Sec. 3. Amendments to the Internal Revenue Code of 1986
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Subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: The person to whom premiums are payable for continuation coverage under section 2(a)(1) of the Continuous Health Coverage for Workers Act shall be allowed as a credit against the tax imposed by section 3111(a), or so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(a), for each calendar quarter an amount equal to the premiums not paid by assistance eligible individuals for such coverage by reason of such section 2(a)(1) with respect to such calendar quarter.
For purposes of subsection (a), except as otherwise provided by the Secretary, the person to whom premiums are payable under such continuation coverage shall be treated as being— in the case of any group health plan which is a multiemployer plan (as defined in section 3(37) of the Employee Retirement Income Security Act of 1974), the plan, in the case of any group health plan not described in paragraph (1)— which provides church plan continuation coverage described in section 2(a)(1)(A)(ii), furlough continuation coverage described in section 2(a)(1)(A)(iii) of the Continuous Health Coverage for Workers Act or subject to the COBRA continuation provisions contained in— this title, the Employee Retirement Income Security Act of 1974, the Public Health Service Act, or title 5, United States Code, or under which some or all of the coverage is not provided by insurance, the employer maintaining the plan, and in the case of any group health plan not described in paragraph
(1)or (2), the insurer providing the coverage under the group health plan. The credit allowed by subsection
(a)with respect to any calendar quarter shall not exceed the tax imposed by section 3111(a), or so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(a), for such calendar quarter (reduced by any credits allowed under subsections
(e)and
(f)of section 3111, sections 7001 and 7003 of the Families First Coronavirus Response Act, section 2301 of the CARES Act, and sections 20204 and 20212 of the COVID–19 Tax Relief Act of 2020 for such quarter) on the wages paid with respect to the employment of all employees of the employer. If the amount of the credit under subsection
(a)exceeds the limitation of paragraph
(1)for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b). In anticipation of the credit, including the refundable portion under subparagraph (A), the credit may be advanced, according to forms and instructions provided by the Secretary, up to an amount calculated under subsection
(a)through the end of the most recent payroll period in the quarter. The Secretary shall waive any penalty under section 6656 for any failure to make a deposit of the tax imposed by section 3111(a), or so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under section 3111(a), if the Secretary determines that such failure was due to the anticipation of the credit allowed under this section. For purposes of section 1324 of title 31, United States Code, any amounts due to an employer under this paragraph shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. In the case of an individual who for any month is an assistance eligible individual described in subparagraph
(B)or
(C)of section 2(a)(3) of the Continuous Health Coverage for Workers Act with respect to any coverage, the credit determined with respect to such individual under subsection
(a)for any such month ending during a calendar quarter shall not exceed the amount of premium the individual would have paid for a full month of such coverage for the month preceding the first month for which an individual is such an assistance eligible individual. For purposes of this section, the term person includes any governmental entity or Indian tribal government (as defined in section 139E(c)(1)). For purposes of chapter 1, the gross income of any person allowed a credit under this section shall be increased for the taxable year which includes the last day of any calendar quarter with respect to which such credit is allowed by the amount of such credit. No amount for which a credit is allowed under this section shall be taken into account as qualified wages under section 2301 of the CARES Act or as qualified health plan expenses under section 7001(d) or 7003(d) of the Families First Coronavirus Response Act. Each person entitled to reimbursement under subsection
(a)for any period shall submit such reports (at such time and in such manner) as the Secretary may require, including— an attestation of involuntary termination of employment, reduction of hours, or furloughing, for each assistance eligible individual on the basis of whose termination, reduction of hours, or furloughing entitlement to reimbursement is claimed under subsection (a), a report of the amount of payroll taxes offset under subsection
(a)for the reporting period, and a report containing the TINs of all covered employees, the amount of subsidy reimbursed with respect to each employee, and a designation with respect to each employee as to whether the subsidy reimbursement is for coverage of 1 individual or 2 or more individuals. The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out this section, including— the requirement to report information or the establishment of other methods for verifying the correct amounts of reimbursements under this section, the application of this section to group health plans that are multiemployer plans (as defined in section 3(37) of the Employee Retirement Income Security Act of 1974), to allow the advance payment of the credit determined under subsection (a), subject to the limitations provided in this section, based on such information as the Secretary shall require, to provide for the reconciliation of such advance payment with the amount of the credit at the time of filing the return of tax for the applicable quarter or taxable year, and with respect to the application of the credit to third-party payors (including professional employer organizations, certified professional employer organizations, or agents under section 3504). In the case of any period of coverage (as defined in section 2(l) of the Continuous Health Coverage for Workers Act ) beginning on or after the date of enactment of this section, no credit shall be allowed under this section with respect to any coverage that includes coverage of an abortion (except as described in section 507(a) of division A of Public Law 116–94 ). . There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 ) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 ( 45 U.S.C. 231n–1(a) ) amounts equal to the reduction in revenues to the Treasury by reason of this subsection (without regard to this paragraph). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund or Account had this section not been enacted. 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. 6432. Continuation coverage premium assistance. . The amendments made by this subsection shall apply to premiums to which section 2(a)(1)(A) applies. In the case of an assistance eligible individual who pays, with respect any period of coverage to which section 2(a)(1)(A) applies, the amount of the premium for such coverage that the individual would have (but for this Act) been required to pay, the person to whom such payment is payable shall reimburse such individual for the amount of such premium paid. A person to which subparagraph
(A)applies shall be allowed a credit in the manner provided under section 6432 of the Internal Revenue Code of 1986 for any payment made to the employee under such subparagraph. Any person to which subparagraph
(A)applies shall make the payment required under such clause to the individual not later than 60 days after the date on which such individual elects continuation coverage under section 2(a)(1) of the Continuous Health Coverage for Workers Act . Part I of subchapter B of chapter 68 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: Except in the case of failure described in subsection
(b)or (c), any person required to notify a group health plan under section 2(a)(2)(B) of the Continuous Health Coverage for Workers 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 $250. In the case of any such failure that is fraudulent, such person shall pay a penalty equal to the greater of— $250, or 110 percent of the premium assistance provided under section 2(a)(1)(A) of the Continuous Health Coverage for Workers Act after termination of eligibility under such section. No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect. . The table of sections of part I of subchapter B of chapter 68 of such Code is amended by adding at the end the following new item: Sec. 6720C. Penalty for failure to notify health plan of cessation of eligibility for continuation coverage premium assistance. . Section 35(g)(9) of the Internal Revenue Code of 1986 is amended to read as follows: In the case of an assistance eligible individual who receives premium assistance for continuation coverage under section 2(a)(1) of the Continuous Health Coverage for Workers Act for any month during the taxable year, such individual shall not be treated as an eligible individual, a certified individual, or a qualifying family member for purposes of this section or section 7527 with respect to such month. . The amendment made by paragraph
(1)shall apply to taxable years ending after the date of the enactment of this Act. Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139H the following new section: In the case of an assistance eligible individual (as defined in subsection (a)(3) of section 2 of the Continuous Health Coverage for Workers Act ), gross income does not include any premium assistance provided under subsection (a)(1) of such section. . The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139H the following new item: Sec. 139I. Continuation coverage premium assistance. . The amendments made by this subsection shall apply to taxable years ending after the date of the enactment of this Act.
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Sec. 3
Amendments to the Internal Revenue Code of 1986
Cite45 USC 231n–1(a)
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