reduction provided under such section after termination of eligibility under such subsection. (b) Reasonable cause exception No penalty shall be imposed under subsection (a) 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 COBRA premium assistance. . (14) Coordination with HCTC (A) In general Section 35(g)(9) of the Internal Revenue Code of 1986 is amended to read as follows: (9) COBRA premium assistance In the case of an assistance eligible individual who receives premium reduction for COBRA continuation coverage under section 70307 of the Take Responsibility for Workers and Families 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. (15) Exclusion of COBRA 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 139B the following new section: 139I. COBRA premium assistance In the case of an assistance eligible individual (as defined in section 70307 of the Take Responsibility for Workers and Families Act), gross income does not include any premium reduction provided under subsection (a) of such section. . (B) Clerical amendment The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139B the following new item: Sec. 139I. COBRA premium assistance. . (C) Effective date The amendments made by this