respect to the individual) that will collect
the monthly premium for such coverage,
specifying that the eligibility and enroll-
ment forms are to be completed by the in-
dividual and sent to such entity.
(iv) The following statement:
‘‘You may be eligible to receive assistance with pay-
ment of 75 percent of your COBRA continuation coverage
premiums and with temporary medicaid coverage for the
remaining premium portion for a duration of not to exceed
12 months. This assistance will not be available after De-
cember 31, 2002. Return the enclosed eligibility and en-
rollment forms as soon as possible to the address speci-
fied.’’.
(C) The dollar amount equal to 25 percent
of the monthly 2002 premium that would be
owed during 2002 by each individual for the
coverage if the individual is eligible for, and en-
rolls in, the program established under this sec-
tion.
(3) SUPPLEMENTAL NOTICE FOR INDIVIDUALS
PREVIOUSLY
PROVIDED
NOTICE
OR
WHOSE
ELEC-
TION PERIOD IS TEMPORARILY EXTENDED.—In the
case of such notices previously transmitted before
the date of enactment of this Act in the case of an
individual described in paragraph (1) or subsection
(a)(2) who has elected (or is still eligible to elect, in-
cluding as a result of subsection (a)(3)) COBRA
continuation coverage as of the date of enactment of
this Act, the employer, administrator, or other entity
involved, or the Secretary of the Treasury, in con-
sultation with the Secretary of Labor, (in the case
described in the paragraph (1)(B)) shall provide
(within the period required under paragraph
(4)(C)(i)) for the additional notification required to
be provided under this subsection.
(4) REQUIRED TIMELINE.—
(A) SECRETARY
OF
LABOR.—Not later
than 15 days after the date of enactment of
this Act, the Secretary of Labor shall—
(i) establish a toll-free telephone num-
ber and an Internet website to provide in-
formation and answer inquiries about the
program established under this section;
(ii) prescribe models for the additional
notification required under this subsection
and the forms necessary for establishing
eligibility and enrollment in the program,
in accordance with the requirements of this
subsection; and
(iii) consult with the Secretary of the
Treasury regarding the additional notifica-
tion required for individuals described in
paragraph (1)(B).
(B) SECRETARY OF THE TREASURY.—Not
later than 15 days after the date of enactment
of this Act, the Secretary of the Treasury
shall—
(i) notify each covered employer of the
program established under this section and
the additional notification required under
this subsection;
(ii) make the model notification, and
eligibility and enrollment forms prescribed
by the Secretary of Labor under subpara-
graph (A)(ii) available to each such cov-
ered employer; and
(iii) provide, in consultation with the
Secretary of Labor, the additional notifica-
tion required for individuals described in
paragraph (1)(B).
(C) COVERED
EMPLOYERS.—Not later
than 15 days after the model notification and
eligibility and enrollment forms are made avail-
able under subparagraph (B)(ii), each covered
employer or their designee shall—
(i) provide the additional notification
required under this subsection to the indi-
viduals described in paragraph (3) (other
than such individuals who are also de-
scribed in paragraph (1)(B)); and
(ii) be able to comply with such addi-
tional notification requirement in the case
of any individual described in paragraph
(1)(A).
(D) 
DEFINITION
OF
COVERED
EM-
PLOYER.—For purposes of this section, the
term ‘‘covered employer’’ means, for any cal-
endar year, any person on whom an excise tax
is imposed under section 3111 or 1401 of the
Internal Revenue Code of 1986 with respect to
having an individual in the person’s employ to
whom wages are paid by such person during
such calendar year.
(h) REPORTS.—Beginning on January 1, 2002, and
every 3 months thereafter until January 1, 2003, the Sec-
retary of the Treasury shall submit a report to Congress
regarding the premium assistance program established
under this section that includes the following:
(1) The status of the implementation of the
program.
(2) The number of individuals provided assist-
ance under the program as of the date of the report.
(3) The average dollar amount (monthly and
annually) of the premium assistance provided under
the program.
(4) The total amount of expenditures incurred
(with administrative expenditures noted separately)
under the program as of the date of the report.
(i) APPROPRIATION.—
(1) IN
GENERAL.—Out of any funds in the
Treasury not otherwise appropriated, there is appro-
priated to carry out this section, such sums as are
necessary for each of fiscal years 2002 and 2003.
