Federal Programs Available to
Unemployed Workers
Katelin P. Isaacs, Coordinator
Analyst in Income Security
David H. Bradley
Analyst in Labor Economics
Janemarie Mulvey
Specialist in Health Care Financing
Benjamin Collins
Analyst in Labor Policy
October 26, 2011
Congressional Research Service
7-5700
www.crs.gov
RL34251
CRS Report for Congress
Pr
epared for Members and Committees of Congress
Federal Programs Available to Unemployed Workers
Summary
Four groups of federal programs target unemployed workers: unemployment insurance, health
care assistance, job search assistance, and training. This report presents information on federal
programs targeted to unemployed workers specifically, but does not attempt to discuss means-
tested programs (such as Medicaid or SSI) that are available regardless of employment status.
When eligible workers lose their jobs, the Unemployment Compensation (UC) program may
provide up to 26 weeks of income support through the payment of regular UC benefits.
Unemployment benefits may be extended for up to 53 weeks by the temporarily authorized
Emergency Unemployment Compensation (EUC08) program. Unemployment benefits may also
be extended for up to 13 or 20 weeks by the permanent Extended Benefit (EB) program if certain
economic conditions exist within the state. Workers whose job loss is caused by foreign
competition may be eligible for extended income support through the Trade Adjustment
Assistance for Workers (TAA) program. If an unemployed worker is not eligible to receive UC
benefits and the worker’s unemployment may be directly attributed to a declared major disaster, a
worker may be eligible to receive Disaster Unemployment Assistance (DUA) benefits.
Two federal laws may aid unemployed workers in the purchase of health insurance. The first, the
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), allows unemployed
workers in certain circumstances to continue health insurance coverage from their employers. The
second, the Health Coverage Tax Credit (HCTC), allows certain TAA participants to receive an
advanceable and refundable tax credit for purchasing qualified health insurance.
Federal support for Americans seeking assistance to obtain, retain, or change employment is
undertaken by a national system of local One-Stop Career Centers (One-Stops) that were
established by the Workforce Investment Act (WIA) of 1998. A variety of services and partner
programs—notably including UC and TAA—are located within or linked to One-Stops, which
primarily provide job search assistance, career counseling, labor market information, and other
employment services. Core labor exchange services (matching job seekers and employers) are
provided by the U.S. Employment Service (ES), which was first established by the Wagner-
Peyser Act of 1933 and most recently amended under Title III of WIA. In addition to ES, Title I
of WIA authorizes resources for similar core and intensive employment services for youth, adults,
dislocated workers, and targeted populations.
WIA Title I is also the nation’s central job training legislation, providing funds for traditional, on-
the-job, customized, and other forms of training to individuals unable to obtain or retain
employment through other services.
The American Recovery and Reinvestment Act of 2009 (P.L. 111-5, known as ARRA or the 2009
stimulus package), as amended, contains several provisions related to unemployment benefits.
ARRA provisions affect unemployment income support as well as health insurance (COBRA and
HCTC) programs.
This report will be updated with major new legislation.
