To provide for health care premium assistance; and to amend the Food Stamp Act of 1977 to exclude unemployment compensation for purposes of determining eligibility and benefits under such Act.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Care Continuation Coverage 
Act of 2002''.

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 the Treasury, in 
        consultation with 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 July 1, 2001, became 
                        entitled to elect COBRA continuation coverage; 
                        and
                            (ii) has elected such coverage; and
                    (B) enrolls in the premium assistance program under 
                this section by not later than the end of such 1-year 
                period.
    (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) 12 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 100 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 section 4980B(f)(6) of the Internal Revenue Code 
                of 1986 with respect to individuals who, on or after 
                July 1, 2001, 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 provision 
                under section 4980B(f)(6) of the Internal Revenue Code 
                of 1986 does not apply, the Secretary of the Treasury 
                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 100 
percent of your COBRA continuation coverage premiums for a duration of 
not to exceed 12 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 the Treasury (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 shall prescribe models 
        for the additional notification required under this subsection.
    (f) 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.
    (g) Prompt Issuance of Guidance.--The Secretary of the Treasury, in 
consultation with the Secretary of Labor, shall issue guidance under 
this section not later than 30 days after the date of the enactment of 
this Act.
    (h) Definitions.--In this section:
            (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. TEMPORARY MEDICAID COVERAGE FOR CERTAIN UNINSURED EMPLOYEES.

    (a) In General.--Notwithstanding any other provision of law, with 
respect to any month, as a condition for the receipt of Federal 
financial participation under title XIX of the Social Security Act, a 
State shall provide, under its medicaid program under such title, 
medical assistance in the case of an individual--
            (1) who has become totally or partially separated from 
        employment on or after July 1, 2001;
            (2) who is not eligible for COBRA continuation coverage; 
        and
            (3) who is uninsured;
and to the individual's spouse and dependents (as defined for purposes 
of the Internal Revenue Code of 1986) if they also are uninsured.
    (b) Limitation of Period 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) 12 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 the enhanced FMAP 
        (as defined in section 2105(b) of such Act);
            (2) a State may elect to apply alternative income, asset, 
        and resource limitations and the provisions of section 1916(g) 
        of such Act, except that in no case shall a State cover 
        individuals with higher family income without covering 
        individuals with a lower family income;
            (3) such medical assistance shall not be provided for 
        periods before the date the individual becomes uninsured;
            (4) 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;
            (5) a State may elect to provide such medical assistance 
        without regard to any limitation under sections 401(a), 402(b), 
        403, and 421 of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (8 U.S.C. 1611(a), 
        1612(b), 1613, and 1631) and no debt shall accrue under an 
        affidavit of support against any sponsor of an individual who 
        is an alien who is provided such assistance, and the cost of 
        such assistance shall not be considered as an unreimbursed 
        cost; and
            (6) the Secretary of Health and Human Services shall not 
        count, for purposes of section 1108(f)  of the Social Security 
Act, such amount of payments under this section as bears a reasonable 
relationship to the average national proportion of payments made under 
this section for the 50 States and the District of Columbia to the 
payments otherwise made under title XIX for such States and District.
    (d) Definitions.--For purposes of this subtitle:
            (1) Uninsured.--The term ``uninsured'' means, with respect 
        to an individual, that the individual is not covered under--
                    (A) a group health plan (as defined in section 
                2791(a) of the Public Health Service Act),
                    (B) health insurance coverage (as defined in 
                section 2791(b)(1) of the Public Health Service Act), 
                or
                    (C) a program under title XVIII, XIX, or XXI of the 
                Social Security Act, other than under such title XIX 
                pursuant to this section.
        For purposes of this paragraph, such coverage under 
        subparagraph (A) or (B) shall not include coverage consisting 
        solely of coverage of excepted benefits (as defined in section 
        2791(c) of the Public Health Service Act).
            (2) COBRA continuation coverage.--The term ``COBRA 
        continuation coverage'' means coverage under a group health 
        plan provided by an employer pursuant to title XXII of the 
        Public Health Service Act, section 4980B of the Internal 
        Revenue Code of 1986, part 6 of subtitle B of title I of the 
        Employee Retirement Income Security Act of 1974, or section 
        8905a of title 5, United States Code.
            (3) State.--The term ``State'' has the meaning given such 
        term for purposes of title XIX of the Social Security Act.
    (e) Effective Date.--This section shall take effect upon its 
enactment, whether or not regulations implementing this section are 
issued.

