[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2935 Introduced in Senate (IS)]
108th CONGRESS
2d Session
S. 2935
To amend section 35 of the Internal Revenue Code of 1986 to improve the
health coverage tax credit, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 7, 2004
Mr. Rockefeller introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend section 35 of the Internal Revenue Code of 1986 to improve the
health coverage tax credit, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``TAA Health
Coverage Improvement Act of 2004''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Improvement of the affordability of the credit.
Sec. 3. 100 percent credit and payment for monthly premiums paid prior
to certification of eligibility for the
credit.
Sec. 4. Eligibility for certain pension plan participants; presumptive
eligibility.
Sec. 5. Clarification of 3-month creditable coverage requirement.
Sec. 6. TAA pre-certification period rule for purposes of determining
whether there is a 63-day lapse in
creditable coverage.
Sec. 7. Continued qualification of family members after certain events.
Sec. 8. Offering of Federal group coverage.
Sec. 9. Additional requirements for individual health insurance costs.
Sec. 10. Alignment of COBRA coverage with TAA period for TAA-eligible
individuals.
Sec. 11. Notice requirements.
Sec. 12. Annual report on enhanced TAA benefits.
Sec. 13. Extension of national emergency grants.
Sec. 14. Extension of funding for operation of State high risk health
insurance pools.
SEC. 2. IMPROVEMENT OF THE AFFORDABILITY OF THE CREDIT.
(a) Improvement of Affordability.--
(1) In general.--Section 35(a) of the Internal Revenue Code
of 1986 (relating to credit for health insurance costs of
eligible individuals) is amended by striking ``65'' and
inserting ``95''.
(2) Conforming amendment.--Section 7527(b) of such Code
(relating to advance payment of credit for health insurance
costs of eligible individuals) is amended by striking ``65''
and inserting ``95''.
(b) Effective Date.--The amendments made by this section apply to
taxable years beginning after December 31, 2004.
SEC. 3. 100 PERCENT CREDIT AND PAYMENT FOR MONTHLY PREMIUMS PAID PRIOR
TO CERTIFICATION OF ELIGIBILITY FOR THE CREDIT.
(a) In General.--Subsection (a) of section 35 of the Internal
Revenue Code of 1986, as amended by section 2(a)(1), is amended--
(1) by striking the subsection heading and all that follows
through ``In case'' and inserting ``Amount of Credit.--
``(1) In general.--In case''; and
(2) by adding at the end the following new paragraph:
``(2) 100 percent credit for months prior to issuance of
eligibility certificate.--The amount allowed as a credit
against the tax imposed by subtitle A shall be equal to 100
percent in the case of the taxpayer's first eligible coverage
months occurring prior to the issuance of a qualified health
insurance costs credit eligibility certificate.''.
(b) Payment for Premiums Due Prior to Certification of Eligibility
for the Credit.--Section 7527 of the Internal Revenue Code of 1986
(relating to advance payment of credit for health insurance costs of
eligible individuals) is amended by adding at the end the following new
subsection:
``(e) Payment for Premiums Due Prior To Issuance of Certificate.--
The program established under subsection (a) shall provide--
``(1) that the Secretary shall make payments on behalf of a
certified individual of an amount equal to 100 percent of the
premiums for coverage of the taxpayer and qualifying family
members under qualified health insurance for eligible coverage
months (as defined in section 35(b)) occurring prior to the
issuance of a qualified health insurance costs credit
eligibility certificate; and
``(2) that any payments made under paragraph (1) shall not
be included in the gross income of the taxpayer on whose behalf
such payments were made.''.
(c) Effective Date.--The amendments made by this section shall
apply to months beginning after the date of the enactment of this Act
in taxable years ending after such date.
SEC. 4. ELIGIBILITY FOR CERTAIN PENSION PLAN RECIPIENTS; PRESUMPTIVE
ELIGIBILITY.
