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U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210

CLASSIFICATION

UIS

CORRESPONDENCE SYMBOL

TEUMI

ISSUE DATE

July 31, 1984

RESCISSIONS

 

EXPIRATION DATE

INA

DIRECTIVE

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 28-84

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

BERT LEWIS
Administrator
for Regional Management

 

SUBJECT

:

Voluntary Health Insurance Programs for Individuals Receiving Unemployment Compensation

 

  1. Purpose. To provide information onamendments to Federal laws permitting voluntary health insurance programs for individuals receiving unemployment compensation and to provide criteria for approving and guidelines for administering such programs.

  2. References. Section 523 of Public Law 98-21.

  3. Background. Section 523 of Public Law 98-21 amended paragraph 4 of Section 3304(a) of the Internal Revenue Code of 1954 and paragraph (5) of Section 303(a) of the Social Security Act to provide that nothing in those paragraphs shall be construed to prohibit deducting an amount from unemployment compensation otherwise payable to an individual and using the amount so deducted to pay for health insurance if the individual elected to have such deduction made and such deduction was made under a program approved by the Secretary of Labor.

    These amendments permit each State, on a voluntary basis, to establish a health insuranceprogram for individuals whoare eligible for unemployment compensation for weeks of unemployment beginning on or after April 20, 1983, and who elect to have an amount deducted from their weekly unemployment benefits to pay the premium for coverage under such program.

  4. Voluntary Health Insurance Program. Each State may establish a health insurance program for recipients of unemployment compensation. However, in accordance with Secretary's Order 4-75, the Assistant Secretary for Employment and Training is delegated the responsibility for approving this program. To be approved by the Assistant Secretary of Labor, the program must provide for a health insurance benefit plan and a system for administering the program as specified in the attachment. The State will determine the terms and conditions of the health care benefits under the health insurance benefit plan. A State may contract with an insurance carrier to provide the benefits under the health insurance benefit plan or the State may be the insurance carrier.

    The system for administering the health insurance program must include methods and procedures to ensure that the program is described and offered to all claimants who are eligible for coverage as determined by the State.

  5. Detailed Instruction. The attached document contains detail information on voluntary health insurance programs.  Included in the document are criteria for approving a State plan and instructions for submitting a State plan for approval.

    ETA has also provided suggested forms and procedures for administration of a health insurance program. These guidelines are provided for the assistance of the SESA and, accordingly, are not requirements for State plans except as stated in paragraph 6, D, and items 4.a, 5, and 7 of paragraph E of the attachment.

  6. Payment of Costs of Administration. There is no provision of Federal law (Title III, Social Security Act) which authorizes the use of granted funds to pay State costs of administering activities relating to the health insurance deduction. The Department of Labor has not and will not approve the use of UI or Federal unemployment benefit programs (e.g., UCX, UCFE, Trade Act, etc.) administrative funds or an activity such as health insurance. Accordingly,any costs associated with this function must be met from other State or local funding.

  7. OMB Approval. ETA has submitted this UIPL and attachment for OMB approval. States will be notified when OMB approval is received.

  8. Action Required. Administrators should provide the above information and attached information toappropriate staff.

  9. Inquiries. Direct questions to the appropriate Regional Office.

  10. Attachment. Detailedinformation on voluntary health insurance programs.