Act of 1974 for purposes of part 5 of subtitle B of 
such title. 
(6) DISREGARD OF SUBSIDIES FOR PURPOSES 
OF
FEDERAL
AND
STATE
PROGRAMS.—Notwith-
standing any other provision of law, any premium 
reduction with respect to an assistance eligible indi-
vidual under this subsection shall not be considered 
income or resources in determining eligibility for, or 
the amount of assistance or benefits provided under, 
any other public benefit provided under Federal law 
or the law of any State or political subdivision there-
of. 
(7) NOTICES TO INDIVIDUALS.— 
(A) GENERAL NOTICE.— 
(i) IN GENERAL.—In the case of no-
tices provided under section 606(a)(4) of 
the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1166(4)), section 
4980B(f)(6)(D) of the Internal Revenue 
Code of 1986, section 2206(4) of the Pub-
lic Health Service Act (42 U.S.C. 300bb– 
6(4)), or section 8905a(f)(2)(A) of title 5, 
United States Code, with respect to indi-
viduals who, during the period described in 
paragraph (3)(A), become entitled to elect 
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COBRA continuation coverage, the re-
quirements of such sections shall not be 
treated as met unless such notices include 
an additional notification to the recipient 
of— 
(I) the availability of premium 
reduction with respect to such cov-
erage under this subsection, and 
(II) the option to enroll in dif-
ferent coverage if the employer per-
mits assistance eligible individuals to 
elect enrollment in different coverage 
(as described in paragraph (1)(B)). 
(ii) ALTERNATIVE
NOTICE.—In the 
case of COBRA continuation coverage to 
which the notice provision under such sec-
tions does not apply, the Secretary of 
Labor, in consultation with the Secretary 
of the Treasury and the Secretary of 
Health and Human Services, shall, in con-
sultation with administrators of the group 
health plans (or other entities) that provide 
or administer the COBRA continuation 
coverage involved, provide rules requiring 
the provision of such notice. 
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(iii) FORM.—The requirement of the 
additional notification under this subpara-
graph may be met by amendment of exist-
ing notice forms or by inclusion of a sepa-
rate document with the notice otherwise 
required. 
(B) SPECIFIC REQUIREMENTS.—Each ad-
ditional notification under subparagraph (A) 
shall include— 
(i) the forms necessary for estab-
lishing eligibility for premium reduction 
under this subsection, 
(ii) the name, address, and telephone 
number necessary to contact the plan ad-
ministrator and any other person main-
taining relevant information in connection 
with such premium reduction, 
(iii) a description of the extended elec-
tion period provided for in paragraph 
(4)(A), 
(iv) a description of the obligation of 
the qualified beneficiary under paragraph 
(2)(C) to notify the plan providing continu-
ation coverage of eligibility for subsequent 
coverage under another group health plan 
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or eligibility for benefits under title XVIII 
of the Social Security Act and the penalty 
provided under section 6720C of the Inter-
nal Revenue Code of 1986 for failure to so 
notify the plan, 
(v) a description, displayed in a 
prominent manner, of the qualified bene-
ficiary’s right to a reduced premium and 
any conditions on entitlement to the re-
duced premium, and 
(vi) a description of the option of the 
qualified beneficiary to enroll in different 
coverage if the employer permits such ben-
eficiary to elect to enroll in such different 
coverage under paragraph (1)(B). 
(C) NOTICE
IN
CONNECTION
WITH
EX-
TENDED ELECTION PERIODS.—In the case of 
any assistance eligible individual (or any indi-
vidual described in paragraph (4)(A)) who be-
came entitled to elect COBRA continuation cov-
erage before the date of the enactment of this 
Act, the administrator of the group health plan 
(or other entity) involved shall provide (within 
60 days after the date of enactment of this Act) 
for the additional notification required to be 
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provided under subparagraph (A) and failure to 
provide such notice shall be treated as a failure 
to meet the notice requirements under the ap-
plicable COBRA continuation provision. 
(D) MODEL NOTICES.—Not later than 30 
days after the date of enactment of this Act— 
(i) the Secretary of Labor, in con-
sultation with the Secretary of the Treas-
ury and the Secretary of Health and 
Human Services, shall prescribe models for 
the additional notification required under 
this paragraph (other than the additional 
notification described in clause (ii)), and 
(ii) in the case of any additional noti-
fication provided pursuant to subpara-
graph (A) under section 8905a(f)(2)(A) of 
title 5, United States Code, the Office of 
Personnel Management shall prescribe a 
model for such additional notification. 
