Law Dictionary

Qualified Health Plan

(Tax Law)

Eligible individuals must be enrolled in qualified health coverage in order to claim the HCTC. The following types of health plans are qualified for purposes of the HCTC Program:

1.COBRA extended health plans: COBRA, short for the Consolidated Omnibus Budget 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 pays at least 50% of the cost of coverage.

2. Non-group (Individual) coverage: This coverage must have been purchased as an individual policy. The individuals 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. 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.
3. Spousal coverage: Coverage under the eligible individual�s spouse�s employer-sponsored health plan is allowable, but only if the spouse�s employer pays less than 50% of the cost of coverage. If the spouse�s coverage is COBRA, the individual can enroll in the advance payment option; if it is not COBRA, the individual can only claim the credit when filling his or her federal tax return.

4. State-qualified health plans:A health plan that has been approved by a state's department of insurance (DOI) as meeting the requirements set forth in the Trade Act of 2002.

Source : Internal Revenue Service - United States Department of Treasury

Language : English

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