Enrollment period opening for new health plan tax credit

CORAOPOLIS, Pa. – A new federal tax credit will help pay health insurance premiums for as many as a quarter-million Americans who have lost their jobs because of foreign competition, Treasury Secretary John Snow announced Monday.

Speaking outside Pittsburgh to an audience that included steelworkers, Snow discussed the Health Coverage Tax Credit, which was included in the Trade Adjustment Assistance Act signed into law last year. The program will help workers who have lost their jobs pay health-insurance costs through state-approved plans or COBRA, a federal plan that allows workers to continue coverage under their former companies’ health plans.

Six states – Pennsylvania, Maine, Maryland, Nebraska, New Jersey and New York – have qualified plans in place. Workers can file for early registration under the credit beginning Tuesday.

“The Health Coverage Tax Credit is one way to give back to you,” Snow told the workers. “It’s a bold step in the direction of affordable health care for all Americans.”

The credit covers 65 percent of health plan premiums for eligible workers displaced by increased imports. It also applies to eligible workers between 55 and 65 years old who have had their pensions taken over by the federal Pension Benefit Guaranty Corp., which insures payments on bankrupt pension plans. It does not cover health plans in which a former employer pays more than half the cost of coverage.

Under the credit, an eligible worker can have 65 percent of his or her monthly premium paid for in advance. Otherwise, he or she can continue to pay the full amount each month and then get the credit back at the end of the year.

The Internal Revenue Service will begin mailing notices to eligible individuals soon, and payments are scheduled to begin by August.