failure In the case of any such failure that is fraudulent, such person shall pay a penalty of 110 percent of the premium reduction provided under such section after termination of eligibility under such subsection. (c) Reasonable cause exception No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect. . (B) Clerical amendment The table of sections of part I of subchapter B of chapter 68 of such Code is amended by adding at the end the following new item: Sec. 6720C. Penalty for failure to notify health plan of cessation of eligibility for continuation coverage premium assistance. . (16) Coordination with HCTC (A) In general Section 35(g)(9) of the Internal Revenue Code of 1986 is amended to read as follows: (9) Continuation coverage premium assistance In the case of an assistance eligible individual who receives premium reduction for continuation coverage under section 2(a)(1) of the Worker Health Coverage Protection Act for any month during the taxable year, such individual shall not be treated as an eligible individual, a certified individual, or a qualifying family member for purposes of this section or section 7527 with respect to such month. . (B) Effective date The amendment made by subparagraph (A) shall apply to taxable years ending after the date of the enactment of this Act. (17) Exclusion of continuation coverage premium assistance from gross income (A) In general Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139H the following new section: 139I. Continuation coverage premium assistance In the case of an assistance eligible individual (as defined in subsection (a)(3) of section 2 of the Worker Health Coverage Protection Act), gross income does not include any premium reduction provided under subsection (a)(1) of such section. . (B) Clerical amendment The table of sections for part III of subchapter B of chapter 1 of such Code is