I 

108TH CONGRESS 

1ST SESSION H. R. 256

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. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 8, 2003

Mr. BOUCHER (for himself and Mr. GOODE) introduced the following bill; 

which was referred to the Committee on Education and the Workforce, 

and in addition to the Committees on Energy and Commerce and Ways 

and Means, for a period to be subsequently determined by the Speaker, 

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Health Care Coverage 

5 Assistance for the Unemployed Act of 2003’’. 
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1 SEC. 2. PREMIUM ASSISTANCE FOR COBRA CONTINUATION 

2 COVERAGE. 

3 (a) ESTABLISHMENT.—

4 (1) IN GENERAL.—Not later than 60 days after 

5 the date of enactment of this Act, the Secretary of 

6 Labor shall establish a program under which pre7 mium assistance for COBRA continuation coverage 

8 shall be provided for qualified individuals under this 

9 section. 

10 (2) QUALIFIED INDIVIDUALS.—For purposes of 

11 this section, a qualified individual is an individual 

12 who—

13 (A) establishes that the individual—

14 (i) on or after January 1, 2001, and 

15 before January 1, 2004, became entitled to 

16 elect COBRA continuation coverage (other 

17 than solely on the basis described in para18 graph (3), (4), (5), or (6) of section 603 

19 of the Employee Retirement Income Secu20 rity Act of 1974); and 

21 (ii) has elected such coverage; and 

22 (B) enrolls in the premium assistance pro23 gram under this section by not later than De24 cember 31, 2003. 

25 (b) LIMITATION OF PERIOD OF PREMIUM ASSIST26 ANCE.—Premium assistance provided under this sub-
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1 section shall end with respect to an individual on the ear2 lier of—

3 (1) the date the individual is no longer covered 

4 under COBRA continuation coverage; or 

5 (2) 18 months after the date the individual is 

6 first enrolled in the premium assistance program es7 tablished under this section. 

8 (c) PAYMENT, AND CREDITING OF ASSISTANCE.—

9 (1) AMOUNT OF ASSISTANCE.—Premium assist10 ance provided under this section shall be equal to 75 

11 percent of the amount of the premium required for 

12 the COBRA continuation coverage. 

13 (2) PROVISION OF ASSISTANCE.—Premium as14 sistance provided under this section shall be pro15 vided through the establishment of direct payment 

16 arrangements with the administrator of the group 

17 health plan (or other entity) that provides or admin18 isters the COBRA continuation coverage. It shall be 

19 a fiduciary duty of such administrator (or other en20 tity) to enter into such arrangements under this sec21 tion. 

22 (3) PREMIUMS PAYABLE BY QUALIFIED INDI23 VIDUAL REDUCED BY AMOUNT OF ASSISTANCE.—

24 Premium assistance provided under this section shall 

25 be credited by such administrator (or other entity) 
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1 against the premium otherwise owed by the indi2 vidual involved for such coverage. 

3 (d) CHANGE IN COBRA NOTICE.—

4 (1) GENERAL NOTICE.—

5 (A) IN GENERAL.—In the case of notices 

6 provided under sections 606 of the Employee 

7 Retirement Income Security Act of 1974, sec8 tion 2206 of the Public Health Service Act, and 

9 section 4980B(f)(6) of the Internal Revenue 

10 Code of 1986 with respect to individuals who, 

11 on or after January 1, 2001, and before Janu12 ary 1, 2004, become entitled to elect COBRA 

13 continuation coverage, such notices shall include 

14 an additional notification to the recipient of the 

15 availability of premium assistance for such cov16 erage under this section. 

17 (B) ALTERNATIVE NOTICE.—In the case of 

18 COBRA continuation coverage to which the no19 tice provisions described in subparagraph (A) 

20 do not apply, the Secretary of Labor shall, in 

21 coordination with administrators of the group 

22 health plans (or other entities) that provide or 

23 administer the COBRA continuation coverage 

24 involved, assure provision of such notice.
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1 (C) FORM.—The requirement of the addi2 tional notification under this paragraph may be 

3 met by amendment of existing notice forms or 

4 by inclusion of a separate document with the 

5 notice otherwise required. 

6 (2) SPECIFIC REQUIREMENTS.—Each additional 

7 notification under paragraph (1) shall include—

8 (A) the forms necessary for establishing 

9 eligibility under subsection (a)(2)(A) and enroll10 ment under subsection (a)(2)(B) in connection 

11 with the coverage with respect to each covered 

12 employee or other qualified beneficiary; 

13 (B) the name, address, and telephone num14 ber necessary to contact the plan administrator 

15 and any other person maintaining relevant in16 formation in connection with the premium as17 sistance; and 

18 (C) the following statement displayed in a 

19 prominent manner: 

20 ‘‘You may be eligible to receive assistance with pay21 ment of 75 percent of your COBRA continuation coverage 

22 premiums for a duration of not to exceed 18 months.’’. 

