A bill to provide Federal payments for employers to encourage them to continue the provision of benefits under employer-sponsored health insurance plans for former employees who are currently unemployed, with tax penalties for employers who refuse to do so and to amend the Internal Revenue Code of 1954 to impose similar tax penalties in the future upon employers whose employer-sponsored health insurance plans do not include provision for such continuation of benefits.

Provides Federal payments to employers for the entire amount of the cost of continuation of benefits under employer- sponsored health insurance plans for former employees who are currently unemployed for a period of one year or until such former employee's unemployment compensation entitlement expires. Provides tax penalties for employers who refuse to continue such health benefit plans. Denies the income tax deduction presently allowed for payments by employers whose employer-sponsored health insurance plans do not include provision for such continuation of benefits.