HCTC is a Federal tax credit program administered by the
Internal Revenue Service
(IRS). HCTC helps cover the cost of health insurance while you participate in the TAA program to make your health insurance premiums more affordable.
NOTE: The HCTC program does not provide health insurance coverage.
How Does it Work?
Participants in the HCTC program may select either of the following credit options:
Yearly credit: You pay 100% of your premium for the entire year and then the IRS will either
issue a refund to you or a credit against your federal taxes owed for 72.5% of your premium.
Monthly credit: You pay 27.5% of your monthly premium to the IRS. The IRS adds the remaining
72.5% of your monthly premium, and pays your health plan administrator 100% of your monthly payment.
This lowers your out-of-pocket payments for your monthly premiums.
NOTE: HCTC cannot be applied to separate dental / vision plans.
Am I Eligible?
You must be enrolled in the TAA program and receive one Unemployment Insurance (UI) payment, Trade Readjustment Allowance (TRA) or Reemployment Trade Adjustment Assistance (RTAA) wage subsidy each calendar month. Once you receive at least one UI, TRA or RTAA payment, you may apply for the HCTC benefit. Your HCTC eligibility ends when you no longer receive UI, TRA or RTAA payments, or when your TRA eligibility period expires (even if you are still receiving UI).
Additionally, you must:
Be insured through a qualified health plan (See "What are qualified health plans?" section)
Not be claimed as a dependent on someone else’s federal tax return
Not be in prison
NOTE: You may be able to change health care plans to receive the HCTC
What are Qualified Health Plans?
COBRA: You must pay more than 50% of COBRA premiums. If COBRA eligibility ends, HCTC eligibility also ends until you enroll in another qualified health plan.
Spouse’s Employer Health Plan: You may enroll in group coverage through spouse’s employer. Your spouse must pay more than 50% of the insurance premium. However, the monthly payment option is not available under this type of plan.
Non-Group / Individual Health Plan
The following health plans do not qualify for HCTC:
Health Insurance Marketplace health plans
U.S. military health system (TRICARE)
Children’s Health Insurance Program (CHIP)
Federal Employees Health Benefits Program (FEHBP)
Is HCTC Available to My Family Members?
Yes. For any month that you are eligible for HCTC, you can include premiums paid for a qualifying family member for that eligible coverage month. The qualifying family member must:
Be enrolled in a qualified health plan for which you paid some or all of the premiums. NOTE: It does not have to be the same coverage as you.
Be claimed as a dependent on your federal tax return.
Not enrolled in Medicare.
Not enrolled in Medicaid.
Not enrolled in TRICARE.
Not enrolled in CHIP.
Not enrolled in FEHBP.
How Do I Participate in the HCTC Program?
Apply for the TAA program.
DWD will then mail a determination letter to both you and the IRS, if you are eligible.
For monthly payments, use these IRS links to enroll: