I 

108TH CONGRESS 

1ST SESSION H. R. 2891

To make COBRA continuing coverage more affordable for laid-off American 

workers. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 24, 2003

Mr. SCHIFF (for himself, Mr. ANDREWS, Mr. HINCHEY, Mr. GEORGE MILLER

of California, Ms. JACKSON-LEE of Texas, Mr. WEINER, Mr. KILDEE, 

Mr. MCNULTY, Ms. CARSON of Indiana, Mr. BRADY of Pennsylvania, Mr. 

FROST, Mr. WEXLER, Mr. OWENS, Mr. ACKERMAN, Ms. WOOLSEY, Mr. 

ABERCROMBIE, Mr. FRANK of Massachusetts, Mr. PAYNE, Mr. 

GRIJALVA, Mrs. JONES of Ohio, and Mr. VAN HOLLEN) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL

To make COBRA continuing coverage more affordable for 

laid-off American workers.

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 ‘‘COBRA Coverage Act 

5 of 2003’’.
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1 SEC. 2. CREDIT FOR EMPLOYER-PROVIDED COBRA COV2 ERAGE. 

3 (a) IN GENERAL.—Subpart D of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 (relating to business-related credits) is amended by 

6 adding at the end the following new section: 

7 ‘‘SEC. 45G. EMPLOYER-PROVIDED COBRA COVERAGE. 

8 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

9 employer-provided COBRA coverage credit determined 

10 under this section for the taxable year is an amount equal 

11 to the COBRA premiums paid or incurred by the taxpayer 

12 for continuation coverage during the taxable year of any 

13 individual who is a qualified beneficiary by reason of—

14 ‘‘(1) being a covered employee with respect to 

15 the taxpayer, or 

16 ‘‘(2) bearing a relationship to such a covered 

17 employee. 

18 ‘‘(b) DOLLAR LIMITATION.—The credit determined 

19 under subsection (a) for coverage for any month with re20 spect to each qualified beneficiary shall not exceed which21 ever of the following is the least: 

22 ‘‘(1) 50 percent of the COBRA premium for 

23 continuation coverage for such month. 

24 ‘‘(2) $110 in the case of self-only coverage and 

25 $290 in the case of family coverage for such month. 
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1 ‘‘(c) COBRA PREMIUMS.—For purposes of this sec2 tion, the term ‘COBRA premiums’ means, with respect to 

3 any period of continuation coverage for a qualified bene4 ficiary, the cost of such coverage for such period to the 

5 extent such cost does not exceed the maximum amount 

6 which (without regard to this section) may be required 

7 under section 4980B(f)(2)(C) to be paid for such coverage 

8 for such beneficiary. 

9 ‘‘(d) OTHER DEFINITIONS.—Terms used in this sec10 tion which are also used in section 4980B shall have the 

11 respective meanings given such terms by section 4980B.’’

12 (b) DENIAL OF DOUBLE BENEFIT.—Section 280C of 

13 such Code (relating to certain expenses for which credits 

14 are allowable) is amended by adding at the end the fol15 lowing new subsection: 

16 ‘‘(d) CREDIT FOR EMPLOYER-PROVIDED COBRA 

17 COVERAGE.—No deduction shall be allowed for that por18 tion of the COBRA premiums (as defined in section 

19 45G(c)) otherwise allowable as a deduction for the taxable 

20 year which is equal to the amount of the credit allowable 

21 for the taxable year under section 45G (determined with22 out regard to section 38(c)).’’

23 (c) CONFORMING AMENDMENTS.—

24 (1) Subsection (b) of section 38 of such Code 

25 is amended by striking ‘‘plus’’ at the end of para-
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1 graph (14), by striking the period at the end of 

2 paragraph (15) and inserting ‘‘, plus’’, and by add3 ing at the end the following: 

4 ‘‘(16) the employer-provided COBRA coverage 

5 credit determined under section 45G.’’. 

6 (2) The table of sections for subpart D of part 

7 IV of subchapter A of chapter 1 of such Code is 

8 amended by adding at the end the following new 

9 item:

‘‘Sec. 45G. Employer-provided COBRA coverage.’’.

10 (d) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to taxable years beginning after 

12 the date of the enactment of this Act.

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