Health Care Tax Credit (HCTC)
The Health Coverage Tax Credit (HCTC) is a federal program for workers who were laid-off because their former employer lost business due to foreign competition. The HCTC is a federal tax credit that pays 80% of qualified health insurance premiums for eligible individuals and their family members.
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Who is eligible?
To receive HCTC you must be Trade Act approved and be receiving unemployment benefits, or Alternative Trade Adjustment Assistance (ATAA) or Reemployment Trade Adjustment Assistance (RTAA) but you can't be on Medicare or able to be on your spouse's insurance unless the employer is paying less than 50% of the cost.
- Apply for Trade Act eligibility by completing the TRA-26 form. This form is provided at trade information sessions, at the CareerCenter, or by mail by calling 1-866-628-4282. After submitting the TRA-26 form your TRA eligibility determination will be mailed to you.
- If you qualify under the Trade Act you will receive an HCTC Program Kit in the mail with your TRA determination. Fill out the enclosed registration form and mail it to the HCTC Program with the required supporting documents. If you do not receive the Kit call for one at 1-866-628-4282.
- Enroll in a qualified health plan. Only certain types of health plans qualify. These include:
- COBRA - your plan at work.
- DirigoChoice - a state plan. We suggest you call them at 1-877-892-8391 for your options and application packet.Make sure you tell them that you are qualified under the Trade Act.
- Non-group/individual-acquired insurance 30 days prior to layoff date.
- The spousal coverage health plan option is through end of the year tax credits. For more information on these options call 1-866-628-4282.
Once your registration is complete
Make payments to your insurance company until you receive your first invoice from HCTC/IRS. While the IRS is processing your application, the Maine Department of Labor will provide you with an 80% reimbursement. Call MDOL Bureau of Employment Services at 207-623-7981 or 1-888-457-8883 for details and a reimbursement form.
Be aware of your status. The HCTC benefit is good for up to 2 years but may end when:
- You have exhausted your Unemployment Insurance (UI) - or - your Trade Readjustment Assistance (TRA) - or- you are no longer on Reemployment Trade Adjustment Assistance (RTAA) or Alternative Trade Adjustment Assistance (ATAA)
- You have finished your TAA approved training
- Your training waiver expires
- You are late on a payment (possibly temporary)
- You become employed
Example of how the HCTC discount works with the DirigoChoice program for a person with single coverage
Cost of Harvard Pilgram Insurance monthly payment through DirigoChoice is$622. Total due after 80% HCTC discount applied is $124.40. DirigoChoice Discount Group will vary depending on family size, household income and Plan Option.
To find out more about the Health Coverage Tax Credit, contact your local CareerCenter.
To speak with the Health Coverage Tax Credit coordinator, call 207-623-7981, TTY users call Maine Relay 711.