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Member, Beacon International Group, Ltd.
WASHINGTON—After a significant modification, Congress has given final approval to legislation that would give a six-week extension to a federal law that subsidizes health insurance premiums, such as for COBRA coverage, to workers who lose their jobs due to foreign competition and older retirees in failed pension plans.
Under H.R. 6517, originally introduced by Ways and Means Committee Chairman Rep. Sander Levin, D-Mich., eligible beneficiaries would continue to receive through Feb. 12, 2011, an 80% tax credit to partially offset the cost of health insurance coverage they purchase.
Under a previous version of the legislation, the 80% tax credit would have been extended through June 30, 2012. The extension was cut back on the Senate floor Wednesday to six weeks, and the House concurred with the change.
A 2002 law created the subsidy, known as the Health Coverage Tax Credit, and set the tax credit at 65%. The 2009 stimulus law raised the tax credit to 80%. Without an extension, the 80% subsidy would have been cut back to 65%, as of Jan. 1, 2011.
Aside from those who lose their jobs due to foreign competition, the subsidy is available to participants of at least age 55 whose pension plans have been taken over by the Pension Benefit Guaranty Corp.
President Barack Obama is expected to sign the measure shortly.