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Health Coverage Tax Credit: ETA Provides Information on Expiration of Credit and Advises Steps for Cooperating State Agencies to Take in Assisting Job Seekers and Workers
Dec 16, 2013

The Employment and Training Administration has issued Training and Employment has issued Training and Employment Notice (TEN) 15-13. This TEN provides information and expand awareness of the expiration of the Health Coverage Tax Credit (HCTC) Program on January 1, 2014, and to advise Cooperating State Agencies (CSAs) in assisting job seekers and workers.

The background section of the TEN notes:

The HCTC is not a government health insurance program; it is a Federal tax credit administered by the Internal Revenue Service (IRS), as described on the IRS HCTC Web site: www.irs.gov/hctc. The Trade Adjustment Assistance Reform Act of 2002 (Trade Act of 2002) created the Health Coverage Tax Credit (HCTC), an advanceable, refundable tax credit for a percentage of the premiums paid for specified types of health insurance coverage (including Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage). The HCTC is available to individuals in the TAA program identified as “eligible TAA recipients” or “eligible Alternative TAA recipients” under section 246 of the Trade Act (including “eligible RTAA recipients”) (referred to collectively in this guidance as “eligible TAA recipients”). This benefit is also extended to certain individuals who are receiving pension payments from the Pension Benefit Guaranty Corporation (PBGC). Individuals who are eligible for the HCTC may choose to have the amount of the credit paid on a monthly basis to their health coverage provider as it becomes due, or may claim the tax credit on their income tax returns at the end of the year. The Trade Adjustment Assistance Extension Act of 2011 (Trade Act of 2011) increased the percentage of the HCTC, extended eligibility for qualifying family members, and extended COBRA coverage. These changes are effective through January 1, 2014.

The HCTC currently pays 72.5 percent of a qualified health plan premium for eligible TAA recipients and other individuals. Individuals may receive HCTC either as their monthly health plan premium becomes due (Monthly HCTC) or as a credit on their Federal tax return (Yearly HCTC).

The TEN further notes:

The HCTC expires on January 1, 2014. Beginning January 1, 2014, every eligible TAA recipient will be responsible for paying their full health coverage premiums without HCTC. Further, TAA recipients are eligible for COBRA coverage extensions for as long as they have TAA eligibility or until January 1, 2014. Beginning January 1, 2014, new health coverage options will be available in every state; all individuals will have a range of options in Health Insurance Marketplaces and may be eligible for new tax credits for health insurance or expanded Medicaid options.

The TEN provides a number of steps that CSAs should take in advising TAA recipients.