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DEFINITIONS | REFERENCES | WEBSITE | INQUIRES

The Trade Reform Act of 2002 authorized a federal Health Coverage Tax Credit (HCTC) for individuals eligible to receive Trade Readjustment Allowances (TRA) under the Trade Adjustment Assistance ((TAA) Program. This includes individuals who are eligible for TRA weekly benefits but have not used up all of their unemployment insurance (UI) benefits.

The Health Coverage Tax Credit (HCTC) pays 65% of an eligible participant’s qualified health plan premium.  An eligible participant can receive HCTC either as an advance that pays 65% of their qualified health care premium each month as they come due, or they can claim the tax credit at the end of the year when filing their federal tax return.

To be eligible for the Health Coverage Tax Credit (HCTC) a participant must:

1. Be receiving a Trade Readjustment Allowance (TRA)* under the TAA program or be eligible for TRA except that they have not used up all of their unemployment insurance (UI) benefits; or
   

2. Be receiving “wage replacement” benefits under the Alternative Trade Assistance for Older Workers (ATAA) demonstration program; 
   or
   

3. Be an eligible Pension Benefit Guaranty Corporation (PBGC) pension recipient.

* For TRA eligibility, a participant must be enrolled in training or have a waiver from training issued no later than the 8^th week after certification or by the end of the 16^th week following the most recent qualifying separation, whichever is later. If a participant fails to meet the 8/16-week deadline then they are not eligible for TRA benefits and would not be eligible for HCTC.

In addition, a participant must be covered by a qualified health plan. A qualified health plan is one of the following:

• COBRA coverage, (a Consolidated Omnibus Budget Reconciliation Act  continuation provision); or

• A group health plan available through a spouse’s employer for which the employer pays less than 50 percent of the cost; or
  
  
• An individual health plan the worker enrolled in 30 days prior to their date of separation from the trade-impacted firm; or
  
  
• A state-qualified health plan. State qualified health plan information is available by calling the HCTC Customer Contact Center toll-free at 1-866-628-HCTC  (1-866-628-4282). TDD/TTY callers, please call 1-866-626-HCTC  (1-866-626-4282) between 7:00 AM to 7:00 PM Central time, Monday - Friday.

There are two ways to receive the tax credit:

1. Claim the credit at the end of the year on the income tax return packet using IRS Form 8885; or
   
   

2. Apply for advance credit. The advance credit assists with paying 65% of monthly health plan premiums as they become due.  Participants identified as candidates will receive an HCTC Program Kit in the mail.  They must complete the HCTC Registration form and send it along with required health plan documentation to the IRS-HCTC to register.

Generally it takes from four to six weeks after initial registration with the IRS-HCTC for the advance credit payments to begin.  Employment Security Department’s HCTC Gap Payment program may be able to help participants make their qualified health insurance premium payments during this time.

For HCTC benefit questions, participants are instructed to call the national HCTC / IRS Customer Contact Center toll free at 1-866-628-HCTC (toll free) or refer to the website at http:// www.irs.gov (Keyword: HCTC).  

Veteran's Priority of Services
The Trade Adjustment Assistance program will comply with the Jobs for Veterans Act, enacted into Public law 107-288 on November 2, 2002.  Covered veterans determined eligible for the TAA program shall receive priority over non veterans for the receipt of appropriate services provided under the TAA program.

DEFINITIONS

REFERENCES

• Trade Act of 2002  (P.L. 107-210)
• Training and Employment Guidance Letter (TEGL) No. 11-02, dated 10/10/02
• Training and Employment Guidance Letter (TEGL) No. 11-02, Change 1, dated 11/06/03
• Employment and Training Guidance Letter (TEGL) No. 11-02, Change 3, dated 05/25/06
• Unemployment Insurance Program Letter (UIPL) No. 02-03, dated 10/10/02
• Training and Employment Guidance Letter (TEGL) No. 5-03, dated 09/16/03

SUPERSEDES

None

WEBSITE

http://www.wa.gov/esd/policies

DIRECT INQUIRIES TO

Randy Bachman
Employment Security Department
Employment and Training Division, State Trade Coordinator
P.O. Box 9046, MS 6000
Olympia, WA 98507-9046
E-Mail: rbachman@esd.wa.gov
Telephone: (360) 438-3148
FAX: (360) 438-3174