I
107TH CONGRESS
1ST SESSION
H. R. 3040
To make COBRA continuing coverage more affordable for laid-off American
workers.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 4, 2001
Mr. SCHIFF (for himself, Mr. HINCHEY, and Mr. FROST) 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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘COBRA Coverage Act
of 2001’’.
SEC. 2. CREDIT FOR EMPLOYER-PROVIDED COBRA COV-
ERAGE.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business-related credits) is amended by
adding at the end the following new section:
‘‘SEC. 45G. EMPLOYER-PROVIDED COBRA COVERAGE.
‘‘(a) IN GENERAL.—For purposes of section 38, the
employer-provided COBRA coverage credit determined
under this section for the taxable year is an amount equal
to the COBRA premiums paid or incurred by the taxpayer
for continuation coverage during the taxable year of any
individual who is a qualified beneficiary by reason of—
‘‘(1) being a covered employee with respect to
the taxpayer, or
‘‘(2) bearing a relationship to such a covered
employee.
‘‘(b) DOLLAR LIMITATION.—The credit determined
under subsection (a) for coverage for any month with re-
spect to each qualified beneficiary shall not exceed which-
ever of the following is the least:
‘‘(1) 50 percent of the COBRA premium for
continuation coverage for such month.
‘‘(2) $110 in the case of self-only coverage and
$290 in the case of family coverage for such month.
‘‘(c) COBRA PREMIUMS.—For purposes of this sec-
tion, the term ‘COBRA premiums’ means, with respect to
any period of continuation coverage for a qualified bene-
ficiary, the cost of such coverage for such period to the
extent such cost does not exceed the maximum amount
which (without regard to this section) may be required
under section 4980B(f)(2)(C) to be paid for such coverage
for such beneficiary.
‘‘(d) OTHER DEFINITIONS.—Terms used in this sec-
tion which are also used in section 4980B shall have the
respective meanings given such terms by section 4980B.’’
(b) DENIAL OF DOUBLE BENEFIT.—Section 280C of
such Code (relating to certain expenses for which credits
are allowable) is amended by adding at the end the fol-
lowing new subsection:
‘‘(d) CREDIT
FOR EMPLOYER-PROVIDED COBRA
COVERAGE.—No deduction shall be allowed for that por-
tion of the COBRA premiums (as defined in section
45G(c)) otherwise allowable as a deduction for the taxable
year which is equal to the amount of the credit allowable
for the taxable year under section 45G (determined with-
out regard to section 38(c)).’’
(c) CONFORMING AMENDMENTS.—
(1) Subsection (b) of section 38 of such Code
is amended by striking ‘‘plus’’ at the end of para-
graph (14), by striking the period at the end of
paragraph (15) and inserting ‘‘, plus’’, and by add-
ing at the end the following:
‘‘(16) the employer-provided COBRA coverage
credit determined under section 45G.’’.
(2) The table of sections for subpart D of part
IV of subchapter A of chapter 1 of such Code is
amended by adding at the end the following new
item:
‘‘Sec. 45G. Employer-provided COBRA coverage.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
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