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Health Coverage Tax Credit (HCTC) NEGs

The Trade Act of 2002 amended WIA by adding Section 173(g), and appropriated funds to permit the use of NEGs to provide appropriate qualified health coverage assistance for eligible TAA (TRA) recipients, certain TAA individuals who have not exhausted UI benefits, ATAA wage subsidy participants, and certain PBGC recipients.

  • Trade Program: Health Coverage Tax Credit (HCTC) Infrastructure NEG projects help States develop an infrastructure in support of the implementation and operation of the HCTC or health insurance coverage assistance through the NEG "bridge" program.
    "Bridge" projects are designed to help States provide health coverage assistance through qualified health plans for trade-certified workers who are TAA Readjustment Assistance (TRA) recipients (including those who would be if they had exhausted UI); Alternative Trade Adjustment Assistance (ATAA) wage-subsidy recipients; as well as certain Pension Benefit Guaranty Corporation (PBGC) recipients.
  • Health Insurance Premiums: ETA's policy is that the limited resources available for regular NEGs will not be awarded to pay for health insurance premiums for dislocated workers who do not qualify for the HCTC program. NEG supportive service funds may be used to pay for emergency medical treatment and needs-related payments--where authorized by local workforce investment boards for the Dislocated Worker formula program. This income support can be used by participants to pay for insurance premiums and other personal expenses.

The 70-percent dislocated worker program formula *expenditure rate must be met to apply for this type of NEG application.

*Outlays (expenditures) mean charges made to the project or program. They may be reported on a cash or accrual basis. For reports prepared on a cash basis, outlays are the sum of actual cash disbursement for direct charges for goods and services, the amount of indirect expense incurred, the value of in-kind contributions applied, and the amount of cash advances and payments made to contractors and subgrantees. [29 CFR 97.3]

Relevant Guidance: TEGL 16-03