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Federal Programs Available to Unemployed Workers
Contents
Unemployment Insurance for Unemployed Workers ...................................................................... 1
Unemployment Compensation .................................................................................................. 2
Emergency Unemployment Compensation......................................................................... 3
Extended Benefits ............................................................................................................... 3
EUC08 and EB Interactions ................................................................................................ 4
Trade Readjustment Allowance: UI Extension for Workers Affected by Foreign Trade........... 5
Other TAA Benefits............................................................................................................. 6
Disaster Unemployment Assistance .......................................................................................... 6
Health Care Assistance for Unemployed Workers........................................................................... 7
Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272)............................... 7
Health Coverage Tax Credit ...................................................................................................... 8
Job Search Assistance for Unemployed Workers............................................................................. 9
Wagner-Peyser Act of 1933....................................................................................................... 9
Employment Services.......................................................................................................... 9
Wagner-Peyser Act Funding.............................................................................................. 10
Job Training Assistance for Unemployed Workers........................................................................ 10
Workforce Investment Act of 1998.......................................................................................... 10
WIA State Formula Grant Programs for Job Training and Related Services .................... 10
National Training Programs for Special Populations ........................................................ 11
Other Targeted Competitive Grant Programs.................................................................... 12
Workforce Investment Act Funding .................................................................................. 13
Targeted Federal Job Training Activities: Trade Adjustment Assistance and
Community Service Employment for Older Americans....................................................... 14
Trade Adjustment Assistance Training.............................................................................. 14
Community Service Employment for Older Americans ................................................... 15
Employer Education Assistance .............................................................................................. 15
Tables
Table 1. Workforce Investment Act Title I FY2010 Appropriations.............................................. 14
Contacts
Author Contact Information........................................................................................................... 16
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Federal Programs Available to Unemployed Workers
here are four groups of federal programs that target unemployed workers: unemployment
insurance programs, health care assistance, job search assistance, and training. This report
T describes these programs, how they interact with each other, and their funding.
Unemployed workers and their families may experience substantial income loss. If the
unemployed worker’s family income is low enough, there are a number of means-tested benefits
and programs for which the unemployed worker’s family might qualify (e.g., Temporary
Assistance for Needy Families, SSI, or Medicaid). Eligibility for such benefits is not conditional
on one’s current employment status. This report does not attempt to discuss these means-tested
benefits and programs.
Unemployment Insurance for Unemployed Workers
A variety of benefits may be available for unemployed workers. When eligible workers lose their
jobs, the Unemployment Compensation (UC) program may provide income support through the
payment of UC benefits. Those who exhaust UC benefits may be eligible for additional weeks of
unemployment compensation through the temporary Emergency Unemployment Compensation
(EUC08) program or through the permanent Extended Benefit (EB) program. Tiers I and II of
EUC08 are available in all states. If certain economic conditions exist in a state, workers may be
eligible for additional weeks of unemployment compensation through tiers III and IV of EUC08.
Certain groups of workers who lose their jobs on account of international competition may
qualify for additional or supplemental income support through Trade Adjustment Act (TAA)
programs. If an unemployed worker is not eligible to receive UC benefits and the worker’s
unemployment may be directly attributed to a declared major disaster, a worker may be eligible to
receive Disaster Unemployment Assistance (DUA) benefits.1
The American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5) contained provisions
affecting unemployment benefits.2 ARRA temporarily increased benefits by $25 per week (the
Federal Additional Compensation, or FAC, which expired May 29, 2010); extended the EUC08
program through January 1, 2010; provided for 100% federal financing of the EB program
through January 1, 2010; and allowed states the option of temporarily easing EB eligibility
requirements. P.L. 111-92 expanded the number of weeks available in the EUC08 program
through the creation of two additional tiers. P.L. 111-118 extended the EUC08 program, 100%
federal financing of the EB program, and the $25 FAC benefit through the end of February 2010.
These same three measures were extended through April 5, 2010, by P.L. 111-144 and through
June 2, 2010, by P.L. 111-157. P.L. 111-205 extended the availability of EUC08 through
November 27, 2010, and 100% federal financing of EB through December 1, 2010. P.L. 111-205
did not, however, extend the authorization for the $25 FAC benefit, which expired on May 29,
2010. Most recently, P.L. 111-312 extends EUC08 benefits until December 31, 2011, and 100%
federal financing of EB through January 4, 2012.
1 For a more comprehensive review of these income support programs, see CRS Report RL33362, Unemployment
Insurance: Programs and Benefits, by Katelin P. Isaacs and Julie M. Whittaker; CRS Report RS22718, Trade
Adjustment Assistance for Workers (TAA) and Alternative Trade Adjustment Assistance (ATAA), by John J. Topoleski;
and CRS Report RS22022, Disaster Unemployment Assistance (DUA), by Julie M. Whittaker.