(a) Eligibility for Certain Pension Plan Recipients.--Subsection
(c) of section 35 of the Internal Revenue Code of 1986 is amended--
(1) in paragraph (1)--
(A) in subparagraph (B), by striking ``and'' at the
end;
(B) in subparagraph (C), by striking the period and
inserting ``, and''; and
(C) by adding at the end the following:
``(D) an eligible multiemployer pension
participant.''; and
(2) by adding at the end the following new paragraph:
``(5) Eligible multiemployer pension recipient.--The term
`eligible multiemployer pension recipient' means, with respect
to any month, any individual--
``(A) who has attained age 55 as of the first day
of such month,
``(B) who is receiving a benefit from a
multiemployer plan (as defined in section 3(37)(A) of
the Employee Retirement Income Security Act of 1974),
and
``(C) whose former employer has withdrawn from such
multiemployer plan pursuant to section 4203(a) of such
Act.''.
(b) Presumptive Eligibility for Petitioners for Trade Adjustment
Assistance.--Subsection (c) of section 35 of the Internal Revenue Code
of 1986, as amended by subsection (a), is amended by adding at the end
the following new paragraph:
``(6) Presumptive status as a taa recipient.--The term
`eligible individual' shall include any individual who is
covered by a petition filed with the Secretary of Labor under
section 221 of the Trade Act of 1974. This paragraph shall
apply to any individual only with respect to months which--
``(A) end after the date that such petition is so
filed, and
``(B) begin before the earlier of--
``(i) the 90th day after the date of filing
of such petition, or
``(ii) the date on which the Secretary of
Labor makes a final determination with respect
to such petition.''.
(c) Conforming Amendments.--
(1) Paragraph (1) of section 7527(d) of such Code is
amended by striking ``or an eligible alternative TAA recipient
(as defined in section 35(c)(3))'' and inserting ``, an
eligible alternative TAA recipient (as defined in section
35(c)(3)), an eligible multiemployer pension recipient (as
defined in section 35(c)(5), or an individual who is an
eligible individual by reason of section 35(c)(6)''.
(2) Section 173(f)(4) of the Workforce Investment Act of
1998 (29 U.S.C. 2918(f)(4)) is amended--
(A) in subparagraph (B), by striking ``and'' at the
end;
(B) in subparagraph (C), by striking the period and
inserting a comma; and
(C) by inserting after subparagraph (C), the
following new subparagraphs:
``(D) an eligible multiemployer pension recipient
(as defined in section 35(c)(5) of the Internal Revenue
Code of 1986), and
``(E) an individual who is an eligible individual
by reason of section 35(c)(6) of the Internal Revenue
Code of 1986.''.
(d) Technical Amendment Clarifying Eligibility of Certain Displaced
Workers Receiving a Benefit Under a Defined Benefit Pension Plan.--The
first sentence of section 35(c)(2) of the Internal Revenue Code of 1986
is amended by inserting before the period the following: ``, and shall
include any such individual who would be eligible to receive such an
allowance but for the fact that the individual is receiving a benefit
under a defined benefit plan (as defined in section 3(35) of the
Employee Retirement Income Security Act of 1974).''.
(e) Effective Date.--The amendments made by this section shall
apply to months beginning after the date of the enactment of this Act
in taxable years ending after such date.
SEC. 5. CLARIFICATION OF 3-MONTH CREDITABLE COVERAGE REQUIREMENT.
(a) In General.--Clause (i) of section 35(e)(2)(B) of the Internal
Revenue Code of 1986 (defining qualifying individual) is amended by
inserting ``(prior to the employment separation necessary to attain the
status of an eligible individual)'' after ``9801(c)''.
(b) Conforming Amendment.--Section 173(f)(2)(B)(ii)(I) of the
Workforce Investment Act of 1998 (29 U.S.C. 2918(f)(2)(B)(ii)(I)) is
amended by inserting ``(prior to the employment separation necessary to
attain the status of an eligible individual)'' after ``1986''.
(c) Effective Date.--The amendments made by this section shall
apply to months beginning after the date of the enactment of this Act
in taxable years ending after such date.
SEC. 6. TAA PRE-CERTIFICATION PERIOD RULE FOR PURPOSES OF DETERMINING
WHETHER THERE IS A 63-DAY LAPSE IN CREDITABLE COVERAGE.
