A revised tax bill unveiled Wednesday, June 16, by Senate Finance Committee Chairman Max Baucus, D-Montana, does not include an extension of federal COBRA premium subsidies, further decreasing the likelihood that Congress will extend the subsidy.
In March, the Senate approved a tax bill, H.R. 4213, extending the subsidy to employees laid off through year-end. In the absence of congressional action, the 15-month, 65 percent subsidy is not available to employees laid off after May 31.
But the House in May stripped the subsidy and its projected cost of nearly $8 billion from the measure before passing it and sending the bill back to the Senate.
While Senate Democratic leaders had discussed reducing the extension to November 30, a tax bill that Baucus unveiled last week omitted the subsidy, while a subsidy extension also is not in the latest version.
An amendment to the tax bill proposed by Sen. Robert Casey, D-Pennsylvania, would extend the subsidy to employees laid off through November 30. But the Senate has not yet taken up the Casey amendment, which faces an uphill battle to win approval as Senate Democratic leaders look for ways to reduce the cost of the overall bill.
The revamped bill, like the previous version, includes provisions to give employers more time to fund pension obligations, but excludes a provision in the tax bill passed by the House that would beef up disclosure of 401(k) plan fees to participants.