(8) REGULATIONS.—The Secretary of the 
Treasury may prescribe such regulations or other 
guidance as may be necessary or appropriate to 
carry out the provisions of this subsection, including 
the prevention of fraud and abuse under this sub-
section, except that the Secretary of Labor and the 
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Secretary of Health and Human Services may pre-
scribe such regulations (including interim final regu-
lations) or other guidance as may be necessary or 
appropriate to carry out the provisions of para-
graphs (5), (7), and (9). 
(9) OUTREACH.—The Secretary of Labor, in 
consultation with the Secretary of the Treasury and 
the Secretary of Health and Human Services, shall 
provide outreach consisting of public education and 
enrollment assistance relating to premium reduction 
provided under this subsection. Such outreach shall 
target employers, group health plan administrators, 
public assistance programs, States, insurers, and 
other entities as determined appropriate by such 
Secretaries. Such outreach shall include an initial 
focus on those individuals electing continuation cov-
erage who are referred to in paragraph (7)(C). In-
formation on such premium reduction, including en-
rollment, shall also be made available on websites of 
the Departments of Labor, Treasury, and Health 
and Human Services. 
(10) DEFINITIONS.—For purposes of this sec-
tion— 
(A) ADMINISTRATOR.—The term ‘‘admin-
istrator’’ has the meaning given such term in 
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pamtmann on DSKBC07HB2PROD with BILLS
section 3(16)(A) of the Employee Retirement 
Income Security Act of 1974. 
(B) COBRA CONTINUATION COVERAGE.— 
The term ‘‘COBRA continuation coverage’’ 
means continuation coverage provided pursuant 
to part 6 of subtitle B of title I of the Em-
ployee Retirement Income Security Act of 1974 
(other than under section 609), 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), or section 8905a 
of title 5, United States Code, or under a State 
program that provides comparable continuation 
coverage. Such term does not include coverage 
under a health flexible spending arrangement 
under a cafeteria plan within the meaning of 
section 125 of the Internal Revenue Code of 
1986. 
(C) COBRA CONTINUATION PROVISION.— 
The term ‘‘COBRA continuation provision’’ 
means the provisions of law described in sub-
paragraph (B). 
(D) 
COVERED
EMPLOYEE.—The 
term 
‘‘covered employee’’ has the meaning given such 
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pamtmann on DSKBC07HB2PROD with BILLS
term in section 607(2) of the Employee Retire-
ment Income Security Act of 1974. 
(E) QUALIFIED BENEFICIARY.—The term 
‘‘qualified beneficiary’’ has the meaning given 
such term in section 607(3) of the Employee 
Retirement Income Security Act of 1974. 
(F) GROUP
HEALTH
PLAN.—The term 
‘‘group health plan’’ has the meaning given 
such term in section 607(1) of the Employee 
Retirement Income Security Act of 1974. 
(G) STATE.—The term ‘‘State’’ includes 
the District of Columbia, the Commonwealth of 
Puerto Rico, the Virgin Islands, Guam, Amer-
ican Samoa, and the Commonwealth of the 
Northern Mariana Islands. 
(H) PERIOD
OF
COVERAGE.—Any ref-
erence in this subsection to a period of coverage 
shall be treated as a reference to a monthly or 
shorter period of coverage with respect to which 
premiums are charged with respect to such cov-
erage. 
(11) REPORTS.— 
(A) INTERIM REPORT.—The Secretary of 
the Treasury shall submit an interim report to 
the Committee on Education and Labor, the 
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Committee on Ways and Means, and the Com-
mittee on Energy and Commerce of the House 
of Representatives and the Committee on 
Health, Education, Labor, and Pensions and 
the Committee on Finance of the Senate re-
garding the premium reduction provided under 
this subsection that includes— 
(i) the number of individuals provided 
such assistance as of the date of the re-
port; and 
(ii) the total amount of expenditures 
incurred (with administrative expenditures 
noted separately) in connection with such 
assistance as of the date of the report. 