(a) ERISA Amendment.--Section 701(c)(2) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1181(c)(2)) is amended by adding
at the end the following new subparagraph:
``(C) TAA-eligible individuals.--
``(i) TAA pre-certification period rule.--
In the case of a TAA-eligible individual, the
period beginning on the date the individual has
a TAA-related loss of coverage and ending on
the date that is 5 days after the postmark date
of the notice by the Secretary (or by any
person or entity designated by the Secretary)
that the individual is eligible for a qualified
health insurance costs credit eligibility
certificate for purposes of section 7527 of the
Internal Revenue Code of 1986 shall not be
taken into account in determining the
continuous period under subparagraph (A).
``(ii) Definitions.--The terms `TAA-
eligible individual', and `TAA-related loss of
coverage' have the meanings given such terms in
section 605(b)(4)(C).''.
(b) PHSA Amendment.--Section 2701(c)(2) of the Public Health
Service Act (42 U.S.C. 300gg(c)(2)) is amended by adding at the end the
following new subparagraph:
``(C) TAA-eligible individuals.--
``(i) TAA pre-certification period rule.--
In the case of a TAA-eligible individual, the
period beginning on the date the individual has
a TAA-related loss of coverage and ending on
the date that is 5 days after the postmark date
of the notice by the Secretary (or by any
person or entity designated by the Secretary)
that the individual is eligible for a qualified
health insurance costs credit eligibility
certificate for purposes of section 7527 of the
Internal Revenue Code of 1986 shall not be
taken into account in determining the
continuous period under subparagraph (A).
``(ii) Definitions.--The terms `TAA-
eligible individual', and `TAA-related loss of
coverage' have the meanings given such terms in
section 2205(b)(4)(C).''.
(c) IRC Amendment.--Section 9801(c)(2) of the Internal Revenue Code
of 1986 (relating to not counting periods before significant breaks in
creditable coverage) is amended by adding at the end the following new
subparagraph:
``(D) TAA-eligible individuals.--
``(i) TAA pre-certification period rule.--
In the case of a TAA-eligible individual, the
period beginning on the date the individual has
a TAA-related loss of coverage and ending on
the date which is 5 days after the postmark
date of the notice by the Secretary (or by any
person or entity designated by the Secretary)
that the individual is eligible for a qualified
health insurance costs credit eligibility
certificate for purposes of section 7527 shall
not be taken into account in determining the
continuous period under subparagraph (A).
``(ii) Definitions.--The terms `TAA-
eligible individual', and `TAA-related loss of
coverage' have the meanings given such terms in
section 4980B(f)(5)(C)(iv).''.
(d) Effective Date.--The amendments made by this section shall
apply to months beginning after the date of the enactment of this Act
in taxable years ending after such date.
SEC. 7. CONTINUED QUALIFICATION OF FAMILY MEMBERS AFTER CERTAIN EVENTS.
(a) In General.--Subsection (g) of section 35 of the Internal
Revenue Code of 1986 is amended by redesignating paragraph (9) as
paragraph (10) and inserting after paragraph (8) the following new
paragraph:
``(9) Continued qualification of family members after
certain events.--
``(A) Eligible individual becomes medicare
eligible.--In the case of a month which would be an
eligible coverage month with respect to an eligible
individual but for subsection (f)(2)(A), such month
shall be treated as an eligible coverage month with
respect to any qualifying family member of such
eligible individual (but not with respect to such
eligible individual).
``(B) Divorce.--In the case of a month which would
be an eligible coverage month with respect to a former
spouse of a taxpayer but for the finalization of a
divorce between the spouse and the taxpayer that occurs
during the period in which the taxpayer is an eligible
individual, such month shall be treated as an eligible
coverage month with respect to such former spouse.
``(C) Death.--In the case of a month which would be
an eligible coverage month with respect to an eligible
individual but for the death of such individual, such
month shall be treated as an eligible coverage month
with respect to any qualifying family of such eligible
individual.''.
(b) Conforming Amendment.--Section 173(f) of the Workforce
Investment Act of 1998 (29 U.S.C. 2918(f)) is amended by adding at the
end the following:
``(8) Continued qualification of family members after
certain events.--
``(A) Eligible individual becomes medicare
eligible.--In the case of a month which would be an
eligible coverage month with respect to an eligible
individual but for subsection (f)(2)(A), such month
shall be treated as an eligible coverage month with
respect to any qualifying family member of such
eligible individual (but not with respect to such
eligible individual).
