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 is eligible for,
and has elected coverage under, COBRA continu-
ation coverage shall be eligible for premium assist-
ance under the program established under this sec-
tion.
(3) STATE OPTION TO ELECT ADMINISTRATION
OF PROGRAM.—
(A) IN GENERAL.—A State may elect to
administer the premium assistance program es-
tablished under this section if the State submits
to the Secretary of the Treasury, not later than
January 1, 2002, a plan that describes how the
State will administer such program on behalf of
the individuals described in paragraph (1) or
(2) who reside in the State beginning on that
date.
(B) STATE ENTITLEMENT.—In the case of
a State that submits a plan under subpara-
graph (A), the Secretary of the Treasury shall
pay to each such State an amount for each
quarter equal to the total amount of premium
subsidies provided in that quarter on behalf of
such individuals.
(4) IMMEDIATE
IMPLEMENTATION.—The pro-
gram established under this section shall be imple-
mented without regard to whether or not final regu-
lations to carry out such program have been promul-
gated by the date described in paragraph (1).
(b) LIMITATION OF PERIOD OF PREMIUM ASSIST-
ANCE.—
(1) IN
GENERAL.—Premium assistance pro-
vided in accordance with this section shall end with
respect to an individual on the earlier of—
(A) the date the individual is no longer
covered under COBRA continuation coverage;
or
(B) 12 months after the date the indi-
vidual is first enrolled in the premium assist-
ance program established under this section.
(2) NO
ASSISTANCE
AFTER
DECEMBER
31,
2002.—No premium assistance (including payment
for such assistance) may be provided under this sec-
tion after December 31, 2002.
(c) PAYMENT ARRANGEMENTS; CREDITING OF AS-
SISTANCE.—
(1) PROVISION OF ASSISTANCE.—
(A) IN
GENERAL.—Premium assistance
shall be provided under the program established
under this section through direct payment ar-
rangements with a group health plan (including
a multiemployer plan), an issuer of health in-
surance coverage, an administrator, or an em-
ployer as appropriate with respect to the indi-
vidual provided such assistance.
(B) ADDITIONAL OPTION FOR STATE-RUN
PROGRAM.—In the case of a State that elects to
administer the program established under this
section, such assistance may be provided
through the State public employment office or
other agency responsible for administering the
State unemployment compensation program.
(2) PREMIUMS
PAYABLE
BY
INDIVIDUAL
RE-
DUCED BY AMOUNT OF ASSISTANCE.—Premium as-
sistance provided under this section shall be credited
by the group health plan, issuer of health insurance
coverage, or an administrator against the premium
otherwise owed by the individual involved for
COBRA continuation coverage.
(d) PROGRAM REQUIREMENTS.—Premium assistance
shall be provided under the program established under this
section consistent with the following:
(1) 
ALL
QUALIFYING
INDIVIDUALS
MAY
APPLY.—All individuals described in paragraph (1)
or (2) of subsection (a) may apply for such assist-
ance at any time during the period described in sub-
section (a)(1)(A).
(2) SELECTION ON FIRST-COME, FIRST-SERVED
BASIS.—Such assistance shall be provided to such
individuals who apply for the assistance in the order
in which they apply.
(e) LIMITATION ON ENTITLEMENT.—Nothing in this
section shall be construed as establishing any entitlement
of individuals described in paragraph (1) or (2) of sub-
section (a) to premium assistance under this section.
(f) DISREGARD OF SUBSIDIES FOR PURPOSES OF
FEDERAL AND STATE PROGRAMS.—Notwithstanding any
other provision of law, any premium assistance provided
to, or on behalf of, an individual under this section, shall
not be considered income or resources in determining eligi-
bility for, or the amount of assistance or benefits provided
under, any other Federal public benefit or State or local
public benefit.
(g) CHANGE IN COBRA NOTICE.—
(1) GENERAL NOTICE.—
(A) IN GENERAL.—In the case of notices
provided under section 4980B(f)(6) of the In-
ternal Revenue Code of 1986, section 2206 of
the Public Health Service Act (42 U.S.C.
300bb–6), section 606 of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C.
1166), or section 8905a(f)(2)(A) of title 5,
United States Code, with respect to individuals
who, during the period described in subsection
(a)(1)(A), become entitled to elect COBRA con-
tinuation coverage, such notices shall include an
additional notification to the recipient of the
availability of premium assistance for such cov-
erage under this section and for temporary
medicaid assistance under section 203 for the
remaining portion of COBRA continuation pre-
miums.
(B) ALTERNATIVE NOTICE.—In the case of
COBRA continuation coverage to which the no-
tice provision under such sections does not
apply, the Secretary of the Treasury, in con-
sultation with the Secretary of Labor, shall, in
coordination with administrators of the group
health plans (or other entities) that provide or
administer the COBRA continuation coverage
involved, assure the provision of such notice.
(C) FORM.—The requirement of the addi-
tional notification under this paragraph may be
met by amendment of existing notice forms or
by inclusion of a separate document with the
notice otherwise required.
(2) SPECIFIC REQUIREMENTS.—Each additional
notification under paragraph (1) shall include—
(A) the forms necessary for establishing
eligibility and enrollment in the premium assist-
ance program established under this section in
connection with the coverage with respect to
each covered employee or other qualified bene-
ficiary;
(B) the name, address, and telephone num-
ber necessary to contact the administrator and
any other person maintaining relevant informa-
tion in connection with the premium assistance;
and
(C) the following statement displayed in a
prominent manner:
‘‘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.’’.
(3) NOTICE RELATING TO RETROACTIVE COV-
ERAGE.—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) who has elected (or is still eligible to elect)
COBRA continuation coverage as of the date of en-
actment of this Act, the administrator of the group
health plan (or other entity) involved or the Sec-
retary of the Treasury, in consultation with the Sec-
retary of Labor, (in the case described in the para-
graph (1)(B)) shall provide (within 60 days after the
date of enactment of this Act) for the additional no-
tification required to be provided under paragraph
(1).
(4) MODEL NOTICES.—Not later than 30 days
after the date of enactment of this Act, the Sec-
retary of the Treasury shall prescribe models for the
additional notification required under this sub-
section.
(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 number and identification of the States
that have elected to administer the program.
(5) 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 (including pay-
ment for such assistance) may be provided under this sec-
tion after December 31, 2002.
SEC. 202. 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—
(1) the Federal medical assistance percentage
under section 1905(b) of the Social Security Act (42
U.S.C. 1396d(b)) shall be the enhanced FMAP (as
defined in section 2105(b) of such Act (42 U.S.C.
1397ee(b)));
(2) a State may elect to apply any income,
asset, or resource limitation permitted under the
State medicaid plan or under title XIX of such Act;
(3) the provisions of section 1916(g) of the So-
cial Security Act (42 U.S.C. 1396o) shall apply to
the provision of such assistance in the same manner
as the provisions of such section apply with respect
to individuals provided medical assistance only under
subclause 
(XV) 
or 
(XVI) 
of 
section
1902(a)(10)(A)(ii) 
of 
such 
Act 
(42 
U.S.C.
1396a(a)(10)(A)(ii));
(4) a State may elect to provide such assistance
in accordance with section 1902(a)(34) of the Social
Security Act (42 U.S.C. 1396a(a)(34)) and any as-
sistance provided with respect to a month described
in that section shall not be included in the deter-
mination of the 12-month period under subsection
(b)(2);
(5) a State may elect to make eligible for such
medical assistance a dependent spouse or children of
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 after December 31, 2002.
SEC. 203. 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 201 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
201; 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—