(B) FINAL
REPORT.—As soon as prac-
ticable after the last period of COBRA continu-
ation coverage for which premium reduction is 
provided under this section, the Secretary of the 
Treasury shall submit a final report to each 
committee referred to in subparagraph (A) that 
includes— 
(i) the number of individuals provided 
premium reduction under this section; 
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(ii) 
the 
average 
dollar 
amount 
(monthly and annually) of premium reduc-
tions provided to such individuals; and 
(iii) the total amount of expenditures 
incurred (with administrative expenditures 
noted separately) in connection with pre-
mium reduction under this section. 
(12) COBRA PREMIUM ASSISTANCE.— 
(A) IN GENERAL.—Subchapter B of chap-
ter 65 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following 
new section: 
‘‘SEC. 6431. COBRA PREMIUM ASSISTANCE. 
‘‘(a) IN GENERAL.—The person to whom premiums 
are payable under COBRA continuation coverage shall be 
reimbursed as provided in subsection (c) for the amount 
of premiums not paid by assistance eligible individuals by 
reason of section 4 of the Health Care Protection Act. 
‘‘(b) PERSON ENTITLED TO REIMBURSEMENT.—For 
purposes of subsection (a), except as otherwise provided 
by the Secretary, the person to whom premiums are pay-
able under COBRA continuation coverage shall be treated 
as being— 
‘‘(1) in the case of any group health plan which 
is a multiemployer plan (as defined in section 3(37) 
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pamtmann on DSKBC07HB2PROD with BILLS
of the Employee Retirement Income Security Act of 
1974), the plan, 
‘‘(2) in the case of any group health plan not 
described in paragraph (1)— 
‘‘(A) which is subject to the COBRA con-
tinuation provisions contained in— 
‘‘(i) the Internal Revenue Code of 
1986, 
‘‘(ii) the Employee Retirement Income 
Security Act of 1974, 
‘‘(iii) the Public Health Service Act, 
or 
‘‘(iv) title 5, United States Code, or 
‘‘(B) under which some or all of the cov-
erage is not provided by insurance, 
the employer maintaining the plan, and 
‘‘(3) in the case of any group health plan not 
described in paragraph (1) or (2), the insurer pro-
viding the coverage under the group health plan. 
‘‘(c) METHOD OF REIMBURSEMENT.—Except as oth-
erwise provided by the Secretary— 
‘‘(1) TREATMENT
AS
PAYMENT
OF
PAYROLL 
TAXES.—Each person entitled to reimbursement 
under subsection (a) (and filing a claim for such re-
imbursement at such time and in such manner as 
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the Secretary may require) shall be treated for pur-
poses of this title and section 1324(b)(2) of title 31, 
United States Code, as having paid to the Secretary, 
on the date that the assistance eligible individual’s 
premium payment is received, payroll taxes in an 
amount equal to the portion of such reimbursement 
which relates to such premium. To the extent that 
the amount treated as paid under the preceding sen-
tence exceeds the amount of such person’s liability 
for such taxes, the Secretary shall credit or refund 
such excess in the same manner as if it were an 
overpayment of such taxes. 
‘‘(2) OVERSTATEMENTS.—Any overstatement of 
the reimbursement to which a person is entitled 
under this section (and any amount paid by the Sec-
retary as a result of such overstatement) shall be 
treated as an underpayment of payroll taxes by such 
person and may be assessed and collected by the 
Secretary in the same manner as payroll taxes. 
‘‘(3) REIMBURSEMENT
CONTINGENT
ON
PAY-
MENT OF REMAINING PREMIUM.—No reimbursement 
may be made under this section to a person with re-
spect to any assistance eligible individual until after 
the 
reduced 
premium 
required 
under 
section 
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4(a)(1)(A) of the Health Care Protection Act with 
respect to such individual has been received. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) PAYROLL
TAXES.—The term ‘payroll 
taxes’ means— 
‘‘(A) amounts required to be deducted and 
withheld for the payroll period under section 
3402 (relating to wage withholding), 
‘‘(B) amounts required to be deducted for 
the payroll period under section 3102 (relating 
to FICA employee taxes), and 
‘‘(C) amounts of the taxes imposed for the 
payroll period under section 3111 (relating to 
FICA employer taxes). 
‘‘(2) PERSON.—The term ‘person’ includes any 
governmental entity. 
