To provide for premium assistance for COBRA continuation coverage for certain individuals and to permit States to provide temporary Medicaid coverage for certain uninsured employees.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Care Coverage Assistance for 
the Unemployed Act of 2001''.

SEC. 2. PREMIUM ASSISTANCE FOR COBRA CONTINUATION COVERAGE.

    (a) Establishment.--
            (1) In general.--Not later than 60 days after the date of 
        enactment of this Act, the Secretary of Labor shall establish a 
        program under which premium assistance for COBRA continuation 
        coverage shall be provided for qualified individuals under this 
        section.
            (2) Qualified individuals.--For purposes of this section, a 
        qualified individual is an individual who--
                    (A) establishes that the individual--
                            (i) on or after January 1, 2001, and before 
                        January 1, 2003, became entitled to elect COBRA 
                        continuation coverage (other than solely on the 
                        basis described in paragraph (3), (4), (5), or 
                        (6) of section 603 of the Employee Retirement 
                        Income Security Act of 1974); and
                            (ii) has elected such coverage; and
                    (B) enrolls in the premium assistance program under 
                this section by not later than December 31, 2002.
    (b) Limitation of Period of Premium Assistance.--Premium assistance 
provided under this subsection shall end with respect to an individual 
on the earlier of--
            (1) the date the individual is no longer covered under 
        COBRA continuation coverage; or
            (2) 18 months after the date the individual is first 
        enrolled in the premium assistance program established under 
        this section.
    (c) Payment, and Crediting of Assistance.--
            (1) Amount of assistance.--Premium assistance provided 
        under this section shall be equal to 75 percent of the amount 
        of the premium required for the COBRA continuation coverage.
            (2) Provision of assistance.--Premium assistance provided 
        under this section shall be provided through the establishment 
        of direct payment arrangements with the administrator of the 
        group health plan (or other entity) that provides or 
        administers the COBRA continuation coverage. It shall be a 
        fiduciary duty of such administrator (or other entity) to enter 
        into such arrangements under this section.
            (3) Premiums payable by qualified individual reduced by 
        amount of assistance.--Premium assistance provided under this 
        section shall be credited by such administrator (or other 
        entity) against the premium otherwise owed by the individual 
        involved for such coverage.
    (d) Change in COBRA Notice.--
            (1) General notice.--
                    (A) In general.--In the case of notices provided 
                under sections 606 of the Employee Retirement Income 
                Security Act of 1974, section 2206 of the Public Health 
                Service Act, and section 4980B(f)(6) of the Internal 
                Revenue Code of 1986 with respect to individuals who, 
                on or after January 1, 2001, and before January 1, 
                2003, become entitled to elect COBRA continuation 
                coverage, such notices shall include an additional 
                notification to the recipient of the availability of 
                premium assistance for such coverage under this 
                section.
                    (B) Alternative notice.--In the case of COBRA 
                continuation coverage to which the notice provisions 
                described in subparagraph (A) do not apply, the 
                Secretary of Labor shall, in coordination with 
                administrators of the group health plans (or other 
                entities) that provide or administer the COBRA 
                continuation coverage involved, assure provision of 
                such notice.
                    (C) Form.--The requirement of the additional 
                notification under this paragraph may be met by 
                amendment of existing notice forms or by inclusion of a 
                separate document with the notice otherwise required.
            (2) Specific requirements.--Each additional notification 
        under paragraph (1) shall include--
                    (A) the forms necessary for establishing 
                eligibility under subsection (a)(2)(A) and enrollment 
                under subsection (a)(2)(B) in connection with the 
                coverage with respect to each covered employee or other 
                qualified beneficiary;
                    (B) the name, address, and telephone number 
                necessary to contact the plan administrator and any 
                other person maintaining relevant information in 
                connection with the premium assistance; and
                    (C) the following statement displayed in a 
                prominent manner:
    ``You may be eligible to receive assistance with payment of 75 
percent of your COBRA continuation coverage premiums for a duration of 
not to exceed 18 months.''.
            (3) Notice relating to retroactive coverage.--In the case 
        of such notices previously transmitted before the date of the 
        enactment of this Act in the case of an individual described in 
        paragraph (1) who has elected (or is still eligible to elect) 
        COBRA continuation coverage as of the date of the enactment of 
        this Act, the administrator of the group health plan (or other 
        entity) involved or the Secretary of Labor (in the case 
        described in the paragraph (1)(B)) shall provide (within 60 
        days after the date of the enactment of this Act) for the 
        additional notification required to be provided under paragraph 
        (1).
            (4) Model notices.--The Secretary of Labor shall prescribe 
        models for the additional notification required under this 
        subsection.
    (e) Obligation of Funds.--This section constitutes budget authority 
in advance of appropriations Acts and represents the obligation of the 
Federal Government to provide for the payment of premium assistance 
under this section.
    (f) Prompt Issuance of Guidance.--The Secretary of Labor shall 
issue guidance under this section not later than 30 days after the date 
of the enactment of this Act.
    (g) Definitions.--In this Act:
            (1) Administrator.--The term ``administrator'' has the 
        meaning given such term in section 3(16) of the Employee 
        Retirement Income Security Act of 1974.
            (2) COBRA continuation coverage.--The term ``COBRA 
        continuation coverage'' means continuation coverage provided 
        pursuant to title XXII of the Public Health Service Act, 
        section 4980B of the Internal Revenue Code of 1986 (other than 
        subsection (f)(1) of such section insofar as it relates to 
        pediatric vaccines), part 6 of subtitle B of title I of the 
        Employee Retirement Income Security Act of 1974 (other than 
        under section 609), section 8905a of title 5, United States 
        Code, or under a State program that provides continuation 
        coverage comparable to such continuation coverage.
            (3) Group health plan.--The term ``group health plan'' has 
        the meaning given such term in section 9832(a) of the Internal 
        Revenue Code of 1986.
            (4) State.--The term ``State'' includes the District of 
        Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, 
        Guam, American Samoa, and the Commonwealth of the Northern 
        Mariana Islands.