``(B) Divorce.--In the case of a month which would
be an eligible coverage month with respect to a former
spouse of a taxpayer but for the finalization of a
divorce between the spouse and the taxpayer that occurs
during the period in which the taxpayer is an eligible
individual, such month shall be treated as an eligible
coverage month with respect to such former spouse.
``(C) Death.--In the case of a month which would be
an eligible coverage month with respect to an eligible
individual but for the death of such individual, such
month shall be treated as an eligible coverage month
with respect to any qualifying family of such eligible
individual.''.
(c) Effective Date.--The amendments made by this section shall
apply to months beginning after the date of the enactment of this Act
in taxable years ending after such date.
SEC. 8. OFFERING OF FEDERAL GROUP COVERAGE.
(a) Provision of Group Coverage.--
(1) In general.--The Director of the Office of Personnel
Management jointly with the Secretary of the Treasury shall
establish a program under which eligible individuals (as
defined in section 35(c) of the Internal Revenue Code of 1986)
are offered enrollment under health benefit plans that are made
available under FEHBP.
(2) Terms and conditions.--The terms and conditions of
health benefits plans offered under paragraph (1) shall be the
same as the terms and coverage offered under FEHBP, except that
the percentage of the premium charged to eligible individuals
(as so defined) for such health benefit plans shall be equal to
5 percent.
(3) Study.--The Director of the Office of Personnel
Management jointly with the Secretary of the Treasury shall
conduct a study of the impact of the offering of health benefit
plans under this subsection on the terms and conditions,
including premiums, for health benefit plans offered under
FEHBP and shall submit to Congress, not later than 2 years
after the date of the enactment of this Act, a report on such
study. Such report may contain such recommendations regarding
the establishment of separate risk pools for individuals
covered under FEHBP and eligible individuals covered under
health benefit plans offered under paragraph (1) as may be
appropriate to protect the interests of individuals covered
under FEHBP and alleviate any adverse impact on FEHBP that may
result from the offering of such health benefit plans.
(4) FEHBP defined.--In this section, the term ``FEHBP''
means the Federal Employees Health Benefits Program offered
under chapter 89 of title 5, United States Code.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 35(e) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
subparagraph:
``(K) Coverage under a health benefits plan offered
under section 8(a)(1) of the TAA Health Care Tax Credit
Improvement Act of 2004.''.
(2) Section 173(f)(2)(A) of the Workforce Investment Act of
1998 (29 U.S.C. 2918(f)(2)(A)) is amended by adding at the end
the following new clause:
``(xi) Coverage under a health benefits
plan offered under section 8(a)(1) of the TAA
Health Care Tax Credit Improvement Act of
2004.''.
SEC. 9. ADDITIONAL REQUIREMENTS FOR INDIVIDUAL HEALTH INSURANCE COSTS.
(a) In General.--Subparagraph (A) of section 35(e)(2) of such Code
is amended by striking ``subparagraphs (B) through (H) of paragraph
(1)'' and inserting ``paragraph (1) (other than subparagraphs (A), (I),
and (K) thereof)''.
(b) Rating System Requirement.--Subparagraph (J) of section
35(e)(1) of such Code is amended by adding at the end the following:
``For purposes of this subparagraph and clauses (ii), (iii), and (iv)
of subparagraph (F), such term does not include any insurance unless
the premiums for such insurance are restricted based on a community
rating system (determined other than on the basis of age).''.
(c) Clarification of Congressional Intent To Limit Use of
Individual Health Insurance Coverage Option.--Section 35(e)(1)(J)
(relating to qualified health insurance) is amended in the matter
preceding clause (i), by inserting ``, but only'' after ``under
individual health insurance''.
(d) Conforming Amendments.--Section 173(f)(2) of the Workforce
Investment Act of 1998 (29 U.S.C. 2918(f)(2)) is amended--
(1) in subparagraph (A)(x), by adding at the end the
following: ``Such term does not include any insurance unless
the premiums for such insurance are restricted based on a
community rating system (determined other than on the basis of
age).''; and
(2) in subparagraph (B)--
(A) in the matter preceding subclause (I), by
inserting ``, but only'' after ``under individual
health insurance''; and
(B) in clause (i), by striking ``clauses (ii)
through (viii) of subparagraph (A)'' and inserting
``subparagraph (A) (other than clauses (i), (x), and
(xi) thereof)''.
