The Health Coverage Tax Credit was enacted by Congress in the Trade Act of 2002. It is a federal tax credit that pays up to 65% of health plan premiums for eligible workers whose qualified health coverage has been affected because they lost their jobs due to foreign competition. The credit is also available to certain retirees whose pension from a former employer were fired and are now receiving benefits from the Pension Benefit Guaranty Corporation (PBGC). The credit is intended to ensure that health care coverage more accessible and available to people who otherwise might not be able to afford it.The U.S. Treasury Department, through the Internal Revenue Service (IRS), working in conjunction with other federal and state agencies, such as institutions of the State workforce, and the private health industry, the Health Insurance Administration Tax Credit program. If you qualify, this credit may be claimed as a refund when you file your U.S. annual federal income taxes, or you can receive advance payments of the monthly credit, to pay health insurance premiums throughout the year as it should. Who is eligible? The Health Coverage Tax Credit (HCTC) is intended to help certain groups of individuals. There are three groups of people who are potentially eligible for this tax credit: · Workers who are receiving Trade Readjustment Allowances under the Trade Adjustment Assistance (TAA). These are mostly workers who have been displaced from their jobs due to competition from foreign trade. The TAA program is managed by State agencies, State Agencies Workforce (SWAS). These organizations may also be called the State Employment Office. · Workers who are at least 50 years of age and is receiving benefits under the Alternative Trade Adjustment Assistance (ATAA) program. · The retired at least 55 years of age and is receiving retirement benefits from the Pension Benefit Guaranty Corporation. The survivors, beneficiaries, and the alternate payee at least 55 years of age who are receiving these benefits are also eligible for Coverage Tax Credit Health. In addition, the tax credit is available only to persons who are enrolled in what is defined as a "qualified health plan." Only certain types of health plans qualify for this tax benefit, and which are described below. Once you have met one of the above eligibility criteria, the Agency for Workforce State or the Pension Benefit Guaranty Corporation will send the HCTC Program Kit, which includes a registration form and describes the requirements and the tax credit eligibility. Normally, you will receive a kit if you qualify for this benefit, but if you have any questions, please consult with your Workforce Agency of the State or with the U.S. Labour and Employment Department of Management Training. Who does not disqualify QualifyThere criteria that make certain people ineligible for Coverage Tax Credit Health. If any of the following conditions, you are not eligible for this credit: · You have health coverage through a maintenance plan for its current or former employer or your spouse, and the employer pays 50% or more of the cost of coverage. · You are entitled to Medicare, even if you are not registered and are not receiving benefits. · You are enrolled in the Federal Employees Health Benefits Program (FEHBP). · You are enrolled in Medicaid or the State Children's Health Insurance Program (SCHIP). • You have health coverage through the military (TRICARE / CHAMPUS). However, this does not include Veterans Affairs (VA) benefits. · You can be claimed as a dependent on tax return of another person. Additional requirements for eligibility for workers with at least 50 years of age and is receiving ATAA benefits. You are not eligible for the Earned Health Coverage if you are enrolled in a qualified health plan and one of the following: • You have health coverage and his or her current employer or former spouse is paying the cost of their health coverage. · You are eligible for health coverage, and if you had coverage, or your spouse's employer or former employer would pay 50% or more of the costs. · You or your spouse could pay for the cost of health coverage on a pretax basis. MembersIf family meets all eligibility requirements, and family members are not covered by other health insurance, you can use the Health Coverage Tax Credit to help pay the cost of health insurance for them. What Health Plans requirements? In order to be able to take advantage of Coverage Tax Credit Health must be enrolled in what is defined as a qualified insurance plan. The members of the family wishing to qualify for the credit must also be enrolled in a qualified plan. This may be the same plan you are enrolled, or in a separate plan, as long as it is a qualified plan. The following are defined as qualified health insurance plans for purposes of the Tax Credit Health Coverage · COBRA extended health. These are temporary extensions of coverage of health-related work an employee can choose after a layoff, termination or other specified events. Do not group coverage. This is a policy of individual health insurance you have purchased and registered in which at least 30 days before it was separated from his employer and became entitled to the benefits of TAA, ATAA or PBGC. · Coverage of spouse. You may be covered by your spouse's plan of