ELIGIBILITY OF RECIPIENT AND DEPENDENTS...
HCTC ELIGIBILITY
Two Groups are eligible for the HCTC Program
You may be eligible to elect the Health Coverage Tax Credit (HCTC) if you are one of the following:
- An eligible Trade Adjustment Assistance recipient, Alternative TAA recipient or Reemployment TAA recipient.
- An eligible Pension Benefit Guaranty Corporation (PBGC) payee between the ages of 55-65 and their dependents, or
- The family member(s) of an eligible TAA, ATAA or RTAA recipient or family member of a divorced or deceased PBGC payee who meets the requirements.
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Pension Benefit
Guaranty Corporation
TAA,
ATAA or RTAA
To qualify for the 72.5% HCTC benefit as a PBGC payee, recipients must have worked for a company whose defined-benefit pension plan was insured and then turned over to the PBGC. The PBGC assumes control of the defined-benefit plans when it determines that the plans must be terminated to protect the interests of participants or when employers demonstrate they could not remain in business unless the plan were terminated. The PBGC uses plan assets and its own insurance reserves to pay the pensions to the former workers and their survivors. In the event of the recipients death, the dependent would either receive the benefit as the new recipient or would continue as a qualified family member and receive the benefit for 24 months after the recipients death. If the deceased recipient had shared their pension with their surviving spouse, the surviving spouse would then take the place of the deceased recipient. The new information and age of the recipient would be listed with the surviving spouses information. Individuals who receive PBGC-paid pensions are eligible for the HCTC, provided they are between the ages of 55 and 64 years old but not yet entitled to Medicare.
To qualify for the TAA, ATAA or RTAA, a group of workers who have lost their jobs due to plants closing or their jobs offshored due to international trade. To qualify for TAA, a group or workers must petition the US Department of Labor to establish that their job loss was attributable to a qualified cause. If a Department of Labor investigation confirms the workers' claim, the workers are certified as eligible for TAA benefits and services.
TAA-certified workers are eligible for the HCTC on the basis of receipt of certain TAA benefits. They are eligible for the HCTC if the worker receives any of the following:
1.) Trade Re-adjustment Allowance
2.) Re-employment Trade Adjustment Assistance
3.) Alternative Trade Adjustment Assistance
The worker must be receiving cash benefits to be eligible. The worker qualifies for HCTC on the first day of a month if the worker received an eligible TAA benefit "for any day in that month or the prior month".
Eligibility Limitations
Click here for further details with the United States Department of Labor Q&A forTAA, ATAA or RTAA groups.
You may be eligible under the two groups described above, but still not qualify for the tax credit if you are enrolled in:
- a health plan maintained by the individual's employer or former employer
- if the employer or former employer pays more than 50% of the total premium;
- the Federal Employees Health Benefits Program (FEHBP)
- Medicare Part A and/or B
- Medicaid; or
- the State Children's Health Insurance Program (CHIP)
You are also not eligible for the HCTC Program if you are incarcerated or if you may be claimed as a dependent by another taxpayer.
Members and Qualifying Family Members
An eligible taxpayer may use the HCTC for health insurance that covers his or her spouse and any dependents who may be claimed on his or her tax return. Children are considered dependents if under the age of 26. A child with separated or divorced parents are considered dependents if the recipient is the custodial parent.
Family members or "dependents" are eligible as long as the retiree or TAA worker continues to meet the eligibility requirement to participate in the HCTC Program. It is not necessary for the retiree or TAA worker to enroll in the HCTC Program in order for dependents to participate in the HCTC Program and receive a subsidy for their healthcare. Each dependent is eligible to participate in the HCTC program as an individual if they choose (rules and qualifications of the member are kept with your file).
A qualified family member (QFM) is a dependent of a retiree that is limited to eligibility in the HCTC program for 24 months following a life event experience by the retiree or TAA worker, where the member loses eligibility for the HCTC program.
To qualify for the PBGC benefit, recipients must have worked for a firm whose defined-benefit pension plan was insured and then turned over to the PBGC. The PBGC assumes control of the defined-benefit plans when it determines that the plans must be terminated to protect the interests of participants or when employers demonstrate they could not remain in business unless the plan were terminated. The PGBC uses plan assets and its own insurance reserves to pay the pensions to the former workers and their survivors. In the event of the recipients death, the dependent would either receive the benefit as the new recipient or would continue as a qualified family member and receive the benefit for 24 months after the recipients death. If the deceased recipient had shared their pension with their surviving spouse, the surviving spouse would then take the place of the deceased recipient. The new information and age of the recipient would be listed with the surviving spouses information. Individuals who receive PBC-paid pensions are eligible for the HCTC, provided they are between the ages of 55 and 64 years old but not yet entitled to Medicare.
