FROM THE OFFICE OF PUBLIC AFFAIRS

May 20, 2004
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Kansas Makes Federal Health Coverage Tax Credit Available

Today, Treasury Secretary John Snow applauded Governor Kathleen Sebelius for signing legislation that allows the state's Uninsurable Health Insurance Plan to qualify for the Health Coverage Tax Credit Program (HCTC). The program will help cover the cost of health insurance premiums for many Kansas residents.

 "I would like to thank the Republicans and Democrats in the legislature who voted for this legislation and Governor Sebelius for signing it," stated Treasury Secretary John Snow. "I would also like to thank Insurance Commissioner Sandy Praeger, Department of Human Resources Secretary Jim Garner and other interested parties in Kansas who have worked so hard to make the Health Coverage Tax Credit program available to over 1,400 workers and their families. I commend them for their leadership in enacting legislation that makes the state's Uninsurable Health Insurance Plan available to those eligible for TAA benefits. The HCTC program is a real innovation in tax policy, one that we hope will lead the way for other innovations that help real people obtain the health care coverage that they need in a flexible and reliable way. We want to ensure that those who qualify for the credit get the help they need as quickly as possible."

The Trade Adjustment Assistance Act President Bush signed into law in 2002 included the new Health Coverage Tax Credit (HCTC). Recipients can receive the HCTC either in advance, to help pay qualified health plan premiums as they come due, or in a lump sum when they file their federal tax returns. The HCTC advance payments program began nationally in August 2003. This program provides an advanced payment of 65% of the premium cost for a qualified health plan for individuals who are eligible to receive Trade Adjustment Assistance (TAA) benefits or certain individuals who receive pension benefit payments from the Pension Benefit Guaranty Corporation (PBGC).

In order to receive the credit, eligible individuals must enroll in qualified health insurance, such as a COBRA health plan or State Qualified Health Plan (SQHP). Thirty-six states and the District of Columbia have SQHPs that will enable more than 205,000 of those potentially eligible for the HCTC to purchase health coverage. Nationwide, there are nearly 250,000 individuals potentially eligible for the HCTC.

For more information on a particular state and the health insurance programs that qualify, please visit the HCTC website at www.irs.gov and enter IRS Keyword: HCTC.