SEC. 10. ALIGNMENT OF COBRA COVERAGE WITH TAA PERIOD FOR TAA-ELIGIBLE
INDIVIDUALS.
(a) ERISA.--Section 605(b) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1165(b)) is amended--
(1) in the subsection heading, by inserting ``and
Coverage'' after ``Election''; and
(2) in paragraph (2)--
(A) in the paragraph heading, by inserting ``and
period'' after ``Commencement'';
(B) by striking ``and shall'' and inserting ``,
shall''; and
(C) by inserting ``, and in no event shall the
maximum period required under section 602(2)(A) be less
than the period during which the individual is a TAA-
eligible individual'' before the period at the end.
(b) Internal Revenue Code of 1986.--Section 4980B(f)(5)(C) of the
Internal Revenue Code of 1986 is amended--
(1) in the subparagraph heading, by inserting ``and
coverage'' after ``election''; and
(2) in clause (ii)--
(A) in the clause heading, by inserting ``and
period'' after ``Commencement'';
(B) by striking ``and shall'' and inserting ``,
shall''; and
(C) by inserting ``, and in no event shall the
maximum period required under paragraph (2)(B)(i) be
less than the period during which the individual is a
TAA-eligible individual'' before the period at the end.
(c) Public Health Service Act.--Section 2205(b) of the Public
Health Service Act (42 U.S.C. 300bb-5(b)) is amended--
(1) in the subsection heading, by inserting ``and
Coverage'' after ``Election''; and
(2) in paragraph (2)--
(A) in the paragraph heading, by inserting ``and
period'' after ``Commencement'';
(B) by striking ``and shall'' and inserting ``,
shall''; and
(C) by inserting ``, and in no event shall the
maximum period required under section 2202(2)(A) be
less than the period during which the individual is a
TAA-eligible individual'' before the period at the end.
SEC. 11. NOTICE REQUIREMENTS.
Section 7527 of the Internal Revenue Code of 1986 (relating to
advance payment of credit for health insurance costs of eligible
individuals), as amended by section 3(b), is amended by adding at the
end the following new subsection:
``(f) Inclusion of Certain Information.--The notice by the
Secretary (or by any person or entity designated by the Secretary) that
an individual is eligible for a qualified health insurance costs credit
eligibility certificate shall include--
``(1) the name, address, and telephone number of the State
office or offices responsible for determining that the
individual is eligible for such certificate and for providing
the individual with assistance with enrollment in qualified
health insurance (as defined in section 35(e)),
``(2) a list of the coverage options that are treated as
qualified health insurance (as so defined) by the State in
which the individual resides, and
``(3) in the case of a TAA-eligible individual (as defined
in section 4980B(f)(5)(C)(iv)(II)), a statement informing the
individual that the individual has 63 days from the date that
is 5 days after the postmark date of such notice to enroll in
such insurance without a lapse in creditable coverage (as
defined in section 9801(c)).''.
SEC. 12. ANNUAL REPORT ON ENHANCED TAA BENEFITS.
Not later than October 1 of each year (beginning in 2004) the
Secretary of the Treasury, after consultation with the Secretary of
Labor, shall report to the Committee on Finance and the Committee on
Health, Education, Labor, and Pensions of the Senate and the Committee
on Ways and Means and the Committee on Education and the Workforce of
the House of Representatives the following information with respect to
the most recent taxable year ending before such date:
(1) The total number of participants utilizing the health
insurance tax credit under section 35 of the Internal Revenue
Code of 1986, including a measurement of such participants
identified--
(A) by State, and
(B) by coverage under COBRA continuation provisions
(as defined in section 9832(d)(1) of such Code) and by
non-COBRA coverage (further identified by group and
individual market).
(2) The range of monthly health insurance premiums offered
and the average and median monthly health insurance premiums
offered to TAA-eligible individuals (as defined in section
4980B(f)(5)(C)(iv)(II) of such Code) under COBRA continuation
provisions (as defined in section 9832(d)(1) of such Code),
State-based continuation coverage provided under a State law
that requires such coverage, and each category of coverage
described in section 35(e)(1) of such Code, identified by State
and by the actuarial value of such coverage and the specific
benefits provided and cost-sharing imposed under such coverage.