employer-sponsored health, provided the employer pays less than 50% of the cost of coverage. Whether you can claim the Tax Credit health coverage as an advance payment or by way of reimbursement depends on whether the coverage under COBRA. If COBRA coverage is, you can claim the prepayment option. If not, you can only claim a refund when you file your tax return. · State of qualified health plans. A list of these plans, by state, can be found on the IRS Web site, under the "Individuals" tab, under "HCTC: Individuals – Overview"., In www.irs.gov ¿ What types of coverage requirements? The Health Coverage Tax Credit is intended to help pay for full coverage, major medical expenses. Therefore, the supplemental coverage, for example, dental, vision and long-term care, do not qualify for the credit, unless included as part of an overall benefit. However, a policy that covers prescription drugs are usually eligible for the credit, whether it is a separate policy or part of the major medical coverage. Other types of health coverage do not qualify for the credit are: Medicare supplement (Medigap). · TRICARE supplemental insurance. · Coverage for onsite medical clinics. · Hospital indemnity or other fixed indemnity insurance. · Accident or disability. · Insurance Liability. · Workers' compensation insurance. · The medical payment from auto insurance. · Benefits for the care of a nursing home, health care in the home or community-based care. · Insurance for a specific disease or illness. · Coverage under a flexible spending, as a medical savings account (HSA) or Archer Medical Savings Account (MSA). Pre-existing conditions when you are a candidate for Coverage Tax Credit Health, a health plan may impose qualified pre-existing condition exclusions. The plan may exclude payment for treatment related to a preexisting condition if you had less than 3 months of continuous coverage of health before being eligible for the credit, or have had a break in coverage of more than 62 days immediately before applying for registration in the. qualified health plan coverage How to claim tax CreditThere health are two ways to apply for credit: · Previously, on a monthly basis during the year. Here is credited on a monthly basis before the time, and can use that money to pay health insurance premiums as they fall due. · In the form of capital, when filing your annual federal income tax. In this case, the refund is received in a lump sum of premiums qualified health coverage you paid during the fiscal year. Claim the credit in order to claim the credit AdvanceIn in advance, you must be enrolled in the HCTC program. To this end, the completion and submission of registration form is included in the HCTC Program Kit sent to you when you are eligible. If you think you qualify, but do not receive this kit, you should contact your Workforce Agency of the State. The steps you follow to get the Tax Credit Advance Payment of Health Coverage are summarized as follows: 1. Request and receive TAA, ATAA, or PBGC benefits, as applicable in your case. 2. Enroll in a qualified health plan. 3. Receive the HCTC Program Kit. Complete and submit the form. 4. Ask for help at the state level for the HCTC (National Emergency Grant – NEG Bridge Grants) if available in your state. This will help pay premiums for health coverage while registering for the HCTC advance payment. 5. Continue paying 100% of their health coverage premiums until you receive an invoice HCTC. You can request a refund of those amounts you pay when you file your annual tax return. 6. Once your registration is complete, and is enrolled in the HCTC, you will begin receiving monthly bills for the program. You must pay the HCTC part of the bill, which is 35% of the total premium health coverage. HCTC send your payment along with your payment for the balance of 65%, your health plan. Claim a refund on your tax ReturnYou can claim the Health Coverage Tax Credit on your annual federal income tax if you qualify for the credit but does not apply to advance payments. You can also apply for reimbursement of the premiums you paid in full to yourself, while you were in the process of registration for payment. IRS Form 8885, Health Coverage Tax Credit, is used to claim reimbursement. This form must be completed and attached to your annual income tax. There are detailed instructions indicating how to complete the form and supporting documentation you need to deliver. For example, you must attach invoices and proof of payment of health insurance premiums you pay, while in the process of registering for credit. Form 8885 and instructions can be downloaded from the IRS website. Provided eligibility requirements are met, the Health Coverage Tax Credit is available to citizens and U.S. residents and foreign residents. A U.S. citizen or resident to file Form 8885 with Form 1040, and a nonresident alien must file Form 8885 with Form 1040NR. If you get advance payments during the year should receive a Form 1099-H in the first part of next year, reports of advances received. The information on Form 1099-H is used to complete Form 8885. QuestionsIn the IRS website, with the HCTC keyword, you can find a list of frequently asked questions about the program, Health Coverage Tax Credit, who is eligible, what plans qualify, and how to claim the benefits of this program.