EMPLOYMENT AND TRAINING ADMINISTRATION
U.S. Department of Labor
Washington, D. C. 20210
TAA Reform Act/Health Ins.
March 3, 2003
TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 20-02
ALL STATE WORKFORCE AGENCIES
EMILY STOVER DeROCCO
Use of National Emergency Grant (NEG) Funds Under the Workforce Investment Act (WIA), as Amended, to Support Health Insurance Coverage Assistance for Trade-Impacted Workers
Purpose. To provide policies and procedures governing the use of Workforce Investment Act (WIA) National Emergency Grants (NEG) for health insurance coverage assistance and support services to eligible trade-impacted workers and other eligible individuals, as specified in the Trade Adjustment Assistance Reform Act of 2002.
Reference. Workforce Investment Act, section 173;
Trade Adjustment Assistance Reform Act of 2002 (Public Law 107-210), sections 201, 202 and 203;
Internal Revenue Code of 1986, Chapter 1, subchapter A, part IV, Subpart C;
Unemployment Program Letter (UIPL) No. 02-03, “Health Insurance Tax Credit for Eligible Trade Adjustment Assistance/Trade Readjustment Allowances (TAA/TRA) Recipients;” dated October 10, 2002;
Unemployment Program Letter (UIPL) No. 05-03, “Health Insurance Tax Credit for Eligible Trade Adjustment Assistance/Trade Readjustment Allowances (TAA/TRA) Recipients;” dated November 22, 2002;
Training and Employment Guidance Letter (TEGL) No. 10-02, “Use of National Emergency Grant Funds Under the Workforce Investment Act, as Amended, to Develop Systems for Health Insurance Coverage Assistance for Trade-Impacted Workers,” dated October 10, 2002;
Training and Employment Guidance Letter (TEGL) No. 16-02, “Health Insurance Tax Credit for Eligible Trade Adjustment Assistance Recipients,” dated December 3, 2002;
Training and Employment Guidance Letter (TEGL) No. 11-02, “Operating Instructions for Implementing the Amendments to the Trade Act of 1974 Enacted by the Trade Act of 2002,” Dated October 10, 2002; and
Federal Register Notice (67 Fed. Reg.72222), dated December 4, 2002.
Background. The Trade Adjustment Assistance Reform Act of 2002 (P.L. 107-210), (the Act), was signed by the President on August 6, 2002. Title I of the Act amends the Trade Act of 1974 to consolidate the prior TAA and NAFTA-TAA programs into one comprehensive program of assistance. The Act expands the eligibility for TAA to additional groups of workers and enhances the assistance available under the program. Title II of the Act amends the Internal Revenue Code of 1986 and the Workforce Investment Act of 1998 (WIA) to establish new mechanisms by which certain TAA participants, as well as eligible Pension Benefit Guaranty Corporation (PBGC) pension recipients, can receive assistance in covering the cost of health insurance coverage.
The primary mechanism for such assistance is a federal tax credit to be administered by the Internal Revenue Service. The tax credit is equal to 65% of the amount paid by an eligible individual for coverage of the individual and certain family members under qualified health insurance coverage. The tax credit is applicable to qualified health insurance coverage costs paid by eligible individuals beginning December 2002, and the credit is to be made available on an advance payment basis by August 1, 2003. The provisions related to this tax credit are contained in sections 201 and 202 of the Act.
The Act also establishes an additional mechanism, which is intended to be used as a “bridge” to when eligible individuals can receive the tax credit on an advance basis, by authorizing the use of NEG funds under the WIA to assist in paying the cost of qualified health insurance coverage for eligible individuals. These provisions are contained in section 203 of the Act, which establishes a new section 173(g) of WIA.
Training and Employment Guidance Letter (TEGL) No. 10-02 provided information regarding the eligibility for health insurance coverage assistance, the types of health insurance coverage programs that can qualify for this assistance, the responsibilities of the states to establish and maintain appropriate systems and procedures for making available these new health insurance coverage assistance benefits to eligible individuals, procedures for certifying individuals potentially eligible for the health coverage tax credit, and procedures by which states can apply for system-building funds under newly enacted WIA section 173(f) to develop and implement the infrastructure needed to fulfill these responsibilities.
This TEGL provides specific policy guidance regarding the use of NEG funds to implement the “bridge mechanism” provision of the Act (newly enacted section 173(g) of the WIA), and identifies the procedures by which states can access NEG funds to help pay the costs of the health insurance coverage assistance and other authorized support services for eligible individuals until such time that those individuals can receive the health insurance coverage assistance through the advance payment tax credit mechanism. Policies included in this notice are subject to continuing interpretation and refinement.