SEC. 4. TEMPORARY COVERAGE FOR UNSUBSIDIZED PORTION OF COBRA 
              CONTINUATION PREMIUMS.

    (a) In General.--Notwithstanding any other provision of law, with 
respect to COBRA continuation coverage provided for any month, as a 
condition of receipt of Federal financial participation under title XIX 
of the Social Security Act, a State shall provide payment of the 
unsubsidized portion of the premium for COBRA continuation coverage in 
the case of any individual--
            (1) who has become totally or partially separated from 
        employment on or after July 1, 2001; and
            (2) who is eligible for, and has elected coverage under, 
        COBRA continuation coverage;
and to the individual's spouse and dependents (as defined for purposes 
of the Internal Revenue Code of 1986) if they also are eligible for 
such coverage and are otherwise uninsured.
    (b) Limitation of Period of Coverage.--Premium assistance under 
this section 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) 12 months after the date the individual is first 
        determined to be eligible for premium assistance under this 
        section.
    (c) Financial Payment to States.--A State providing premium 
assistance under this section shall be entitled to payment under 
section 1903(a) of the Social Security Act with respect to such 
assistance (and administrative expenses relating to such assistance) in 
the same manner as such State is entitled to payment with respect to 
medical assistance (and such administrative expenses) under such 
section, except that, for purposes of this subsection, any reference to 
the Federal medical assistance percentage shall be deemed a reference 
to the enhanced FMAP (as defined in section 2105(b) of such Act). The 
provisions of subsections (c)(5) and (c)(6) of section 3 shall apply 
with respect to this section in the same manner as it applies under 
such section.
    (d) Unsubsidized Portion of Premium for COBRA Continuation 
Coverage.--For purposes of this section, the term `unsubsidized portion 
of premium for COBRA continuation coverage' means that portion of the 
premium for COBRA continuation coverage for which there is no financial 
assistance available under section 2.
    (e) Effective Date.--This section shall take effect upon its 
enactment, whether or not regulations implementing this section are 
issued.

SEC. 5. AMENDMENT TO THE FOOD STAMP ACT OF 1977.

    (a) Amendment.--Section 5(d) of the Food Stamp Act of 1977 (7 
U.S.C. 2014(d)) is amended--
            (1) by striking ``and (15)'' and inserting ``(15)'', and
            (2) by inserting before the period at the end the 
        following: ``, and (16) compensation under the State's 
        unemployment compensation law (including amounts payable 
        pursuant to an agreement under a Federal unemployment 
        compensation law)''.
    (b) Application of Amendment.--The amendment made by subsection (a) 
shall not apply with respect to certification periods that begin before 
the date of the enactment of this Act.

Summary: Health Care Continuation Coverage Act of 2002 - Directs the Secretary of the Treasury to establish a program to provide premium assistance for qualified individuals for Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) continuation coverage under the Public Health Service Act, the Internal Revenue Code, and the Employee Retirement Income Security Act of 1974 (ERISA). Requires States to provide temporary Medicaid coverage, under title XIX (Medicaid) of the Social Security Act, for individuals who: (1) have become totally or partially separated from employment on or after July 1, 2001, (2) are not eligible for COBRA continuation coverage. And (3) are not covered under a group health plan, health insurance, Medicare, or Medicaid. Includes coverage of such individuals' spouses and dependents who are also uninsured. Requires States, under Medicaid, to pay the unsubsidized portion of COBRA continuation benefits for individuals who: (1) have become totally or partially separated from employment on or after July 1, 2001. And (2) are eligible for COBRA continuation coverage. Includes coverage of such individuals' spouses and dependents who are also eligible and otherwise uninsured. Amends the Food Stamp Act of 1977 to exclude unemployment compensation in determining eligibility and benefits under such Act.