 
premium costs for single coverage plus additional amounts for 
deductibles and co-payments. This figure is particularly astounding 
given the fact that the average worker, while actively employed and 
earning a paycheck, paid just $627 annually in 2006 for single 
employer-sponsored health insurance coverage. In other words, if you 
lose your job, you have to pay more than three times as much for health 
insurance, even if you get the HCTC. The TAA Health Coverage 
Improvement Act makes the credit more affordable by increasing the 
subsidy amount to 95 percent.
  This legislation also addresses the issue of affordability by placing 
limits on the use of the individual market, as Congress intended under 
the original law. The Trade Act of 2002 specified that the health 
insurance credit could not be used for the purchase of health insurance 
coverage in the individual market except for HCTC-eligible workers who 
previously had a private, non-group coverage policy 30 days prior to 
separation from employment. However, States have been allowed by this 
Administration to create State-based coverage options in the individual 
market for any HCTC beneficiaries, including those who did not have 
individual market coverage one month prior to separation from 
employment.
  Because of the Administration's interpretation of the law, there are 
people who had employer-based coverage prior to separation from 
employment who are now being covered in the individual market. This was 
not the intent of the law. To make matters worse, this interpretation 
undermines the consumer protections set forth in the law because 
individual market plans are allowed to vary premiums based on age and 
medical status. In one state that GAG reviewed for a previous report, 
because of medical underwriting, HCTC recipients in less-than-perfect 
health were charged almost 6 times the premiums charged to recipients 
rated in the healthiest category. The legislation I am introducing 
today addresses this problem by clarifying that States can only 
designate individual market coverage within guidelines of 30-day 
restriction and by requiring individual market plans to be community-
rated.
  Second, this legislation guarantees that eligible workers will have 
access to comprehensive group health coverage. Group coverage is what 
people know. The vast majority of laid-off workers and PBGC retirees 
had employer-sponsored group coverage prior to losing their jobs or 
pension benefits. The TAA Health Coverage Improvement Act designates 
the Federal Employees Health Benefit Plan, FEHBP, as a qualified group 
option in every State, so that displaced workers Nationwide will have 
access to the same type of affordable, comprehensive coverage they were 
used to when they were employed.
  Third, the TAA Health Coverage Act clarifies the 3 month continuous 
coverage requirement. Under the original TAA statute, displaced workers 
are required to maintain 3 months of continuous health insurance 
coverage in order to qualify for certain consumer protections. Those 
protections are guaranteed issue, no preexisting condition exclusion, 
comparable premiums, and comparable benefits. Congress intended this 3 
month period to be counted as the 3 months prior to separation from 
employment. However, the administration has interpreted the 3 month 
requirement as 3 months of health insurance coverage prior to 
enrollment in the new health plan, which usually is after separation 
from employment and after certification of TAA eligibility. Many laid-
off workers and PBGC recipients cannot afford to maintain health 
coverage in the months between losing their jobs and TAA certification 
and, therefore, lose eligibility for the statutorily-provided consumer 
protections. This legislation corrects this problem by clarifying that 
three months of continuous coverage means 3 months prior to separation 
from employment.
  Fourth, this bill allows spouses and dependents to receive the health 
coverage tax credit. Over the last 2 years, younger spouses and 
dependents of Medicare-eligible individuals have not been able to 
receive the subsidy because eligibility runs through the worker or 
retiree. This technicality is unfair to individuals who rely on health 
coverage through their spouses or parents. The TAA Health Coverage 
Improvement Act allows younger spouses and dependent children to retain 
eligibility for the health coverage tax credit in the event the 
qualified beneficiary becomes eligible for Medicare.
  Finally, this legislation streamlines the HCTC enrollment process and 
makes it easier for trade-displaced workers to access health insurance 
coverage. According to GAO, two of the factors contributing to low 
participation include the complex nature of the HCTC program and the 
inability of workers to pay 100 percent of the premium during the up to 
3 months before they begin to receive advance payments. The TAA Health 
Coverage Improvement Act improves consumer information about the HCTC 
by requiring that the Treasury Secretary's eligibility notice include a 
description of the HCTC program; specific contact information for state 
offices responsible for determining eligibility and providing 
enrollment assistance; a list of the HCTC coverage options in the sate; 
and a statement informing eligible individuals of the deadline to 
enroll in HCTC in order to avoid lapses in coverage. Additionally, our 
legislation includes a presumptive eligibility provision that allows 
displaced workers to enroll in a qualified health plan and receive the 
HCTC immediately upon application to the Department of Labor for 
certification. There is also a provision which directs the Treasury 
Secretary to pay 100 percent of the cost of premiums directly to the 
health plans during the months TAA-eligible workers are waiting for 
advance payment to begin.
  As a former Governor, I know how important Trade Adjustment 
Assistance is to individuals who have lost their jobs due to trade. In 
West Virginia, thousands of workers have lost their jobs as a result of 
trade policy. While adjusting to the loss of employment, these 
individuals still have to pay mortgages, put food on the table, and 
care for their families. Finding affordable health care adds a 
significant burden to their worries. The TAA health coverage tax credit 
is designed

[[Page S8711]]

to help American workers retain health insurance coverage during this 
very difficult transition.
  Unfortunately, the HCTC program is not living up to its potential. 
The Government Accountability Office has given us a very specific 
diagnosis of the problems. Now, it is up to us to fix them. I look 
forward to working with my colleagues to pass this important 
legislation in conjunction with reauthorization of the Trade Adjustment 
Assistance program.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was printed in the 
Record, as follows:

                                 S. 1739

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``TAA Health 
     Coverage Improvement Act of 2007''.
       (b) Table of Contents.--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.