(2) OBLIGATION OF FUNDS.—This section con-
stitutes budget authority in advance of appropria-
tions Acts and represents the obligation of the Fed-
eral Government to provide for the payment of pre-
mium assistance under this section.
(j) SUNSET.—No premium assistance may be pro-
vided under this section for any month beginning after De-
cember 31, 2002.
SEC. 402. STATE OPTION TO PROVIDE TEMPORARY MED-
ICAID COVERAGE FOR CERTAIN UNINSURED
INDIVIDUALS.
(a) STATE OPTION.—Notwithstanding any other pro-
vision of law, a State may elect to provide under its med-
icaid program under title XIX of the Social Security Act
medical assistance in the case of an individual—
(1) who at any time during the period that be-
gins on September 11, 2001, and ends on December
31, 2002, is separated from employment;
(2) who is not eligible for COBRA continuation
coverage;
(3) who is uninsured; and
(4) whose assets, resources, and earned or un-
earned income (or both) do not exceed such limita-
tions (if any) as the State may establish.
(b) LIMITATION OF PERIOD OF COVERAGE.—Medical
assistance provided in accordance with this section shall
end with respect to an individual on the earlier of—
(1) the date the individual is no longer unin-
sured; or
(2) subject to subsection (c)(4), 12 months
after the date the individual first receives such as-
sistance.
(c) SPECIAL RULES.—In the case of medical assist-
ance provided under this section—
an individual eligible for medical assistance under
subsection (a), if such spouse or children are unin-
sured;
(6) individuals eligible for medical assistance
under this section shall be deemed to be described
in the list of individuals described in the matter pre-
ceding paragraph (1) of section 1905(a) of such Act
(42 U.S.C. 1396d(a));
(7) 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 Per-
sonal Responsibility and Work Opportunity Rec-
onciliation 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 indi-
vidual who is an alien who is provided such assist-
ance, and the cost of such assistance shall not be
considered as an unreimbursed cost; and
(8) the Secretary of Health and Human Serv-
ices shall not count, for purposes of section 1108(f)
of the Social Security Act (42 U.S.C. 1308(f)), such
amount of payments under this section as bears a
reasonable relationship to the average national pro-
portion of payments made under this section for the
50 States and the District of Columbia to the pay-
ments otherwise made under title XIX for such
States and District.
(d) SUNSET.—No medical assistance may be provided
under this section for any month beginning after Decem-
ber 31, 2002.
SEC. 403. STATE OPTION TO PROVIDE TEMPORARY COV-
ERAGE UNDER MEDICAID FOR THE UNSUB-
SIDIZED PORTION OF COBRA CONTINUATION
PREMIUMS.
(a) STATE OPTION.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, a State may elect to provide under
its medicaid program under title XIX of the Social
Security Act medical assistance in the form of pay-
ment for the portion of the premium for COBRA
continuation coverage for which an individual does
not receive a subsidy under the premium assistance
program established under section 401 in the case of
an individual—
(A) who at any time during the period that
begins on September 11, 2001, and ends on De-
cember 31, 2002, is separated from employ-
ment;
(B) who is eligible for, and has elected cov-
erage under, COBRA continuation coverage;
(C) who is receiving premium assistance
under the program established under section
401; and
(D) whose family income does not exceed
200 percent of the poverty line.
(2) INCLUSION OF CERTAIN INDIVIDUALS.—For
purposes of paragraph (1), the spouse, child, or
other individual who was an insured under health in-
surance coverage of an individual who was killed as
a result of the terrorist-related aircraft crashes on
September 11, 2001, or as a result of any other ter-
rorist-related event occurring during the period de-
scribed in that paragraph, and who satisfies the re-
quirements of subparagraphs (B), (C), and (D) of
paragraph (1) shall be eligible for medical assistance
under this section.
(b) LIMITATION OF PERIOD OF COVERAGE.—Medical
assistance provided in accordance with 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 first
receives such assistance under this section.
(c) SPECIAL RULES.—In the case of medical assist-
ance provided under this section—
(1) such assistance may be provided without re-
gard to—
(A) whether the State otherwise has elect-
ed to make medical assistance available for
COBRA 
premiums 
under 
section
1902(a)(10)(F) of the Social Security Act (42
U.S.C. 1396a(a)(10)(F)); or
(B) the conditions otherwise imposed for
the provision of medical assistance for such
COBRA premiums under clause (XII) of the
matter following section 1902(a)(10)(G) of the
Social 
Security 
Act 
(42 
U.S.C.
