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Introducing the Federal Health Coverage Tax Credit (HCTC)
For HCTC rate information, select this link.
Recent Updates:
Several changes and additions were made to the Health Care Tax Credit (HCTC) program in The Trade Adjustment Assistance Health Coverage Improvement Act, which passed as part of the American Recovery and Reinvestment Act of 2009. Some of the changes include: an increase in the monthly credit, an expansion of eligibility for individuals and their families, a credit for newly-enrolled participants for payments paid in 2009 while enrolling in the monthly HCTC program, and an extension of COBRA benefits.
The HCTC is a tax credit administered by the Internal Revenue Service (IRS). The IRS website provides detailed information about these changes, including information on other provisions of the stimulus law that affect the HCTC. For more information, visit the following IRS webpage: http://www.irs.gov/individuals/article/0,,id=109960,00.html.
Highlights:
- The federal government has introduced a new Health Coverage Tax Credit (HCTC) program that pays 80% of certain health insurance premiums.
- If you receive Trade Adjustment Assistance (TAA)/ Alternate Trade Adjustment Assistance (ATAA) benefits or PBGC pension benefits (Pension Benefit Guaranty Corporation), you may be eligible for the HCTC.
- Eligible individuals must enroll in a qualified health plan to claim the HCTC.
- The tax credit may cover your spouse and dependents in addition to you.
- You may claim the credit even if you do not owe federal income tax.
- You can either claim your credit when you file your federal tax return or access an advance credit to help you pay for health insurance premiums as they become due.
Who is eligible for the HCTC?
Eligible individuals should receive notice and an enrollment kit from the HCTC program. That enrollment kit will include more information about the federal tax credit and instructions as to how to pay for your share of the coverage.
There are two eligible groups:
- Trade Impacted Workers
Trade Impacted Workers are individuals certified to receive certain Trade Adjustment Assistance (TAA) and Alternative TAA benefits because they have lost their jobs due to the effects of international trade.
For general information about eligibility for TAA/ATAA benefits call the New York State Department of Labor, Special Programs Unit at 518-402-0189.
- Pension Benefit Guaranty Corporation (PBGC) Recipients
PBGC Recipients are individuals receiving PBGC pension benefit payments who are 55 years of age or older. This includes individuals receiving benefits from the PBGC as a survivor or beneficiary of a PBGC recipient. Those receiving portion of an ex-spouse's benefit from the PBGC can also qualify for the HCTC. For questions about pension benefits through PBGC, call them at 1-800-400-7242.
Please note: eligibility for Medicare or employer plans where the employer pays more than 50% of premium (including spouse's employer plans), and other factors may disqualify you for the federal tax credit. Questions regarding eligibility for the tax credit should be directed to 1-866-628-HCTC (1-866-628-4282).
There are two ways to claim the credit:
- You can pay your health insurance premiums directly to your health plan and claim your 80% tax credit when you file your federal tax return (IRS form 8885); or
- You can register with the HCTC program to access your tax credit in advance. This option allows you to pay 20% of your health insurance premiums to the HCTC program. The HCTC program will then add your 80% tax credit to your payment and pay 100% of your health insurance premium directly to your health plan. To find out more about registering for this prepayment feature call 1-866-628-HCTC (1-866-628-4282).
You must apply your tax credit towards the purchase of qualified health insurance coverage!
New York State now has several health insurance products that qualify for the tax credit. These include:- Two Standardized Individual plans offered by all NYS HMOs
These plans offer extensive hospital and medical benefits including unlimited prescription drug coverage. One of the plans is a straight HMO option where you must use doctors and hospitals that participate with your HMO. The other is a Point of Service (POS) plan which allows you to access providers which do not participate with your HMO.
Select this link to see the full premium rates for these individual plans and to obtain contact information for the health plans in your county.
- HCTC Healthy NY
HCTC Healthy NY qualifies for the tax credit and is available for purchase by all individuals eligible for the HCTC. HCTC Healthy NY offers the streamlined comprehensive health insurance benefit package which was developed for the public Healthy NY program. The benefits include hospital care, regular medical checkups and a limited prescription drug benefit (capped at $3,000 annually). The HCTC Healthy NY product also includes a few additional benefits that are not included in the traditional Healthy NY health insurance benefits package (i.e., home health care, outpatient alcohol and substance abuse services, chiropractic care and emergency ambulance).
Please be aware the HCTC Healthy NY is designed to be more affordable than the standardized individual products described above. Therefore, the benefits of HCTC Healthy NY are less generous than the standardized individual plans (HCTC Healthy NY has no mental health coverage, the prescription drugs benefit is capped at $3,000, etc.). You should fully examine benefits and cost in determining which health insurance product is right for your family.
HCTC Healthy NY is offered statewide by Group Health Incorporated (GHI) and is offered by Excellus Health Plan in Central New York and Univera Health Plan in and Western NY. Select this link to see the premium rates and contact information for the health plans in your county.
- Healthy NY
Healthy NY is a reduced cost health insurance program. The premiums for the product are reduced by State financial support. Healthy NY can be purchased by uninsured individuals meeting certain income and eligibility requirements. Because this public program has eligibility requirements, not all individuals who are eligible for the tax credit will be eligible to purchase Healthy NY. Those who do qualify to purchase Healthy NY can purchase it and also apply their federal tax credit towards its cost.
Healthy NY is available at any HMO in New York State. Healthy NY covers important medical services such as hospital care, and regular medical checkups. HNY offers a limited prescription drug benefit ($3,000 annual maximum).
When purchasing Healthy NY, you should advise the HMO that you have received an enrollment packet from the federal HCTC program. Go to www.healthyny.com or call 1-866-HEALTHYNY to determine if you qualify to purchase Healthy NY and to learn about Healthy NY premium rates for the HMOs in your county.
- Additional Qualified Options
You can also apply for the HCTC and apply the federal premium assistance to the following automatically eligible types of coverage:
- COBRA or New York State continuation coverage.
- Employer plans or spousal employer plans where the employer pays for less than 50% of the premium. (*Not eligible for the HCTC advance payment feature)
- Any individual health insurance policy that you purchased directly as long as that coverage was in effect 30 days prior to your separation from your employment.
Additional Resources:
To obtain information about enrollment in the federal tax credit call the HCTC program at 1-866-628-HCTC (1-866-628-4282) or visit to http://www.irs.gov (IRS keyword HCTC).
The New York State Insurance Department has a Toll Free Consumer Line 1-800-342-3736. They can also be reached at 518-474-6600.
For helpful information to compare NYS HMOs, visit
