The primary function of the Health Coverage Tax Credit (HCTC) program is to assist eligible individuals in paying for their health care insurance costs. The HCTC is an advance as well as a year-end tax credit. The individual is responsible for 35% of their premium.

The HCTC pays 65% of the cost of premiums for qualified health plans for eligible individuals and qualified family members. It is not a Federal government insurance program. Recipients can receive their benefits either in advance - to help pay health plan premiums as they come due, or in a lump sum when they file their federal tax returns.

Who is eligible? Nationwide, hundreds of thousands of people are potentially eligible for the program. They include displaced workers who are eligible to receive Trade Readjustment Allowances (TRA) under the Trade Adjustment Assistance Act (TAA), or the upcoming Alternative Trade Adjustment Assistance (ATAA) program. Other eligible individuals receive pensions managed by the Pension Benefit Guaranty Corporation (PBGC). Eligibility for HCTC is not determined by ACHIA. Eligibility for HCTC is determined by the federal HCTC program.

Which Trade Adjustment Assistance (TAA) recipients are potentially eligible?

• Individuals receiving a Trade Readjustment Allowance (TRA)
• Individuals who would be eligible to receive TRA, but have not yet exhausted their unemployment insurance (UI) benefits
• Individuals receiving benefits under the Alternative Trade Adjustment Assistance (ATAA) program

Individuals who are 55 years or older and meet one of the following requirements:

• Receive pension benefits from the PBGC
• Receive pension benefits from the PBGC as a survivor or beneficiary of a PBGC participant
• Receive a portion of his or her ex-spouse's benefit from the PBGC as an alternative payee
• Have received a lump sum payment after August 5, 2003

Individuals are not eligible for the HCTC for any month if on the first day of such month any of the following apply:

• They are enrolled in a health plan maintained by an employer or former employer that pays (or the employee pays with pre-tax dollars) at least 50% of the cost of coverage
• They are enrolled in a state's Medicaid program
• They are enrolled in the State Children's Health Insurance Program (SCHIP)
• They are enrolled in a plan in the Federal Employees Health Benefits Program (FEHBP)
• They are entitled to health coverage through the U.S. military health system (TRICARE/CHAMPUS)
• They are imprisoned by a federal, state, or local authority

Individuals on the Medicare Supplemental Insurance program are not eligible for HCTC.

Remember, eligibility for HCTC is not determined by ACHIA. Eligibility for HCTC is determined by the federal HCTC program. Eligible individuals should receive notification and a kit directly from the HCTC. When applying for ACHIA under HCTC, you must include a copy of your HCTC eligibility notice with your ACHIA application.

If you did not receive notification from HCTC, and think you might be eligible, or for any other questions, please contact:

The HCTC Customer Contact Center toll free at 1-866-628-HCTC; TDD/TTY 1-866-626-HCTC

The HCTC program website: www.irs.gov, IRS keyword "HCTC"