Presumably put to final rest due to the Affordable Care Act, a program has been revived that establishes a health coverage tax credit for certain individuals — including COBRA qualified beneficiaries — who lose their jobs because of trade-related reasons. The new HCTC program, which will be effective through Dec. 31, 2019, includes provisions on its interplay with the ACA. It was enacted June 29 as part of the Trade Preferences Extension Act of 2015 (Pub. L. 114-27).
The HCTC was first established under a 2002 federal law that gave the U.S. president trade negotiating authority and included a major expansion of earlier legislation that provides trade adjustment assistance or alternate TAA for people who lose their jobs for trade-related reasons, such as competition from foreign imports. The HCTC program was amended several times to make changes such as raising the original 65-percent tax credit up to 72.5 percent (and up to 80 percent for a brief period).
On Jan. 1, 2014, the legislation that authorized the HCTC expired and as such the tax credit was not available for tax years after 2013. It was expected that, instead, eligible individuals would take advantage of the premium subsidies available under the ACA.
However, the new law not only extends the HCTC (retroactively for coverage months in taxable years beginning after Dec. 31, 2013), it also modifies the program to note how it will coordinate with premium tax credits provided under the ACA, and the circumstances under which “taxpayers” would be eligible for either the ACA tax credits or HCTC.
The law notes that “as soon as possible” after its enactment date, the U.S. Departments of the Treasury, Health and Human Services, and Labor, as well as the Pension Benefit Guaranty Corp., will conduct public outreach to notify potentially eligible individuals about the HCTC.