Title III: Health Insurance Assistance for the Unemployed Act of 2009 (Sec. 3002)

The stimulus package provides:

• A 65% subsidy for COBRA continuation premiums for up to nine months for workers who have been involuntarily terminated, as well as for their families.



• A subsidy for health care continuation coverage if required by states for small employers.



• The subsidy for a worker who was involuntarily terminated between Sept. 1, 2008, and Dec. 31, 2009.



• The subsidy would terminate upon offer of any new employer-sponsored health care coverage or Medicare eligibility.



• Workers who were involuntarily terminated between Sept. 1, 2008, and enactment, but failed to initially elect COBRA coverage because it was unaffordable, would be given an additional 60 days to do so and receive the subsidy. This time shall be disregarded in determining a break for the purpose of pre-existing condition limitations.



• The employer may permit the assistance eligible beneficiary to elect different coverage that what s/he had prior to the termination event.



• To ensure that this assistance is targeted at workers who are most in need, participants must attest that their same year income will not exceed $125,000 for individuals and $250,000 for families.



• The Internal Revenue Code is amended to provide for a reimbursement to an entity of premiums (employer/plan sponsor) not paid by plan beneficiaries by treating such amounts as a credit against the requirement of such entity to make deposits of payroll taxes.



• The Secretary of the Treasury to pay the employer the amount of premiums not paid by plan beneficiaries if it exceeds the amount of such taxes.



• Requires notices of eligibility for COBRA coverage to include notice of availability of premium reduction. Sets forth notification requirements.



• Directs the Secretary of the Treasury to provide such rules, procedures, regulations, and other guidance as may be necessary and appropriate to prevent fraud and abuse.



• Establishes a penalty for a person's failure to notify a group health plan that he or she is no longer eligible for a premium reduction.



• Provides that gross income does not include any premium reduction provided for under this title.

(Sec. 3003) Amends title XIX (Medicaid) of the Social Security Act to allow states to provide Medicaid coverage to certain unemployed individuals and their families, including: (1) individuals who are receiving unemployment compensations benefits; (2) individuals who have exhausted such unemployment compensation benefits; (3) individuals who are involuntarily employed and were involuntarily separated from employment between specified dates, whose family gross income does not exceed a specified percentage of the income official poverty line; (4) individuals who are involuntarily employed and were involuntarily separated from employment between specified dates, who are members of households participating in the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008. Makes the federal medical assistance percentage (FMAP) 100% for items and services furnished to individuals eligible based on this section.