Revised interpretation of TAA training enrollment deadline

Signed letter (https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2006/TEGL11-02_ch3.pdf):

EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM
U.S. DEPARTMENT OF LABOR, Washington, D.C. 20210
CLASSIFICATION: TAA
CORRESPONDENCE SYMBOL: ONR
DATE: May 25, 2006
TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 11-02, Change 3
TO: ALL STATE WORKFORCE AGENCIES; ALL STATE WORKFORCE LIAISONS; ALL ONE-STOP CENTER SYSTEM LEADS; ALL STATE TRADE COORDINATORS
FROM: EMILY STOVER DeROCCO, Assistant Secretary
SUBJECT: Change 3 to the Operating Instructions for Implementing the Amendments to the Trade Act of 1974 Enacted by the Trade Act of 2002- Revised Eligibility Requirements for Trade Readjustment Assistance (TRA) and Health Coverage Tax Credit (HCTC)
RESCISSIONS: None
EXPIRATION DATE: Continuing

1. Purpose. To inform the state workforce agencies (SWAs) of a revised interpretation
of the deadline for enrollment in approved training as a condition of Trade
Readjustment Allowances (TRA) eligibility for Trade Adjustment Assistance (TAA)
participants and its effect on Health Coverage Tax Credit (HCTC) eligibility.

2. References. Trade Act of 1974 (P.L. 93-619), as amended; Trade Act of 2002 (P.L.
107-210); 20 CFR part 617; 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”; TEGL No. 11-02, Change 1, “Change 1 to
the Operating Instructions for Implementing the Amendments to the Trade Act of
1974 Enacted by the Trade Act of 2002”; TEGL No. 11-02, Change 2, “Change 2 to the
Operating Instructions for Implementing the Amendments to the Trade Act of 1974
Enacted by the Trade Act of 2002”; Unemployment Insurance Program Letter No.

33-03, “Questions and Answers About Implementation of the Advance Health
Coverage Tax Credit.”

3. Background. The TAA program provides benefits and services to individuals to
help facilitate a return to sustainable employment. To help them find new
employment, certified workers may receive training in a new occupation. Extended
income support, known as TRA, is available to help support workers while
participating in training.

The TAA Reform Act of 2002 (2002 amendments) established the HCTC, which
provides a tax credit of 65% of the cost of an individual’s qualified monthly health
insurance premium and is available to individuals falling under three statutorily-
prescribed categories: “eligible TAA recipients,” “eligible Alternative Trade

Adjustment Assistance (ATAA) recipients,” and “eligible Pension Benefit Guaranty
Corporation recipients.”

The changes to the TRA eligibility requirements made in this TEGL affect the

definition of an “eligible TAA recipient.” An eligible TAA recipient is defined in the
2002 amendments as follows:

The term “eligible TAA recipient” means, with respect to any month, any
individual who is receiving for any day of such month a trade readjustment
allowance under chapter 2 of title II of the Trade Act of 1974 or who would be
eligible to receive such allowance if section 231 of such Act were applied without
regard to subsection (a)(3)(B) of such section.

Subsection (a)(3)(B) refers to the requirement that the individual has exhausted
his/her unemployment insurance (UI). The 2002 amendments changed the TRA
eligibility requirements in the Trade Act of 1974, as amended, by establishing
deadlines by which a worker must enroll in approved training or receive a written
waiver of the training requirement in order to be eligible to receive TRA.

In its guidance related to implementing the 2002 amendments and the HCTC, the
Department interpreted the statutory TRA requirements to mean that in order for an
individual to be eligible for TRA, and thus potentially eligible for HCTC, he/she
must be enrolled in training or have received a training waiver. This was true even
for weeks that occurred prior to the applicable deadlines for training enrollment. At
the time, the Department believed that its interpretation would enhance the

adjustment process and encourage earlier intervention by providing more incentive
for early enrollment in training.

4. Discussion. A GAO report (Trade Adjustment Assistance: Reforms Have Accelerated
Training Enrollment, but Implementation Challenges Remain, GAO-04-1012, September
22, 2004) on implementation of the 2002 amendments noted that one barrier to
participation in the HCTC program is that workers cannot afford to pay their entire
insurance premiums while they wait to enroll in HCTC. The GAO also noted that
the reason states are issuing so many training waivers is for workers to quickly
become eligible for HCTC, minimizing the time during which they have to pay their
entire health insurance premium. In addition, the GAO found that since states are
spending a large amount of time issuing and reviewing waivers granted to establish
HCTC eligibility, they have fewer resources to devote to performing meaningful
assessments of individuals who want to go into training.

The GAO believes that the result is workers not necessarily enrolling in training that
is best suited to their employment needs. Thus, the effect of the Department's
earlier interpretation may have been to create a large administrative burden for state
agencies without improving the program’s effectiveness at quickly returning
individuals to work.