     SEC. 2. IMPROVEMENT OF THE AFFORDABILITY OF THE CREDIT.

       (a) Improvement of Affordability.--
       (1) In general.--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) Conforming amendment.--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) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 2007.

     SEC. 3. 100 PERCENT CREDIT AND PAYMENT FOR MONTHLY PREMIUMS 
                   PAID PRIOR TO CERTIFICATION OF ELIGIBILITY FOR 
                   THE CREDIT.

       (a) In General.--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 general.--In case''; and
       (2) by adding at the end the following new paragraph:
       ``(2) 100 percent credit for months prior to issuance of 
     eligibility certificate.--The 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 Credit.--Section 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 
     Certificate.--The 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) Effective Date.--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.

     SEC. 4. ELIGIBILITY FOR CERTAIN PENSION PLAN RECIPIENTS; 
                   PRESUMPTIVE ELIGIBILITY.

       (a) Eligibility for Certain Pension Plan Recipients.--
     Subsection (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 recipient.--The 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 Assistance.--Subsection (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 recipient.--The 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) Conforming Amendments.--
       (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 Plan.--The 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) Effective Date.--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.

     SEC. 5. CLARIFICATION OF 3-MONTH CREDITABLE COVERAGE 
                   REQUIREMENT.

       (a) In General.--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) Conforming Amendment.--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) Effective Date.--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.

     SEC. 6. TAA PRE-CERTIFICATION PERIOD RULE FOR PURPOSES OF 
                   DETERMINING WHETHER THERE IS A 63-DAY LAPSE IN 
                   CREDITABLE COVERAGE.

       (a) ERISA Amendment.--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) TAA-eligible individuals.--
       ``(i) TAA pre-certification period rule.--In 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).

[[Page S8712]]

       ``(ii) Definitions.--The terms `TAA-eligible individual', 
     and `TAA-related loss of coverage' have the meanings given 
     such terms in section 605(b)(4)(C).''.
       (b) PHSA Amendment.--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) TAA-eligible individuals.--
       ``(i) TAA pre-certification period rule.--In 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) Definitions.--The terms `TAA-eligible individual', 
     and `TAA-related loss of coverage' have the meanings given 
     such terms in section 2205(b)(4)(C).''.
       (c) IRC Amendment.--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) TAA-eligible individuals.--
       ``(i) TAA pre-certification period rule.--In 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) Definitions.--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) Effective Date.--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.

     SEC. 7. CONTINUED QUALIFICATION OF FAMILY MEMBERS AFTER 
                   CERTAIN EVENTS.

       (a) In General.--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 eligible.--In 
     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) Divorce.--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) Death.--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) Conforming Amendment.--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 eligible.--In 
     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) Divorce.--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) Death.--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) Effective Date.--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.

     SEC. 8. OFFERING OF FEDERAL GROUP COVERAGE.

       (a) Provision of Group Coverage.--
       (1) In general.--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) Terms and conditions.--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) Study.--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) FEHBP defined.--In this section, the term ``FEHBP'' 
     means the Federal Employees Health Benefits Program offered 
     under chapter 89 of title 5, United States Code.
       (b) Conforming Amendments.--
       (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.''.

     SEC. 9. ADDITIONAL REQUIREMENTS FOR INDIVIDUAL HEALTH 
                   INSURANCE COSTS.

       (a) In General.--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 Requirement.--Subparagraph (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 Option.--Section 
     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) Conforming Amendments.--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)''.

     SEC. 10. ALIGNMENT OF COBRA COVERAGE WITH TAA PERIOD FOR TAA-
                   ELIGIBLE INDIVIDUALS.

       (a) ERISA.--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 1986.--Section 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 Act.--Section 2205(b) of the 
     Public Health Service Act (42 U.S.C. 300bb-5(b)) is amended--

[[Page S8713]]

       (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.

     SEC. 11. NOTICE REQUIREMENTS.

       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 Information.--The 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)).''.

     SEC. 12. ANNUAL REPORT ON ENHANCED TAA BENEFITS.

       Not 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.

     SEC. 13. EXTENSION OF NATIONAL EMERGENCY GRANTS.

       (a) In General.--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) Use of funds.--
       ``(A) Health insurance coverage for eligible individuals in 
     order to obtain qualified health insurance that has 
     guaranteed issue and other consumer protections.--Funds 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) Additional uses.--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 coverage.--To 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 insurance.--To 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) Outreach.--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) Bridge funding.--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) Rule of construction.--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 insurance.--For 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) Funding.--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 Procedures.--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 new paragraph:
       ``(8) Report for failure to comply with requirements for 
     expedited approval procedures.--If 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) Technical Amendment.--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.
                                 ______