23 (3) NOTICE RELATING TO RETROACTIVE COV24 ERAGE.—In the case of such notices previously 

25 transmitted before the date of the enactment of this 
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1 Act in the case of an individual described in para2 graph (1) who has elected (or is still eligible to elect) 

3 COBRA continuation coverage as of the date of the 

4 enactment of this Act, the administrator of the 

5 group health plan (or other entity) involved or the 

6 Secretary of Labor (in the case described in the 

7 paragraph (1)(B)) shall provide (within 60 days 

8 after the date of the enactment of this Act) for the 

9 additional notification required to be provided under 

10 paragraph (1). 

11 (4) MODEL NOTICES.—The Secretary of Labor 

12 shall prescribe models for the additional notification 

13 required under this subsection. 

14 (e) OBLIGATION OF FUNDS.—This section con15 stitutes budget authority in advance of appropriations 

16 Acts and represents the obligation of the Federal Govern17 ment to provide for the payment of premium assistance 

18 under this section. 

19 (f) PROMPT ISSUANCE OF GUIDANCE.—The Sec20 retary of Labor shall issue guidance under this section not 

21 later than 30 days after the date of the enactment of this 

22 Act. 

23 (g) DEFINITIONS.—In this Act: 

24 (1) ADMINISTRATOR.—The term ‘‘adminis25 trator’’ has the meaning given such term in section 
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1 3(16) of the Employee Retirement Income Security 

2 Act of 1974. 

3 (2) COBRA CONTINUATION COVERAGE.—The 

4 term ‘‘COBRA continuation coverage’’ means con5 tinuation coverage provided pursuant to title XXII 

6 of the Public Health Service Act, section 4980B of 

7 the Internal Revenue Code of 1986 (other than sub8 section (f)(1) of such section insofar as it relates to 

9 pediatric vaccines), part 6 of subtitle B of title I of 

10 the Employee Retirement Income Security Act of 

11 1974 (other than under section 609), section 8905a 

12 of title 5, United States Code, or under a State pro13 gram that provides continuation coverage com14 parable to such continuation coverage. 

15 (3) GROUP HEALTH PLAN.—The term ‘‘group 

16 health plan’’ has the meaning given such term in 

17 section 9832(a) of the Internal Revenue Code of 

18 1986. 

19 (4) STATE.—The term ‘‘State’’ includes the 

20 District of Columbia, the Commonwealth of Puerto 

21 Rico, the Virgin Islands, Guam, American Samoa, 

22 and the Commonwealth of the Northern Mariana Is23 lands. 
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1 SEC. 3. OPTIONAL TEMPORARY MEDICAID COVERAGE FOR 

2 UNINSURED ELIGIBLE EMPLOYEES. 

3 (a) IN GENERAL.—Notwithstanding any other provi4 sion of law, a State may elect to provide, under its med5 icaid program under title XIX of the Social Security Act, 

6 medical assistance in the case of an individual who is eligi7 ble for unemployment benefits, who is not eligible for 

8 COBRA continuation coverage, and who is uninsured. For 

9 purposes of this section, an individual is considered to be 

10 uninsured if the individual is not covered under a group 

11 health plan, health insurance coverage, or under such pro12 gram or a program under title XVIII or XXI of such Act. 

13 (b) LIMITATION TO 18 MONTHS OF COVERAGE.—As14 sistance under this section shall end with respect to an 

15 individual on the earlier of—

16 (1) the date the individual is no longer unin17 sured; or 

18 (2) 18 months after the date the individual is 

19 first determined to be eligible for medical assistance 

20 under this section. 

21 (c) SPECIAL RULES.—In the case of medical assist22 ance provided under this section—

23 (1) the Federal medical assistance percentage 

24 under section 1905(b) of the Social Security Act 

25 shall be 100 percent; 
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1 (2) a State may elect to disregard any income, 

2 asset, or resource limitation imposed under the State 

3 medicaid plan or under title XIX of such Act, ex4 cept, notwithstanding any other provision of law, a 

5 State shall condition eligibility for assistance under 

6 this section upon the payment of a monthly premium 

7 approximating 25 percent of the average cost of pro8 viding the assistance under this section; 

9 (3) such medical assistance shall not be pro10 vided for periods before the date the individual is de11 termined eligible for such assistance; 

12 (4) a State may elect to make eligible for such 

13 assistance a dependent spouse or children of an indi14 vidual eligible for medical assistance under sub15 section (a), if such spouse or children are uninsured; 

16 and 

17 (5) individuals eligible for medical assistance 

18 under this section shall be deemed to be described 

19 in the list of individuals described in the matter pre20 ceding paragraph (1) of section 1905(a) of such Act.

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