The Health Coverage Tax Credit Program Frontline Training

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Contents

» What is the HCTC

» Eligibility Requirements

» Qualifying Health Plan Types

» Family Member Eligibility

» Receiving the HCTC Monthly vs. Yearly

» HCTC Monthly Program Registration

» Claiming the HCTC as a Yearly Tax Credit

» What’s New with the HCTC Program

» Questions and Contact Information

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What is the Health Coverage Tax Credit (HCTC)

The HCTC is a federal tax credit that pays 80% of health insurance premiums - making health insurance more affordable for trade affected workers, PBGC payees and their families.

To receive the tax credit:

Individuals and/or family members must be eligible

Their health plan must

qualify

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Eligibility Requirements

Individuals who have recently lost their job as the result of foreign trade or experienced a pension bankruptcy or may be eligible.

The HCTC is available to individuals if they fall into one of the following categories:

1. Trade Adjustment Assistance (TAA) recipient including Alternative TAA (ATAA), or Reemployment TAA (RTAA)

2. Pension Benefit Guaranty Corporation (PBGC) payee who is 55 years old or older

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Qualifying Health Plan Types

The most common types are:

1. COBRA: individuals must pay more than 50% of the total monthly premium.

2. State-Qualified Health Plans: Plans that a state’s Department of Insurance approves as meeting certain consumer protection guidelines in the 2002 Trade Act. Please refer to the HCTC website for the qualified health plans offered by state.

3. *Spousal Coverage: individuals must pay more than 50% of the total monthly premium with after-tax dollars.

The HCTC Program does not provide health coverage. Individuals will need to obtain health insurance that qualifies for the program.

* Spousal coverage can only be claimed at the end of the year when individuals file their federal tax return, unless they are on their spouse’s COBRA plan.

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The spouse and dependents of TAA recipients and PBGC payees are also able to receive the HCTC.

Family members may receive the HCTC if they:

Are a spouse or claimed as a dependent on the eligible individual’s federal tax return

Are enrolled in a qualified health plan

Module 2: Slide 6

*Qualified Family Members must meet additional requirements to be eligible for the HCTC.

Family Member Eligibility

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Receiving the HCTC Monthly vs. Yearly

The tax credit can be received monthly or yearly.

Monthly»The Monthly HCTC Program allows eligible individuals to receive the credit towards monthly health care premiums. Once enrolled, the participant pays 20% , the HCTC Program/IRS adds 80% and sends the full payment to the participants health plan.

Yearly »The Yearly HCTC allows eligible individuals to receive the tax credit when they file their Federal tax return. The eligible individuals pays 100% of health insurance premiums throughout the year and claims the 80% HCTC on their federal tax return.

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HCTC Monthly Program Registration

Completing the Monthly HCTC Registration Form is required to participate in the monthly program.

The Monthly HCTC Registration Form requests the following information:

» General Requirements

» Eligibility

» Qualified Health Plan Information

» Supporting Health Plan Documentation

» A Third Party Designee

» Signature and Date

» Reimbursement Requests

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Claiming the HCTC as a Yearly Tax Credit

Completing IRS form 8885 is required to claim the HCTC on a yearly basis.

Individuals must submit the following documentation along with their Federal tax return:

» IRS Form 8885

» Proof of payment made to a qualified health plan, such as cancelled checks throughout the year

» Any additional required documentation listed on IRS Form 8885

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What’s New with the HCTC Program

Due to recent legislative changes, the HCTC is now more affordable and accessible to trade affected workers and Pension Benefit Guarantee Corporation payees.

» The tax credit increased from 65% to 80%

» Individuals can receive a credit for payments made during enrollment

» Qualified family members may continue to receive the HCTC for up to 24 months

» COBRA benefits can be extended for HCTC participants

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Questions & Contact Information

The HCTC Program is here to help individuals.

» Contact us with questions or to request brochures• Email: wi.hctc.stakehldr.en@irs.gov

» Visit the HCTC website to download materials• Web Address: www.irs.gov/hctc

» Contact the HCTC Customer Contact Center• 1-866-628-HCTC (1-866-628-4282)• 1-866-626-4282 (TDD/TTY)