OMB Apporval. OMB, under OMB Control No. 1205-0439, expiring 5/31/2003, approved the NEG reporting requirements contained herein. Respondent’s obligation to reply to these reporting requirements is mandatory (P.L. 107-210). NOTE: Persons are not required to respond to this collection of information unless it displays a currently valid OMB control number.
Disclosure Statement. Public reporting burden for this collection of information is estimated as follows:
|Paper Requirement||Average Time per Response|
|ETA 9103||90 minutes|
|ETA 9104||30 minutes|
|ETA 9106||1 hour|
|Grant Modifications||30 minutes|
|SF 424||45 minutes|
Send comments regarding this burden estimate or any other aspect of this collection, including suggestions for reducing this burden, to the U.S. Department of Labor, Office of National Response, Room N-5422, Washington, D.C. 20210 (Paperwork Reduction Project 1205-0439).
Policy Guidance. The following guidance will apply to the use of NEG funds to provide partial health insurance coverage assistance to eligible individuals. This guidance covers four subjects: (1) the eligibility requirements for individuals; (2) the allowable use of NEG funds; (3) health insurance coverage that qualifies for assistance; and (4) the entities that are eligible to apply for grant funds under WIA Sec. 173(g).
INDIVIDUALS ELIGIBLE FOR ASSISTANCE
In order for an individual to be eligible for NEG-funded health insurance coverage assistance (as well as for the new health coverage tax credit), the individual must be:
“an eligible TAA recipient” which is defined as an individual who is receiving a trade readjustment allowance (TRA) under the TAA program, or would be eligible for TRA except that he/she has not yet exhausted unemployment benefits;
“an eligible alternative TAA recipient” which is defined as an individual who is receiving benefits under a demonstration program of alternative trade adjustment assistance for older workers under section 246 of the Trade Act of 1974 (as amended by the Act), although it should be noted that the demonstration program does not commence until August 6, 2003; or
“an eligible PBGC pension recipient” which is defined as an individual who is 55 years of age or older and is receiving a pension benefit paid in whole or part by the Pension Benefit Guaranty Corporation (PBGC).
Information about the availability of health insurance coverage assistance under the NEG is disseminated to the potentially eligible workers covered by a TAA certification in those states that receive the NEG award.
When a potentially eligible worker indicates an interest in receiving the assistance, the state workforce agency determines whether the individual meets the definition of "an eligible TAA recipient" (i.e., is receiving TRA or has met the requirements for receiving TRA except for UI exhaustion).
If the worker is not receiving TRA and has not yet enrolled in training or been issued a waiver from
that enrollment requirement, the state workforce agency conducts a preliminary assessment of the worker's
If that worker was recently separated from employment, the assessment takes into account that the worker has not had a period to conduct a job search to test employability. Unless the assessment indicates an immediate need for training for such worker, it would be appropriate for the agency to issue a temporary waiver of the enrollment requirement to workers covered under the amended TAA program or prior TAA program up to the week (or a week shortly before) that is sixteen weeks after separation. The state workforce agency also arranges for reemployment services to be provided during the period of the waiver. At the time the temporary waiver expires, the waiver is reevaluated, taking into account that the worker has not become reemployed, and based upon the reevaluation, the worker is either required to enroll in training or issued an additional waiver.
For workers who have already been separated for about 16 weeks or more at the time of the preliminary assessment, that period of unemployment is taken into account to determine whether they qualify for a waiver or need to enroll in training.
It should be noted that workers certified under a petition filed on or after November 4, 2002, must enroll in training or be issued a waiver by the later of 16 weeks after separation or 8 weeks after certification (or be enrolled by the deadline established under the extenuating circumstances provision, which may not exceed an additional 45 days) to qualify for TRA. If those periods have lapsed without such action, the worker will also not be eligible for the NEG assistance.
Workers certified under NAFTA-TAA must enroll in training by the later of 16 weeks after separation or 6 weeks after certification (or by the deadline established under the extenuating circumstances provision, which may not exceed an additional 30 days) to be eligible for TRA, and if those periods have lapsed, they will also not be eligible for NEG assistance. In addition, NAFTA-TAA workers are not eligible for waivers; therefore, they must enroll in training to be eligible for NEG health insurance coverage assistance.
After a worker is determined to meet the definition of an eligible TAA recipient, the state will
need to have mechanisms in place to determine--
that he/she is not covered by other specified health insurance; and
whether he/she is covered by "qualified" health insurance for which assistance can be provided (which is described below).
After it is determined that the worker meets the requirements described in (4) above, the state will need to have mechanisms in place to use the NEG assistance (which is equal to 65% of the cost of the qualified health insurance coverage), along with the worker’s contribution (35% of such costs), to pay the qualified health insurance coverage premium, generally on a monthly basis, and preferably in one payment to the health insurance coverage provider.
