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Congress renews health coverage tax credit

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Employees who lose their jobs due to foreign competition or worked for companies whose pension plans failed will again be eligible for federal health insurance premium subsidies under legislation given final congressional approval.

Under the measure, H.R. 1295, which the House of Representatives passed Thursday following earlier Senate approval, the federal government will pay 72.5% of premiums for health plan coverage, like COBRA, for people who were laid off from their jobs due to foreign competition, and for retirees ages 55 through 64 in pension plans that were taken over by the Pension Benefit Guaranty Corp.

The premium subsidy also will be available for plans offered through voluntary employee beneficiary associations set up for those who worked in such industries as steel and auto parts manufacturing that failed and went out of business.

However, the subsidies could not be used to offset health insurance premiums for plans offered in the public exchanges authorized by the 2010 health care reform law.

Known as the health coverage tax credit, the subsidy expired in 2013. The measure approved by federal lawmakers will extend the premium subsidy through the end of 2019.

President Barack Obama is expected to sign the measure soon.