Health Coverage Premium Subsidies Need Boost, Says White House

Premium subsidies for health insurance coverage under the Health Care Tax Credit (HCTC) program may get a boost due to an agreement being negotiated between the White House and Congress.

The HCTC program was enacted as part of the Trade Act of 2002. As originally enacted, it provided a 65-percent tax credit for qualifying health coverage (including COBRA coverage). The specific workers who can benefit from the HCTC are: (1) individuals who receive a benefit through one of the Trade Adjustment Assistance (TAA) programs; (2) Pension Benefit Guaranty Corporation (PBGC) payees who are 55 years old or older; and (3) qualified family members of TAA recipients and PBGC payees. Eligible individuals cannot be enrolled in certain other health coverage such as Medicaid or Medicare.

TAA programs must be periodically reauthorized, and as part of that process, the White House on June 28 announced “an agreement on the underlying terms for a meaningful renewal of a strengthened TAA. The President embraces these critical elements of TAA needed to ensure that workers have the best opportunity to get good jobs that keep them in the middle class.”

One of those critical elements will be increasing the HCTC from 65 percent to “a more affordable level” of 72.5 percent.

“This will ensure access to quality, affordable health coverage for all Americans, with premium tax credits available to help individuals and families who need additional assistance purchasing health insurance,” according to a White House fact sheet, at least  until the HCTC sunsets at the end of 2013 as certain health care reform provisions go into effect.

Information on the HCTC can be found in Mandated Health Benefits — The COBRA Guide and the IRS website for the HCTC program.