ALLOWABLE USES AND LIMITATIONS ON THE USE OF NEG FUNDS
In general, NEG funds provided under section 173(g) may be used to provide assistance and supportive services, including qualifying health insurance coverage, transportation, child care, dependent care and income assistance, to eligible individuals. For both health insurance coverage and income support assistance, the assistance cannot supplant other federal, state, or local assistance for which the individual is eligible.
In order to promote consistency with, and a transition to, the advance payment tax credit, and to conserve NEG resources in a manner that will allow broad participation by the states and eligible individuals, these NEG funds may be used to pay no more than 65% of the amount paid by an eligible individual for qualified health insurance coverage of the eligible individual and qualifying family members. This is the same level of assistance provided under the tax credit mechanisms and is intended to fulfill the objective of providing a bridge to the advance payment tax credit mechanism.
In addition, the Department would generally expect the assistance provided under the NEG would be for prospective coverage, that is, for payments for coverage for months after the individual has been determined eligible for assistance under the NEG. In extraordinary cases, as demonstrated by the applicant, the Department will consider the use of NEG funds to pay reimbursement for qualified health insurance coverage premium payments that were made for coverage on or after September 1, 2002 (the full month beginning after the date of enactment). However, to qualify for such reimbursement, the individual would have to be determined to have met the eligibility requirements at the time such prior premiums were paid.
QUALIFIED HEALTH INSURANCE COVERAGE
In general, NEG funds can be used to pay for the following types of health insurance coverage assistance:
coverage under a COBRA continuation provision;
coverage under a state-based continuation provision;
coverage through a qualified state high risk pool;
coverage under a program offered to state employees;
coverage under a state-based health insurance program comparable to a program for state employees;
coverage through an arrangement between a state and
- a group health plan,
- an issuer of health insurance coverage,
- an administrator, or
- an employer;
coverage offered through a state arrangement with a private sector health insurance coverage purchasing pool;
coverage under a state-operated health plan that does not receive any Federal financial participation;
coverage under a group health plan that is available through the employment of the eligible individual's spouse; and
coverage under individual health insurance in which the eligible individual was enrolled during the entire 30-day period preceding the date of separation by which the individual became eligible for TAA assistance.
ENTITIES ELIGIBLE FOR GRANT AWARDS
In order to expedite the awarding of these grants, we expect that the application for the NEG funds will be submitted by the grant recipient under the current NEG Master Agreement between the Department and the state. This is not intended to limit the participation in, or administration of, activities carried out under the NEG by other entities, including appropriate state agencies. For example, through subgrants or the interagency transfer of NEG funds, the Governor may decide to have other agencies provide aspects of the health insurance coverage assistance. However, the use of the currently designated grant recipient as the applicant ensures that the procedures necessary to facilitate the awarding of funds are in place.
In cases where the Governor determines that an agency other than the grant recipient under the current NEG Master Agreement should be the recipient for the Health Insurance Assistance NEG, a letter signed by the Governor designating that agency as an eligible applicant for this NEG needs to be included with the grant application.
In fact, the Department strongly encourages efforts by the state to coordinate the provision of assistance under this NEG among the appropriate state agencies, such as the state insurance commission, the state health licensing and regulatory board or entity, and other departments or entities involved in the provision of health insurance coverage. We are requesting that a description of such coordination be included in the narrative section of the NEG application.
Availability of Funds. The Act appropriated $50 million to carry out the NEGs under section 173(g) for Fiscal Year 2002. Therefore, these NEG funds are currently available for award.
ADMINISTRATIVE AND PROJECT DESIGN REQUIREMENTS
Grantee organizations, administrative entities and service providers are subject to the WIA statute, regulations, grant application instructions, the terms and conditions of the grant and any subsequent modifications, and to all other applicable Federal laws (including provisions in Federal Appropriations law).
Administrative cost limitations apply to all NEG grant awards. Cost limitations shall apply to actual
expenditures. In general, a ten percent (10%) limit will apply to all NEG projects. Any costs associated with
administering a system of health insurance coverage payments must be separately identified in the application
budget and justified in the narrative.
Although administrative cost limits on NEG projects are subject to negotiation, DOL/ETA expects that most projects will be able to be implemented within the above-cited limits. Any request for a higher limit will have to be clearly and fully justified in terms of unusual project operating circumstances. Applicants should recognize that any such request will have to be negotiated and will delay the timing of the funding action.
If an indirect cost rate is applied in calculating administrative costs, the applicant must include information from the most recent approval document that identifies the approved indirect cost rate and base, the cognizant approval agency, and the date of the approval. Generally, indirect costs will only be approved at the grantee level.
Allowable Activities and Services
Funds may be used for the services described in WIA section 173(g).
