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Latest News - Recovery Act Changes the HCTC
The Trade Adjustment Assistance Health Coverage Improvement Act was recently passed as part of the American Recovery and Reinvestment Act of 2009. The HCTC changed as a result of this new law.
New! HCTC Reimbursement Credits are Now Available
Newly-enrolled participants can now request to receive reimbursement for premiums paid to qualified health insurance while eligible and enrolling in the monthly HCTC Program. If the request is approved, participants will receive the reimbursement as a credit on their monthly HCTC account. To find out more, visit the Reimbursement Request page.
The HCTC pays a greater portion of your health insurance costs. In May 2009, the tax credit increased from 65% to 80% of qualified health insurance premiums, allowing participants to pay only 20% for health insurance each month.
Training and waiver requirements changed for certain TAA recipients, making it easier to continue to be eligible for the HCTC.
COBRA benefits have been extended for HCTC-eligible individuals through the timeframes listed below (but not beyond December 31, 2010). Employers are responsible for extending COBRA benefits for these individuals and should check with their counsel if they have questions about the new law.
- Eligible TAA, RTAA and ATAA recipients can receive COBRA for as long as they continue to receive TAA benefits.
- PBGC benefit recipients can receive COBRA as a lifetime benefit, and in the event of the benefit recipient's death, their surviving spouse and dependents can receive COBRA for an additional 24 months.
The new 65% COBRA Premium Reduction Program can affect an individual's eligibility for the HCTC during the same month. If you receive a 65% COBRA Premium Reduction through your former employer you will not be eligible to receive the HCTC during that same month. If you wish to recieve the HCTC and are already recieving the COBRA Premium Reduction, you can switch by opting out fo the COBRA Premium Reduction program prior to registering for the monthly HCTC Program.
Coming Soon ... The HCTC Will Soon be Available to Your Family Members for a Longer Period of Time
Beginning in January 2010, qualified family members may continue receiving the HCTC for up to 24 months (but not beyond December 31, 2010) after the primary eligible individual experiences the following life events:
- Enrollment in Medicare
- Divorce
- Death
NOTE: The Trade Adjustment Assistance Health Coverage Improvement Act of 2009 expires on December 31, 2010. At this time, the changes to the HCTC - including the new timeframes for extended benefits - are only valid for the remainder of 2009 and 2010.
Need More Information About These Changes?
Read more about these changes by reviewing the Frequently Asked Questions about the ARRA changes.
For more information about the new COBRA Premium Reduction program, visit the DOL website.
The HCTC Program is working quickly to provide you with detailed information about these changes, including information on other provisions of the stimulus law that affect the HCTC. New information will be posted as it is available, so please refer back to this page for the latest information.
HCTC Overview
The HCTC helps certain trade-affected workers, retirees, and their families pay their health insurance premiums. The HCTC makes health coverage more affordable by allowing individuals to pay only 20% of their health insurance premiums each month.
The HCTC is a refundable tax credit - it is paid in full no matter how much federal income tax an eligible individual owes. The HCTC is available on a monthly basis to help individuals pay their health insurance costs as they become due or on a yearly basis when they file their federal tax return. The HCTC Program partners with various federal and state agencies and Health Plan Administrators (HPAs) to deliver the tax credit to eligible individuals.
History and Purpose of the HCTC
The HCTC began as a ground breaking tax credit program in 2002 and in 2009 was expanded as a result of the American Recovery and Reinvestment Act (ARRA). Described by some participants as “a lifesaver,” the Health Coverage Tax Credit (HCTC) is a federally funded tax credit that enables individuals to pay only 20% of their health insurance.
Nationwide, thousands of people are potentially eligible for the program. Some of them are displaced workers who are certified by the Department of Labor as eligible to receive Trade Readjustment Allowances under the Trade Adjustment Assistance Act (TAA). Others qualify because they receive benefits from the Pension Benefit Guaranty Corporation (PBGC) and are between 55 and 65 years of age.
Congress understood that losing one's health coverage could be as distressing as losing one's job or having one's pension taken over. The purpose of the HCTC, therefore, is to make health coverage more affordable for these groups of people who otherwise might not be insured. The HCTC is unique, because it is the first time a federal tax credit is being used to help people who are affected by trade or employers experiencing financial hardship afford health insurance coverage.
The HCTC was first made available on a monthly basis in August 2003, and on a yearly basis for Tax Year 2002. The HCTC Program continually makes operational improvements to better administer this pioneering tax credit.
Return to the HCTC Program home page.
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