Health Coverage Tax Credit Program

The Health Coverage Tax Credit (HCTC) program was created by the Trade Act of 2002, and is a federal tax credit that pays 65% of the qualified health plan premiums paid by eligible individuals. The program took effect on August 1, 2003, and will allow eligible individuals to either claim the tax credit in advance by paying 65% of the premiums due, or, to claim the HCTC when they file their federal tax return. Eligible individuals include trade impacted workers receiving a Trade Readjustment Allowance (TAA) or receiving benefits under the Alternative Trade Adjustment Assistance (ATAA) program and certain individuals receiving pension benefits from the Pension Benefit Guaranty Corporation (PBGC).

The Alabama Department of Insurance and Blue Cross Blue Shield of Alabama (BCBSAL) have worked with officials at HCTC and established a state-qualified plan for individuals to enroll in and receive their tax credit. More information may be obtained by calling toll-free numbers for HCTC at 1-866-628-4282 and BCBSAL at 1-800-292-8868.

A basic overview of how the plan operates is as follows:

U.S. Department of Labor certifies a particular industry or group is TAA eligible
Alabama Department of Industrial Relations transmits a list of potential eligible individuals from a certified industry to HCTC
HCTC sends a program kit to the potential eligible individual
Potential eligible individual returns completed paperwork to HCTC customer contact center
HCTC verifies eligibility, confirms health coverage and registers individual for the HCTC and sends invoice to the individual
Eligible individual submits invoice and 35% of the premium amount to the U.S. Treasury
U.S. Treasury adds 65% and submits full premium payment to BCBSAL

May 13, 2008