(3) The number of States applying for and receiving
national emergency grants under section 173(f) of the Workforce
Investment Act of 1998 (29 U.S.C. 2918(f)) and the time
necessary for application approval of such grants.
(4) The cost of administering the health credit program
under section 35 of such Code, by function, including the cost
of subcontractors.
SEC. 13. EXTENSION OF NATIONAL EMERGENCY GRANTS.
(a) In General.--Section 173(f) of the Workforce Investment Act of
1998 (29 U.S.C. 2918(f)) is amended--
(1) by striking paragraph (1) and inserting the following
new paragraph:
``(1) Use of funds.--
``(A) Health insurance coverage for eligible
individuals in order to obtain qualified health
insurance that has guaranteed issue and other consumer
protections.--Funds made available to a State or entity
under paragraph (4)(A) of subsection (a) shall be used
to provide an eligible individual described in
paragraph (4)(C) and such individual's qualifying
family members with health insurance coverage for the
3-month period that immediately precedes the first
eligible coverage month (as defined in section 35(b) of
the Internal Revenue Code of 1986) in which such
eligible individual and such individual's qualifying
family members are covered by qualified health
insurance that meets the requirements described in
clauses (i) through (iv) of section 35(e)(2)(A) of the
Internal Revenue Code of 1986 (or such longer minimum
period as is necessary in order for such eligible
individual and such individual's qualifying family
members to be covered by qualified health insurance
that meets such requirements).
``(B) Additional uses.--Funds made available to a
State or entity under paragraph (4)(A) of subsection
(a) may be used by the State or entity for the
following:
``(i) Health insurance coverage.--To assist
an eligible individual and such individual's
qualifying family members with enrolling in
health insurance coverage and qualified health
insurance or paying premiums for such coverage
or insurance.
``(ii) Administrative expenses and start-up
expenses to establish group health plan
coverage options for qualified health
insurance.--To pay the administrative expenses
related to the enrollment of eligible
individuals and such individuals' qualifying family members in health
insurance coverage and qualified health insurance, including--
``(I) eligibility verification
activities;
``(II) the notification of eligible
individuals of available health
insurance and qualified health
insurance options;
``(III) processing qualified health
insurance costs credit eligibility
certificates provided for under section
7527 of the Internal Revenue Code of
1986;
``(IV) providing assistance to
eligible individuals in enrolling in
health insurance coverage and qualified
health insurance;
``(V) the development or
installation of necessary data
management systems; and
``(VI) any other expenses
determined appropriate by the
Secretary, including start-up costs and
on going administrative expenses, in
order for the State to treat the
coverage described in subparagraph (C),
(D), (E), or (F)(i) of section 35(e)(1)
of the Internal Revenue Code of 1986,
or, only if the coverage is under a
group health plan, the coverage
described in subparagraph (F)(ii),
(F)(iii), (F)(iv), (G), or (H) of such
section, as qualified health insurance
under that section.
``(iii) Outreach.--To pay for outreach to
eligible individuals to inform such individuals
of available health insurance and qualified
health insurance options, including outreach
consisting of notice to eligible individuals of
such options made available after the date of
enactment of this clause and direct assistance
to help potentially eligible individuals and
such individual's qualifying family members
qualify and remain eligible for the credit
established under section 35 of the Internal
Revenue Code of 1986 and advance payment of
such credit under section 7527 of such Code.
``(iv) Bridge funding.--To assist
potentially eligible individuals purchase
qualified health insurance coverage prior to
issuance of a qualified health insurance costs
credit eligibility certificate under section
7527 of the Internal Revenue Code of 1986 and
commencement of advance payment, and receipt of
expedited payment, under subsections (a) and
(e), respectively, of that section.
``(C) Rule of construction.--The inclusion of a
permitted use under this paragraph shall not be
construed as prohibiting a similar use of funds
permitted under subsection (g).''; and
(2) by striking paragraph (2) and inserting the following
new paragraph:
``(2) Qualified health insurance.--For purposes of this
subsection and subsection (g), the term `qualified health
insurance' has the meaning given that term in section 35(e) of
the Internal Revenue Code of 1986.''.
