On October 11, 2011, the Trade Adjustment Assistance Extension Act was signed into law. Among its many provisions, this bill increases the amount of the Health Coverage Tax Credit (HCTC) available through the Trade Adjustment Assistance (TAA) program and extends available COBRA coverage to certain individuals. These provisions will be effective until January 1, 2014.
The HCTC was established in 2002 to help cover the cost of health insurance for workers who lose their jobs due to foreign trade and for certain individuals who receive their pension payments through the Pension Benefit Guaranty Corporation (PBGC). An individual is eligible for the HCTC if he or she meets the general requirements, is enrolled in a qualified health plan, and is either at least 55 years old and receiving pension payments from the PBGC, or receiving TAA benefits (including benefits under the Reemployment or Alternative TAA).
The HCTC pays a portion of qualified health insurance premiums for eligible individuals. Under the Trade Adjustment Assistance Extension Act, the amount of the HCTC increased from 65 percent of the qualified health insurance premiums to 72.5 percent.
Also under the new act, TAA recipients and individuals receiving pension payments from the PBGC whose maximum COBRA coverage period is due to expire on or after November 21, 2011 are eligible for COBRA coverage extensions through their former employer. TAA recipients are eligible for COBRA coverage extensions for as long as they have TAA eligibility, or until January 1, 2014. Individuals receiving pension payments from the PBGC are eligible for COBRA coverage extensions until January 1, 2014. If the PBGC payee dies, his or her surviving spouse or dependents are able to receive an additional 24 months of COBRA, or until January 1, 2014.