Law Dictionary

Automatically Qualified Health Plan

(Tax Law)

The law governing the HCTC Program identified the following three types of health coverage as automatically qualified for the purposes of the tax credit for all elgible individuals:

1. COBRA extended health plans: COBRA, short for the Consolidated OmnibusBudget and Reconciliation Act of 1985, requires most employers with group health plans to offer employees the option to temporarily extend their job-based health coverage in the case of a layoff, termination or other specified event.COBRA is automatically qualified unless the employer or former employer paysat least 50% of the cost of coverage.
2. Non-group (Individual) coverage: This coverage must have been purchased as an individual policy. Non-group coverage is usually provided under a contract issued to one individual or family and purchased through an insurance company, an agent, or broker. The individual must have been enrolled in this type of plan at least 30 days before separating from the employer that made him or her eligible for TAA, ATAA or PBGC benefits.
3. Spousal coverage: If eligible individual�s spouse has employer-sponsored coverage and the spouse�s employer pays less than 50% of the cost of coverage, it is considered qualified coverage for the HCTC. If the spouse�s coverage is COBRA, the individual can enroll in either the advance payment option or file for the credit on his or her federal tax return; if it is not COBRA, the individual can only claim the credit when filing his or her federal tax return.

Source : Internal Revenue Service - United States Department of Treasury

Language : English

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