After considerable review of the statute, the Department is revising its interpretation
of the statutory TRA eligibility requirements related to training enrollment under
the TAA program. The Department believes that the statutory requirement that a
worker be enrolled in training by a certain date inherently means that they are not
required to be enrolled in training before that date. Accordingly, the Department's
revised interpretation is that a worker is not required to be enrolled in approved
training in order to be eligible for TRA for weeks that occur before the applicable
training enrollment deadline. Therefore, prior to the applicable training enrollment
deadline, a worker may receive TRA, and thus potentially be HCTC-eligible,
without being enrolled in training, participating in training, having completed
training, or having received a training waiver. Similarly, while receiving UI for
weeks before the applicable training enrollment deadline, a worker may be an
eligible TAA recipient and potentially eligible for the HCTC without being enrolled
in training, participating in training, having completed training, or having received
a training waiver. The rest of this TEGL expands on the Department's interpretation
of the training requirement as a condition of TRA eligibility.

5. Revised TRA Eligibility Requirements. In determining a worker's TRA eligibility,
the requirement that workers be either enrolled in approved training or covered by a
training waiver in order to receive TRA does not apply for weeks that occur prior to
the training enrollment deadline as described below.

Eligibility for TRA requires that the worker enroll in approved training or receive a
waiver of the training requirement by the later of 8 weeks after the certification is
issued or 16 weeks after the worker’s total or partial separation from adversely
affected employment. This is known as the “8/16-week deadline.” In addition, the
law allows for a 45-day extension of this deadline if there are extenuating
circumstances. The 8/16-week deadline, or an extension in appropriate
circumstances, must be met whether or not the worker has exhausted his/her UI at
the time the deadline is reached. However, before the deadline is reached, the
worker need not be enrolled in training or have a waiver in order to be TRA-eligible.

6. Effects on TRA Eligibility. The revised TRA eligibility requirements detailed above
mean that for weeks of unemployment before reaching the training enrollment
deadline, a worker who has exhausted his/her UI may receive TRA if all
requirements provided in Section 231(a) of the Trade Act, as amended, are met with
the exception of the training enrollment requirement. Once the training enrollment

deadline is reached, the training requirement must be met by enrolling in training or
receiving a waiver. If the deadline is not met, TRA payments will cease beginning
the applicable week for which training enrollment or a waiver was required but the
requirement was not met.

Note that for participants who receive a waiver of the training requirement, there is
an additional requirement, explained in TEGL No. 11-02, that they be enrolled in
training by the first Monday of the week following the week in which the waiver is
terminated, whether by revocation or expiration, in order to maintain TRA

eligibility, and thus, potential HCTC eligibility. (For a detailed discussion of HCTC
Eligible TAA Recipient Criteria, please see attachment).

7. Effects on HCTC Eligibility. HCTC eligibility is tied directly to TRA eligibility.
Except as explained below, a worker who hasn’t exhausted UI is not TRA eligible,
but may still be HCTC eligible. In addition, a worker not exhausting UI need not
meet the EB work test for HCTC eligibility, even though the EB work test is required
for TRA. Because this TEGL amends the Department's interpretation of the training
enrollment deadlines for TRA eligibility it, therefore, changes the point at which an
individual becomes an eligible TAA recipient for HCTC eligibility purposes.

As stated above, for weeks of unemployment before the deadline for training
enrollment a worker may, if the worker meets other requirements set forth in the
attachment, be TRA-eligible, making him/her an eligible TAA recipient and
potentially eligible for the HCTC, without being enrolled in training, having
completed training, or having received a waiver from the training requirement. In
addition, a worker who is receiving UI for weeks of unemployment before the
training enrollment deadline may be an eligible TAA recipient if all TRA
requirements provided in Section 231(a) of the Trade Act, as amended, are met with
the exception of 231(a)(3)(B), the requirement that the individual has exhausted UI.
Under the interpretation provided in this TEGL, a worker is considered to have met
the requirement of being enrolled in training, having completed training, or having
received a waiver from training during the period before the training enrollment
deadline.

However, once the training enrollment deadline is reached, the worker must meet
the requirement for enrolling in training or receiving a waiver. If this deadline is not
met, TRA eligibility will end and the worker will cease to be an eligible TAA
recipient for HCTC purposes at the end of the month.

The effect of this change on HCTC eligibility should be to provide workers with
quicker access to the HCTC and to ease an unnecessary administrative burden on
states by eliminating the practice of issuing immediate training waivers to workers
solely or primarily for the purpose of HCTC eligibility.

8. Effects on State Administration. In TEGL 11-02, Change 1, the Department
provided states with significant flexibility in issuing training waivers in order to
enable workers to establish immediate eligibility for HCTC. As discussed in Section
3, the Department has found that the result of this policy has been that states are
issuing a large number of training waivers under the “marketable skills” waiver
category with minimal, if any, assessment completed before issuing the waiver. This
has created a large administrative burden for states in issuing and reviewing these
waivers. Moreover, once issued, these waivers also have the effect of extending the
training enrollment deadline, weakening the effectiveness of the deadline in
requiring the worker to make a timely training decision.