2 For more information on provisions in the 2009 stimulus package that affected unemployment benefits, see CRS
Report R40368, Unemployment Insurance Provisions in the American Recovery and Reinvestment Act of 2009, by
Alison M. Shelton and Julie M. Whittaker.
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Federal Programs Available to Unemployed Workers
Unemployment Compensation
The cornerstone of an unemployed worker’s income security is the joint federal-state UC
program,3 which provides income support through the payment of UC benefits. The underlying
framework of the UC system is contained in the Social Security Act (the Act). Title III of the Act
authorizes grants to states for the administration of state UC laws, Title IX authorizes the various
components of the federal Unemployment Trust Fund (UTF), and Title XII authorizes advances
or loans to insolvent state UC programs. UC is financed by federal taxes under the Federal
Unemployment Tax Act (FUTA) and by state payroll taxes under the State Unemployment Tax
Acts (SUTA).
In FY2010, states spent an estimated $65.2 billion on regular UC benefits. The federal
government appropriates funds for UC program administration (an estimated $5.7 billion in
2010), the federal share of EB payments (an estimated $11.5 billion in 2010), the EUC08
program (an estimated $72.0 billion in 2010), and federal loans to insolvent state UC programs.
The 2009 stimulus package provided $500 million in additional funds (i.e., on top of the 2009
federal allocations for administration) for states to use to administer UC programs.4
The UC program pays benefits to covered workers who become involuntarily unemployed for
economic reasons and meet state-established eligibility rules. The UC program generally does not
provide UC benefits to the self-employed, to those who are unable to work, or to those who do
not have a recent earnings history. States usually disqualify claimants who lost their jobs because
of inability to work, unavailability for work, or a labor dispute, who voluntarily quit without good
cause, who were discharged for job-related misconduct, or who refused suitable work without
good cause. To receive UC benefits, claimants must have enough recent earnings to meet their
state’s earnings requirements. The 2009 stimulus package provided up to a total of $7 billion in
incentive monies for states to modernize their Unemployment Insurance (UI) programs to include
a worker’s more recent work history and two of four optional provisions relating to (1) part-time
job-seekers, (2) voluntary separations for “compelling family reasons,” (3) participation in
qualifying training programs, or (4) dependents’ allowances.
Weekly maximums in January 2010 ranged from $235 (Mississippi) to $629 (Massachusetts) and,
in states that provide dependent’s allowances, up to $943 (Massachusetts). In November 2010, the
average weekly benefit was $302. Regular UC benefits are available for up to 26 weeks (more in
Massachusetts and Montana). The average regular UC benefit duration in November 2010 was 19
weeks.5 In 2009, 40% of all U.S. unemployed workers received UC benefits. At the end of the
week of November 27, 2010, about 4.2 million unemployed workers were receiving UC.
3 For more information on UC, see CRS Report RS22538, Unemployment Compensation: The Cornerstone of Income
Support for Unemployed Workers, by Julie M. Whittaker, and CRS Report RL33362, Unemployment Insurance:
Programs and Benefits, by Katelin P. Isaacs and Julie M. Whittaker.
4 For more information on provisions in the 2009 stimulus package that affect unemployment benefits, see CRS Report
R40368, Unemployment Insurance Provisions in the American Recovery and Reinvestment Act of 2009, by Alison M.
Shelton and Julie M. Whittaker.
5 Tiers I and II of the temporary Emergency Unemployment Compensation (EUC08) program provide up to 34
additional weeks of benefits in all states. In states with unemployment rates above certain levels, tiers III and IV of
EUC08 benefits and/or the permanent, federal-state Extended Benefit (EB) program may offer additional weeks of
benefits.
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Emergency Unemployment Compensation
On June 30, 2008, the EUC08 program was created by P.L. 110-252.6 This is the eighth time
Congress has created a federal temporary program that has extended unemployment
compensation during an economic slowdown. On November 21, 2008, the President signed P.L.
