HCTC: Qualified Health Plan Requirements
To receive the HCTC, you must be enrolled in a qualified health plan. This page provides information about meeting qualified health plan requirements for the HCTC and how to get qualified health insurance if you currently do not have a qualified health plan. See the information below to determine if you already have a qualified health plan, or if you can get qualified health insurance.
The following types of health insurance are qualified for the HCTC:
1) COBRA (Consolidated Omnibus Budget Reconciliation Act)
COBRA is federal legislation that requires your former employer to continue offering job-based health coverage to you if you lose your job or run into other qualifying events that cause you to lose your health insurance.
- If you pay more than 50% of the cost for COBRA, you can receive the HCTC
- If you pay 50% or less of the cost for COBRA, you cannot receive the HCTC
Note: Generally, after you leave a job, you have 60 days to enroll in COBRA. When you qualify for Trade Adjustment Assistance (TAA), you may have a second chance to elect to receive COBRA benefits. If you are within the 60-day period or believe that you are eligible for this second election period, contact your former employer.
2) State-qualified health plan
These are health plans that a state's Department of Insurance approves as meeting the Trade Act of 2002's Consumer Protection requirements for the HCTC. You must buy a state-qualified health plan directly from an insurance company or other organization designated by your state. A state-qualified health plan may be a private health insurance plan offered by a company or a public health insurance plan offered by a state, depending on the health plans your state has qualified. This type of plan is not available through an employer.
Go to the list of state-qualified health plans to view the options available in your state. You should review and compare these options to decide on the best choice for you and your family.
3) Spousal coverage
Spousal coverage is group health insurance that is available to you through your spouse’s current or former employer.
- If you and your spouse pay more than 50% of the cost of the spousal coverage, you can receive the HCTC
- If you and your spouse pay 50% or less of the cost of the spousal coverage, you cannot receive the HCTC
Any portion of the cost for spousal coverage that is paid for before taxes are taken out is considered to have been paid by the employer. Therefore, any pretax contribution for health insurance should be included in the cost for which the company pays.
If you have spousal coverage, you can only receive the Monthly HCTC if it is COBRA. If your spouse’s health insurance is not COBRA, you can only receive theYearly HCTC on your federal income tax return.
4) Non-group/individual health plan
This type of health insurance is sold by a private health insurance company, broker or agent to one individual or one family at a time. This is not group health insurance.
Caution: In order to receive the HCTC with this type of health insurance, your first day of coverage must have started at least 30 days before your last day with the company that made you eligible for PBGC pension payments or TAA benefits. Because of this 30-day requirement, non-group/individual coverage is rare for the HCTC.
5) VEBA (Voluntary Employees' Beneficiary Association)
VEBAs may be established through a bankruptcy court to provide a health plan in lieu of COBRA and retiree benefits, but not all VEBAs qualify for the HCTC.
What the HCTC Pays For
The HCTC will pay for:
- Comprehensive, major medical insurance coverage
- Certain supplemental insurance coverage types such as:
- Prescription-only plans
- Substance abuse coverage
- Hearing coverage
What the HCTC Cannot Pay For
The HCTC cannot pay for:
- A separate dental or vision plan that is not included as part of your comprehensive major medical coverage
- Portions of a health insurance premium that are for separately selected and added options to your major medical coverage, such as dental, vision, or long-term care coverage. For example:
$100 of your premium pays for comprehensive major medical coverage
$10 of your premium pays for dental coverage you separately add
$10 of your premium pays for vision coverage you separately add
The total premium paid to your health plan is $120, but the amount you can claim for the HCTC is only $100. Therefore, if you are eligible for the HCTC you can receive a credit equal to $65, or 65% of the $100 cost for major medical coverage.
- Non-Qualified Health Insurance:
- Federal Employees Health Benefits Program (FEHBP)
- Medicaid and Medicare A, B, and C
- Children's Health Insurance Program (CHIP)
- Medicare supplemental (Medigap) insurance
- TRICARE supplemental insurance
- Similar supplemental insurance to an employer-sponsored group health plan
- Coverage under a flexible spending account or health reimbursement account
- Contributions to a health savings accounts (HCTC will contribute to the High Deductible Health Plan associated with the health savings account)
- Any insurance if substantially all of the coverage is:
o Coverage for on-site medical clinics
o Hospital indemnity or other fixed indemnity insurance (insurance that pays you directly versus paying you to pay the provider of the health service)
o Accident or disability income insurance (or a combination of the two)
o Liability insurance
o A supplement to liability insurance
o Workers’ compensation or similar insurance
o Automobile medical payment insurance
o Credit-only insurance
o Limited scope dental or vision benefits
o Benefits for long-term care, nursing home care, home health care, community-based care (or any combination), or coverage for only a specified disease or illness
To view other HCTC eligibility requirements, please visit the HCTC Eligibility Requirements and How to Receive the HCTC page.