(b) Funding.--Section 174(c)(1) of the Workforce Investment Act of
1998 (29 U.S.C. 2919(c)(1)) is amended--
(1) in the paragraph heading, by striking ``Authorization
and appropriation for fiscal year 2002'' and inserting
``Appropriations''; and
(2) by striking subparagraph (A) and inserting the
following new subparagraph:
``(A) to carry out subsection (a)(4)(A) of section
173--
``(i) $10,000,000 for fiscal year 2002; and
``(ii) $300,000,000 for the period of
fiscal years 2005 through 2007; and''.
(c) Report Regarding Failure To Comply With Requirements for
Expedited Approval Procedures.--Section 173(f) of the Workforce
Investment Act of 1998 (29 U.S.C. 2918(f)) is amended by adding at the
end the following new paragraph:
``(8) Report for failure to comply with requirements for
expedited approval procedures.--If the Secretary fails to make
the notification required under clause (i) of paragraph (3)(A)
within the 15-day period required under that clause, or fails
to provide the technical assistance required under clause (ii)
of such paragraph within a timely manner so that a State or entity may
submit an approved application within 2 months of the date on which the
State or entity's previous application was disapproved, the Secretary
shall submit a report to Congress explaining such failure.''.
(d) Technical Amendment.--Effective as if included in the enactment
of the Trade Act of 2002 (Public Law 107-210; 116 Stat. 933),
subsection (f) of section 203 of that Act is repealed.
SEC. 14. EXTENSION OF FUNDING FOR OPERATION OF STATE HIGH RISK HEALTH
INSURANCE POOLS.
(a) Extension of Seed Grants.--Section 2745 of the Public Health
Service Act (42 U.S.C. 300gg-45) is amended--
(1) in subsection (a), in the subsection heading by
inserting ``Extension of'' before ``Seed''; and
(2) in subsection (c)(1), by striking ``$20,000,000'' and
all that follows through ``2003'' and inserting ``$15,000,000
for the period of fiscal years 2005 and 2006''.
(b) Funds for Operations.--Section 2745 of the Public Health
Service Act (42 U.S.C. 300gg-45) is amended--
(1) in subsection (b)--
(A) in the subsection heading by striking
``Matching''; and
(B) by striking paragraph (2) and inserting the
following new paragraph:
``(2) Allotment.--The amounts appropriated under subsection
(c)(2) for a fiscal year shall be made available to the States
(or the entities that operate the high risk pool under
applicable State law) as follows:
``(A) An amount equal to 50 percent of the
appropriated amount for the fiscal year shall be
allocated in equal amounts among each eligible State
that applies for assistance under this subsection.
``(B) An amount equal to 25 percent of the
appropriated amount for the fiscal year shall be
allocated among the States so that the amount provided
to a State bears the same ratio to such available
amount as the number of uninsured individuals in the
State bears to the total number of uninsured
individuals in all States (as determined by the
Secretary).
``(C) An amount equal to 25 percent of the
appropriated amount for the fiscal year shall be
allocated among the States so that the amount provided
to a State bears the same ratio to such available
amount as the number of individuals enrolled in health
care coverage through the qualified high risk pool of
the State bears to the total number of individuals so
enrolled through qualified high risk pools in all
States (as determined by the Secretary).''; and
(2) in subsection (c)(2), by striking ``$40,000,000'' and
all that follows through the period and inserting ``$75,000,000
for each of fiscal years 2005 through 2009 to make allotments
under subsection (b)(2).''.
(c) Definitions.--Section 2745 of the Public Health Service Act (42
U.S.C. 300gg-45) is amended--
(1) in subsection (d), by inserting after ``2744(c)(2)''
the following: ``, except that with respect to subparagraph (A)
of such section a State may elect to provide for the enrollment
of eligible individuals through an acceptable alternative
mechanism,''; and
(2) by adding at the end the following new subsection:
``(e) Standard Risk Rate.--In subsection (b)(1)(A), the term
`standard risk rate' means a rate--
``(1) determined under the State high risk pool by
considering the premium rates charged by other health insurers
offering health insurance coverage to individuals in the
insurance market served;
``(2) that is established using reasonable actuarial
techniques; and
``(3) that reflects anticipated claims experience and
expenses for the coverage involved.''.
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