Although the Department is committed to ensuring workers have access to all TAA
benefits and services, including the HCTC, the Department does not believe that
issuing immediate training waivers has proven to be the most effective method of
doing so. Therefore, the Department's intent with this TEGL is that states will no
longer issue immediate waivers in order to establish HCTC eligibility. States should
use the time between certification or layoff and the training enrollment deadline to
conduct assessments and develop meaningful service plans that lead to
reemployment.

States may continue to issue training waivers under the marketable skills category in
order to meet the training enrollment deadline in cases where an initial assessment
does not indicate an immediate need for training and the state believes it would be
appropriate for the worker to test the job market in order to make a final
determination on whether or not suitable employment is available for the worker.
All waivers must be reevaluated every 30 days for the duration of the waiver period.
In any case where a marketable skills waiver is issued, the 30-day review of the
waiver should include an evaluation of whether the worker's lack of success in

obtaining employment indicates that the worker does not have sufficient marketable
skills and should be referred to training.

9. Action Required. State administrators should distribute this advisory to
appropriate staff. States must adhere to the requirements of Federal law that are
contained in this advisory.

10. Inquiries. States should direct all inquiries to the appropriate regional office.

11. Attachment.

HCTC Eligible TAA Recipient Criteria

Attachment 1 (https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2006/TEGL11-02_ch3_att1.pdf):

Attachment
HCTC Eligible TAA Recipient Criteria

The Department of Labor’s interpretation is that TRA eligibility criteria applicable to determining if an individual is an “eligible TAA recipient” for HCTC purposes is as follows:

TAA “New Program” Certifications

1. Prior to the 8/16 week deadline, if the individual is still receiving unemployment insurance (UI), or would be if he/she had applied for it, the following requirements apply to the definition of “eligible TAA recipient”:

    1. The week in question must begin more than 60 days after the petition is filed.
    2. The individual must be an adversely affected worker covered under a certification.
    3. The individual's first qualifying separation must occur on or after the impact date of such certification and before the expiration date of the certification.
    4. The individual must have 26 weeks of employment at wages of $30 or more per week in adversely affected employment in the 52 weeks preceding the separation.
    5. The individual must have been entitled to UI for a week within the first benefit period after the qualifying separation.

2. Prior to the 8/16 week deadline, if the individual exhausts UI, or would have if he/she had applied for it, the following requirements apply for receipt of TRA, and thus, in meeting the definition of an “eligible TAA recipient”:

    1. The week in question must begin more than 60 days after the petition is filed.
    2. The individual must be an adversely affected worker covered under a certification.
    3. The individual's first qualifying separation must occur on or after the impact date of such certification and before the expiration date of the certification.
    4. The individual must have 26 weeks of employment at wages of $30 or more per week in adversely affected employment in the 52 weeks preceding the separation.
    5. The individual must have been entitled to UI for a week within the first benefit period after the qualifying separation.
    6. The individual meets the extended benefit (EB) work test, unless enrolled in approved training. Note that the EB work test is required for receipt of TRA benefits if the individual is not enrolled in approved training.

3. On or after the 8/16 week deadline, if the individual is still receiving UI, or would be if he/she had applied for it, the following requirements apply in meeting the definition of “eligible TAA recipient”:

    1. The week in question must begin more than 60 days after the petition is filed.
    2. The individual must be an adversely affected worker covered under a certification.
    3. The individual's first qualifying separation must occur on or after the impact date of such certification and before the expiration date of the certification.
    4. The individual must have 26 weeks of employment at wages of $30 or more per week in adversely affected employment in the 52 weeks preceding the separation.
    5. The individual must have been entitled to UI for a week within the first benefit period after the qualifying separation.
    6. The individual must be enrolled in training or have a training waiver that was issued by the 8/16 deadline.

4. On or after the 8/16 week deadline, if the individual has exhausted UI, or would have if he/she had applied for it, the following requirements apply for receipt of TRA, and thus, in meeting the definition of “eligible TAA recipient”:

    1. The week in question must begin more than 60 days after the petition is filed.
    2. The individual must be an adversely affected worker covered under a certification.
    3. The individual's first qualifying separation must occur on or after the impact date of such certification and before the expiration date of the certification.
    4. The individual must have 26 weeks of employment at wages of $30 or more per week in adversely affected employment in the 52 weeks preceding the separation.
    5. The individual must have been entitled to UI for a week within the first benefit period after the qualifying separation.
    6. The individual meets the EB work test, required for receipt of TRA, unless enrolled in approved training.
    7. The individual must be enrolled in training or have a training waiver that was issued by the 8/16 deadline.