SEC. 3. OPTIONAL TEMPORARY MEDICAID COVERAGE FOR UNINSURED ELIGIBLE 
              EMPLOYEES.

    (a) In General.--Notwithstanding any other provision of law, a 
State may elect to provide, under its medicaid program under title XIX 
of the Social Security Act, medical assistance in the case of an 
individual who is eligible for unemployment benefits, who is not 
eligible for COBRA continuation coverage, and who is uninsured. For 
purposes of this section, an individual is considered to be uninsured 
if the individual is not covered under a group health plan, health 
insurance coverage, or under such program or a program under title 
XVIII or XXI of such Act.
    (b) Limitation to 18 Months of Coverage.--Assistance under this 
section shall end with respect to an individual on the earlier of--
            (1) the date the individual is no longer uninsured; or
            (2) 18 months after the date the individual is first 
        determined to be eligible for medical assistance under this 
        section.
    (c) Special Rules.--In the case of medical assistance provided 
under this section--
            (1) the Federal medical assistance percentage under section 
        1905(b) of the Social Security Act shall be 100 percent;
            (2) a State may elect to disregard any income, asset, or 
        resource limitation imposed under the State medicaid plan or 
        under title XIX of such Act, except, notwithstanding any other 
        provision of law, a State shall condition eligibility for 
        assistance under this section upon the payment of a monthly 
        premium approximating 25 percent of the average cost of 
        providing the assistance under this section;
            (3) such medical assistance shall not be provided for 
        periods before the date the individual is determined eligible 
        for such assistance;
            (4) a State may elect to make eligible for such assistance 
        a dependent spouse or children of an individual eligible for 
        medical assistance under subsection (a), if such spouse or 
        children are uninsured; and
            (5) individuals eligible for medical assistance under this 
        section shall be deemed to be described in the list of 
        individuals described in the matter preceding paragraph (1) of 
        section 1905(a) of such Act.

Summary: Health Care Coverage Assistance for the Unemployed Act of 2001 - Directs the Secretary of Labor to establish an emergency health coverage assistance program to provide premium assistance for qualified individuals for Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) continuation coverage under the Employee Retirement Income Security Act of 1974 (ERISA). Allows a State to elect to provide temporary Medicaid coverage for individuals who are: (1) eligible for unemployment benefits, (2) not eligible for COBRA continuation coverage. And (3) not covered under a group health plan, health insurance, Medicare, or Medicaid.