110-449, the Unemployment Compensation Extension Act of 2008, into law. P.L. 110-449
expanded the potential duration of the EUC08 benefit from up to 13 weeks of EUC08 to a
maximum of 20 weeks. It also created a second tier of benefits for workers in states with high
unemployment of up to a maximum of an additional 13 weeks of tier II EUC08 benefits (for up to
a cumulative 33 weeks of EUC08 benefits).
On February 27, 2009, the President signed the 2009 stimulus package (ARRA), P.L. 111-5,
which authorized the EUC08 program through December 2009 and contained temporary
provisions for 100% financing of the EB program and a $25 additional weekly benefit for
individuals receiving regular UC, EUC08, EB, DUA, or TAA (this $25 benefit expired May 29,
2010).
On November 6, 2009, the President signed P.L. 111-92, the Worker, Homeownership, and
Business Assistance Act of 2009, into law. P.L. 111-92 expanded benefits available in the EUC08
program. Tier I benefits continue to be up to 20 weeks in duration and Tier II benefits are now 14
weeks in duration (compared with 13 previously) and no longer are dependent on a state’s
unemployment rate.7 The new Tier III benefit provides up to 13 weeks of EUC08 benefits to those
workers in states with an average unemployment rate of at least 6%. The new Tier IV benefit may
provide up to an additional six weeks of benefits if the state unemployment rate is 8.5% or higher.
The availability of the EUC08 program has been subsequently extended by P.L. 111-118, P.L.
111-144, P.L. 111-157, P.L. 111-205, and P.L. 111-312. Most recently, P.L. 111-312, the Tax
Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, extends the
authorization of the EUC08 program until the week ending on or before January 3, 2012 (i.e.,
January 1, 2012, in New York state; December 31, 2011, in all other states).
A current listing of states that have triggered on for tiers III and IV, when the EUC08 program is
authorized, can be found at http://www.workforcesecurity.doleta.gov/unemploy/claims_arch.asp.
Extended Benefits
The EB program, established by P.L. 91-373 (26 U.S.C. 3304 note), may extend UC benefits at
the state level if certain economic conditions exist within the state. The EB program is
permanently authorized, and is triggered when a state’s insured unemployment rate (IUR)8 or
total unemployment rate (TUR)9 reaches certain levels. All states must pay up to 13 weeks of EB
6 For a detailed explanation of the EUC08 program, see CRS Report RS22915, Temporary Extension of Unemployment
Benefits: Emergency Unemployment Compensation (EUC08), by Katelin P. Isaacs and Julie M. Whittaker.
7 Although EUC08 tier I and II benefits are not conditioned on unemployment conditions in the state, workers do have
to meet additional requirements.
8 The IUR (insured unemployment rate) is the ratio of UC eligible unemployed workers to all UC eligible workers
(employed and unemployed) in the labor force.
9 The TUR (total unemployment rate) is the ratio of unemployed workers (without regard to UC eligibility) to all
workers (employed and unemployed) in the labor force.
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if the IUR for the previous 13 weeks is at least 5% and is 120% of the average of the rates for the
same 13-week period in each of the two previous years. There are two other optional thresholds
that states may choose. If the state has chosen a given option, they would provide the following:
• Option 1: an additional 13 weeks of benefits if the state’s IUR is at least 6%,
regardless of previous years’ averages.
• Option 2: an additional 13 weeks of benefits if the state’s TUR is at least 6.5%
and is at least 110% of the state’s average TUR for the same 13-week period in
either of the previous two years; an additional 20 weeks of benefits if the TUR is
at least 8%.
In addition to all state requirements for regular UC eligibility, the EB program requires claimants
to have at least 20 weeks of full-time insured employment or the equivalent in their base period,
and to conduct a systematic and sustained work search.10 A current listing of states that have
triggered on for EB can be found at http://www.workforcesecurity.doleta.gov/unemploy/
claims_arch.asp.