1396a(a)(10)(G)), 
or 
paragraphs 
(1)(B),
(1)(C), (1)(D), and (4) of section 1902(u) of
such Act (42 U.S.C. 1396a(u)); and
(2) paragraphs (1), (2), (4), (5), (7), and (8)
of subsection (c) of section 402 apply to such assist-
ance in the same manner as such paragraphs apply
to the provision of medical assistance under that sec-
tion.
(d) SUNSET.—No medical assistance may be provided
under this section for any month beginning after Decem-
ber 31, 2002.
SEC. 404. TEMPORARY INCREASES OF MEDICAID FMAP FOR
FISCAL YEAR 2002.
(a) PERMITTING MAINTENANCE OF FISCAL YEAR
2001 FMAP.—Notwithstanding any other provision of
law, but subject to subsection (d), if the FMAP deter-
mined without regard to this section for a State for fiscal
year 2002 is less than the FMAP as so determined for
fiscal year 2001, the FMAP for the State for fiscal year
2001 shall be substituted for the State’s FMAP for fiscal
year 2002, before the application of this section.
(b) GENERAL
1.50 PERCENTAGE
POINTS
IN-
CREASE.—Notwithstanding any other provision of law, but
subject to subsections (d) and (e), for each State for each
calendar quarter in fiscal year 2002, the FMAP (taking
into account the application of subsection (a)) shall be in-
creased by 1.50 percentage points.
(c) FURTHER INCREASE FOR STATES WITH HIGH
UNEMPLOYMENT RATES.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, but subject to subsections (d) and
(e), the FMAP for a high unemployment State for
a calendar quarter in fiscal year 2002 (and any sub-
sequent calendar quarter in such fiscal year regard-
less of whether the State continues to be a high un-
employment State for a calendar quarter in such fis-
cal year) shall be increased (after the application of
subsections (a) and (b)) by 1.50 percentage points.
(2) HIGH UNEMPLOYMENT STATE.—For pur-
poses of this subsection, a State is a high unemploy-
ment State for a calendar quarter if, for any 3 con-
secutive months beginning on or after June 2001
and ending with the second month before the begin-
ning of the calendar quarter, the State has an unem-
ployment rate that exceeds the national average un-
employment rate. Such unemployment rates for such
months shall be determined based on publications of
the Bureau of Labor Statistics of the Department of
Labor.
(d) 1-YEAR INCREASE IN CAP ON MEDICAID PAY-
MENTS TO TERRITORIES.—Notwithstanding any other
provision of law, with respect to fiscal year 2002, the
amounts otherwise determined for Puerto Rico, the Virgin
Islands, Guam, the Northern Mariana Islands, and Amer-
ican Samoa under section 1108 of the Social Security Act
(42 U.S.C. 1308) shall each be increased by an amount
equal to 3.093 percentage points of such amounts.
(e) SCOPE OF APPLICATION.—The increases in the
FMAP for a State under this section shall apply only for
purposes of title XIX of the Social Security Act and shall
not apply with respect to—
(1) disproportionate share hospital payments
described in section 1923 of such Act (42 U.S.C.
1396r–4); and
(2) payments under titles IV and XXI of such
Act (42 U.S.C. 601 et seq. and 1397aa et seq.).
(f) STATE ELIGIBILITY.—A State is eligible for an
increase in its FMAP under subsection (b) or (c) only if
the eligibility under its State plan under title XIX of the
Social Security Act (including any waiver under such title
or under section 1115 of such Act (42 U.S.C. 1315)) is
no more restrictive than the eligibility under such plan (or
waiver) as in effect on October 1, 2001.
SEC. 405. DEFINITIONS.
In this title:
(1) ADMINISTRATOR.—The term ‘‘adminis-
trator’’ has the meaning given that term in section
3(16)(A) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1002(16)(A)).
(2) COBRA CONTINUATION COVERAGE.—
(A) IN
GENERAL.—The term ‘‘COBRA
continuation coverage’’ means coverage under a
group health plan provided by an employer pur-
suant 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.