‘‘(e) REPORTING.—Each person entitled to reim-
bursement under subsection (a) for any period shall sub-
mit such reports (at such time and in such manner) as 
the Secretary may require, including— 
‘‘(1) an attestation of involuntary termination 
of employment for each covered employee on the 
basis of whose termination entitlement to reimburse-
ment is claimed under subsection (a), 
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‘‘(2) a report of the amount of payroll taxes off-
set under subsection (a) for the reporting period and 
the estimated offsets of such taxes for the subse-
quent reporting period in connection with reimburse-
ments under subsection (a), and 
‘‘(3) a report containing the TINs of all covered 
employees, the amount of subsidy reimbursed with 
respect to each covered employee and qualified bene-
ficiaries, and a designation with respect to each cov-
ered employee as to whether the subsidy reimburse-
ment is for coverage of 1 individual or 2 or more in-
dividuals. 
‘‘(f) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as may be necessary or ap-
propriate to carry out this section, including— 
‘‘(1) the requirement to report information or 
the establishment of other methods for verifying the 
correct amounts of reimbursements under this sec-
tion, and 
‘‘(2) the application of this section to group 
health plans that are multiemployer plans (as de-
fined in section 3(37) of the Employee Retirement 
Income Security Act of 1974).’’. 
(B) SOCIAL SECURITY TRUST FUNDS HELD 
HARMLESS.—In determining any amount trans-
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ferred or appropriated to any fund under the 
Social Security Act, section 6431 of the Inter-
nal Revenue Code of 1986 shall not be taken 
into account. 
(C) CLERICAL AMENDMENT.—The table of 
sections for subchapter B of chapter 65 of the 
Internal Revenue Code of 1986 is amended by 
adding at the end the following new item: 
‘‘Sec. 6431. COBRA premium assistance.’’. 
(D) EFFECTIVE DATE.—The amendments 
made by this paragraph shall apply to pre-
miums to which subsection (a)(1)(A) applies. 
(E) SPECIAL RULE.— 
(i) IN GENERAL.—In the case of an 
assistance eligible individual who pays, 
with respect to the first period of COBRA 
continuation coverage to which subsection 
(a)(1)(A) applies or the immediately subse-
quent period, the full premium amount for 
such coverage, the person to whom such 
payment is payable shall— 
(I) make a reimbursement pay-
ment to such individual for the 
amount of such premium paid in ex-
cess of the amount required to be paid 
under subsection (a)(1)(A); or 
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(II) provide credit to the indi-
vidual for such amount in a manner 
that reduces one or more subsequent 
premium payments that the individual 
is required to pay under such sub-
section for the coverage involved. 
(ii) 
REIMBURSING
EMPLOYER.—A 
person to which clause (i) applies shall be 
reimbursed as provided for in section 6431 
of the Internal Revenue Code of 1986 for 
any payment made, or credit provided, to 
the employee under such clause. 
(iii) PAYMENT OR CREDITS.—Unless 
it is reasonable to believe that the credit 
for the excess payment in clause (i)(II) will 
be used by the assistance eligible individual 
within 180 days of the date on which the 
person receives from the individual the 
payment of the full premium amount, a 
person to which clause (i) applies shall 
make the payment required under such 
clause to the individual within 60 days of 
such payment of the full premium amount. 
If, as of any day within the 180-day pe-
riod, it is no longer reasonable to believe 
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that the credit will be used during that pe-
riod, payment equal to the remainder of 
the credit outstanding shall be made to the 
individual within 60 days of such day. 
(13) PENALTY
FOR
FAILURE
TO
NOTIFY 
HEALTH PLAN OF CESSATION OF ELIGIBILITY FOR 
PREMIUM ASSISTANCE.— 
(A) IN GENERAL.—Part I of subchapter B 
of chapter 68 of the Internal Revenue Code of 
1986 is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 6720C. PENALTY FOR FAILURE TO NOTIFY HEALTH 
PLAN OF CESSATION OF ELIGIBILITY FOR 
COBRA PREMIUM ASSISTANCE. 
‘‘(a) IN GENERAL.—Any person required to notify a 
group health plan under section 4(a)(2)(C) of the Health 
Care Protection Act who fails to make such a notification 
at such time and in such manner as the Secretary of 
Labor may require shall pay a penalty of 110 percent of 
the premium reduction provided under such section after 
termination of eligibility under such subsection. 
‘‘(b) REASONABLE CAUSE EXCEPTION.—No penalty 
shall be imposed under subsection (a) with respect to any 
failure if it is shown that such failure is due to reasonable 
cause and not to willful neglect.’’. 
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