Project Design and Service Operations
Provision of services in addition to health insurance coverage assistance should be consistent with the established policies and procedures of the state in which the project is to operate.
APPLICATION SUBMISSION GUIDANCE
In order to comply with the Government Paperwork Elimination Act, the information collection including the application and the reporting form is fully in an electronic format. Electronic applications are intended to provide ease of completion as well as timely processing. Specifically, e-applications will be made through the DOL/ETA Grantee Reporting System Internet Web site for NEGs at http://testetareports.doleta.gov. To submit an application electronically, applicants will need to use a Personal Identification Number (PIN), which has been assigned to each state by the Employment and Training Administration’s Office of Technical Support.
A user’s guide on preparing and submitting an application electronically has been transmitted to the ETA Regional Offices for distribution to the states. Technical assistance on the application requirements is available from the appropriate Regional Office or from the Office of National Response, Employment and Training Administration, U.S. Department of Labor, Room N-5426, 200 Constitution Avenue, NW, Washington DC 20210.
Alternatively, applications may be mailed, e-mailed or hand-delivered to:
Office of Grants and Contract Management
ATTN: E. Fred Tello, Grant Officer
U.S. Department of Labor-Employment and Training Administration
200 Constitution Avenue, NW -- Room S-4203
Washington, DC 20210
It is recommended that hard copy applications be sent via overnight mail or faxed to the attention of Mr. Tello. If sent by mail, please be advised that mail delivery in the Washington area may be delayed due to mail decontamination procedures. A copy of the application should be concurrently sent to the appropriate USDOL/ETA Regional Office.
APPLICATION FORMAT REQUIREMENTS
When submitting NEG applications to provide health insurance coverage assistance, state agencies are required to use the OMB approved forms contained in Appendix A for the collection of information including:
Completed and signed SF 424-Application for Federal Assistance. This form is the required application for requesting federal funds. Where the electronic submission option is used, the authorized signatory for the state must use the PIN, which has been assigned to the state. The entry of this PIN on the SF 424 will constitute the authorized signature.
Project Synopsis (ETA 9106). This form summarizes key aspects of the proposed project such as project type, planned number of participants, and contact information.
Planning Form (ETA 9103), which provides cumulative quarterly estimates on project scope (e.g., number of participants, exits), design (e.g., mix of services), and budget (e.g., costs by type of activity, administrative costs).
Narrative Statement. A narrative explanation must be provided in cases where one or more of the following are reflected in the project plan:
Indirect costs are included in the budget, which requires identifying the following: cognizant approval agency, approved cost rate and base, and date of approval.
“Other” costs are included in the budget, which requires identifying the specific cost items and amounts.
administrative costs related to processing payments for qualified health
insurance coverage and/or income support are included in the budget, which requires explaining how the administrative cost estimate was derived (i.e., based on the number of check payments and check processing costs.)
The applicant is free to include narrative explanations of other special factors, but the narrative should not exceed five pages.
Grant modifications will be required in the following circumstances:
To expand the approved target group within the original scope of the grant;
To increase the number of participants receiving healthcare premiums and/or the amount of expenditures for health insurance premiums;
To increase the approved amounts of administrative costs;
To change the performance period for the project;
When actual end-of-project expenditures will be less than the amount of awarded funds; and
When the amount of the award will be insufficient to satisfactorily complete the project objectives.
Grant modifications must be submitted to the Grant Officer. They may be submitted in writing or electronically.
Grant modifications will not be accepted within 90 days prior to the scheduled expiration date of the project.
Funding Approach. Applications for NEG funds can be funded in whole or in part. Full or partial funding can be at the applicant’s request or at the Secretary’s discretion. In order to ensure the effective use of NEG resources, in general these requests, when approved, will be funded partially. Where the grant award reflects a partial funding action, the grantee will be required to submit, at a later date, supplemental information to request the balance of funds. This information will be specified in the grant award letter but will include, at a minimum, current information on actual participant levels, performance outcomes, and expenditures.
Project Oversight and Reporting. Each NEG project will be subject to a review of project implementation 90 days following grant award. In addition, the grantee is required to submit to the Grant Officer a Quarterly Report (ETA 9104) of project status regarding enrollments, outcomes and expenditures.
Inquiries. Questions regarding this transmittal should be directed to Shirley Smith, Administrator, Office of National Response, at (202) 693-3501 or to the appropriate Regional Administrator. A directory of the Regional Office contacts is included as Appendix B.
Appendix A: Grant Application Forms:
Health Insurance Coverage National Emergency Grant (NEG) Cumulative Quarterly Planning Form (ETA 9103);
Health Insurance Coverage National Emergency Grant (NEG) Quarterly Report (ETA 9104).
Appendix B: USDOL/ETA Regional Office contacts