(B) APPLICATION IN STATES REQUIRING
SUCH
COVERAGE.—Such term includes such
continuation coverage provided in a State that
has enacted a law that requires such continu-
ation coverage even though the continuation
coverage would not otherwise be required under
the provisions of law referred to in subpara-
graph (A).
(3) COVERED EMPLOYEE.—The term ‘‘covered
employee’’ has the meaning given that term in sec-
tion 607(2) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1167(2)).
(4) ELECTION PERIOD.—The term ‘‘election pe-
riod’’ has the meaning given that term in section
605(1) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1165(1)).
(5) FEDERAL
PUBLIC
BENEFIT.—The term
‘‘Federal public benefit’’ has the meaning given that
term in section 401(c) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 (8
U.S.C. 1611(c)).
(6) FMAP.—The term ‘‘FMAP’’ means the
Federal medical assistance percentage, as defined in
section 1905(b) of the Social Security Act (42
U.S.C. 1396d(b)).
(7) GROUP HEALTH PLAN.—The term ‘‘group
health plan’’ has the meaning given that term in sec-
tion 2791(a) of the Public Health Service Act (42
U.S.C. 300gg–91(a)), section 607(1) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1167(1)), and section 4980B(g)(2) of the In-
ternal Revenue Code of 1986.
(8) HEALTH INSURANCE COVERAGE.—The term
‘‘health insurance coverage’’ has the meaning given
that term in section 2791(b)(1) of the Public Health
Service Act (42 U.S.C. 300gg–91(b)(1)).
(9) MULTIEMPLOYER PLAN.—The term ‘‘multi-
employer plan’’ has the meaning given that term in
section 3(37) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002(37)).
(10) POVERTY LINE.—The term ‘‘poverty line’’
has the meaning given that term in section
2110(c)(5) of the Social Security Act (42 U.S.C.
1397jj(c)(5)).
(11) STATE.—The term ‘‘State’’ has the mean-
ing given such term for purposes of title XIX of the
Social Security Act (42 U.S.C. 1396 et seq.).
(12) STATE OR LOCAL PUBLIC BENEFIT.—The
term ‘‘State or local public benefit’’ has the meaning
given that term in section 411(c) of the Personal
Responsibility and Work Opportunity Reconciliation
Act of 1996 (8 U.S.C. 1621(c)).
(13) UNINSURED.—
(A) IN GENERAL.—The term ‘‘uninsured’’
means, with respect to an individual, that the
individual is not covered under—
(i) a group health plan;
(ii) health insurance coverage; or
(iii) a program under title XVIII,
XIX, or XXI of the Social Security Act
(other than under such title XIX pursuant
to section 402).
(B) EXCLUSION.—Such coverage under
clause (i) or (ii) shall not include coverage con-
sisting solely of coverage of excepted benefits
(as defined in section 2791(c) of the Public
Health Service Act (42 U.S.C. 300gg–91(c)).
TITLE V—REVENUE OFFSET
SEC. 501. HIGHEST MARGINAL INCOME TAX RATE NOT RE-
DUCED BELOW 37.6 PERCENT.
(a) IN GENERAL.—The table contained in paragraph
(2) of section 1(i) is amended in the column under the
39.6 percentage by striking ‘‘35.0%’’ and inserting
‘‘37.6%’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 2001.
(c) SECTION 15 NOT TO APPLY.—The amendment
made by subsection (a) shall not be treated as a change
in the rate of a tax imposed by chapter 1 of the Internal
Revenue Code of 1986 for purposes of section 15 of such
Code.
TITLE VI—EMERGENCY EMPLOY-
MENT AND TRAINING ASSIST-
ANCE 
FOR 
DISLOCATED
WORKERS
SEC. 601. ADDITIONAL FUNDING FOR NATIONAL EMER-
GENCY GRANTS UNDER THE WORKFORCE IN-
VESTMENT ACT OF 1998.
Section 173 of the Workforce Investment Act of 1998
(29 U.S.C. 2918) is amended by adding at the end the
following:
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) IN
GENERAL.—In addition to amounts
made available under section 132(a)(2)(A) to carry
out this section, there are authorized to be appro-
priated $5,000,000,000 to carry out this section for
fiscal years 2002 and 2003.
‘‘(2) 
AVAILABILITY.—Amounts 
appropriated
pursuant to the authorization of appropriations
under paragraph (1) are authorized to remain avail-
able until expended.’’.
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