HCTC Overview
The HCTC makes health insurance more affordable for trade-affected workers, Pension Benefit Guaranty Corporation (PBGC) payees, and their families by paying 72.5% of health insurance premiums. The HCTC is available on a monthly basis to help you pay for health insurance as you go, or on a yearly basis when you file your federal income tax return.
Once registered for the monthly HCTC program, you'll pay 27.5% of your premium, we'll add 72.5%, and then we'll send the full 100% to your health plan for you. 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 benefits were expanded as a result of the ARRA. Described by some participants as “a lifesaver,” the Health Coverage Tax Credit (HCTC) is a federally funded tax credit that allows individuals to pay only 35% of their health insurance.
Nationwide, thousands of people are candidates 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(TAA) program. Others may be eligible because they receive benefits from the Pension Benefit Guaranty Corporation (PBGC) and are 55 years old or older.
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 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.
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