Under ARRA, as amended, the federal government temporarily finances 100% of the EB program
through January 4, 2012 (under permanent law, the federal government finances 50% of the EB
program and states finance the other 50%).
Temporary EB Trigger Modifications in P.L. 111-312
P.L. 111-312 made some temporary, technical changes to certain triggers in the EB program. P.L.
111-312 allows states to temporarily use lookback calculations based on three years of
unemployment rate data (rather than the current lookback of two years of data) as part of their
mandatory IUR and optional TUR triggers if states would otherwise trigger off or not be on a
period of EB benefits. Using a two-year vs. a three-year EB trigger lookback is an important
adjustment because some states are likely to trigger off of their EB periods in the near future
despite high, sustained—but not increasing—unemployment rates.
States implement the lookback changes individually by amending their state UC laws. These state
law changes must be written in such a way that if the two-year lookback is working and the state
would have an active EB program, no action would be taken. But if a two-year lookback is not
working as part of an EB trigger and the state is not triggered on to an EB period, then the state
would be able to use a three-year lookback. This temporary option to use three-year EB trigger
lookbacks expires the week on or before December 31, 2011.
EUC08 and EB Interactions
The EB program should not be confused with the similarly named EUC08. The EUC08 program
is temporary and EUC08 Tiers I and II apply to all states, while EUC08 Tiers III and IV apply to
states with high and very high unemployment, respectively. The EB program is permanently
authorized and applies only to certain states on the basis of state unemployment conditions.
10 The base period is the time period during which wages earned and/or hours/weeks worked are examined to determine
a worker’s monetary entitlement to UI. Almost all states use the first 4 of the last 5 completed calendar quarters
preceding the filing of the claim as their base period.
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When it is available, the EUC08 program allows states to determine which benefit, EB or EUC08,
is paid first. Most states have opted to pay EUC08 benefits before EB. Alaska has opted to pay
EB before EUC08 benefits.
An exception to the payment order may be made if an individual claimed EB for at least one
week of unemployment after exhausting the first two tiers of EUC08 and prior to the enactment
of P.L. 111-92, which created the new EUC Tiers III and IV. P.L. 111-92 gave states the option of
paying EB to an otherwise eligible individual prior to the payment of any EUC08 benefits that are
payable on account of the Worker Assistance Act amendments to the EUC08 program (or vice
versa in the case of Alaska).
Trade Readjustment Allowance: UI Extension for Workers Affected
by Foreign Trade
The Trade Adjustment Assistance for Workers (TAA)11 program, established by the Trade
Expansion Act of 1962 (P.L. 87-794) and now authorized by the Trade Act of 1974 (P.L. 93-618),
as amended, extends unemployment and training benefits to workers dislocated by international
trade. To gain TAA eligibility, a group of workers (or a union, firm, or state on behalf of a group
of workers) petitions the Department of Labor (DOL), who investigates whether import
competition “contributed importantly” to their job loss or whether their firm has shifted
production of like articles or services overseas.
TAA was reauthorized through 2014 by the Trade Adjustment Assistance Act of 2011 (P.L. 112-
40). The provisions described in this section are authorized through 2013. In 2014, the program
will revert to the more restrictive eligibility criteria and lower benefit levels specified by the
Trade Act of 2002 (P.L. 107-210) for one calendar year before authorization for the program
expires on December 31, 2014.
TAA is funded fully by the federal government. DOL receives a single appropriation that it then
allocates to the program’s components. At the federal level, TAA is administered by and is part of
the federal budget for DOL. Claims for TAA benefits by individual workers are administered by
the state agencies under agreements and contracts with DOL.
Trade Readjustment Allowance (TRA) is an income support program available to TAA-eligible
workers who are enrolled in eligible training programs who have exhausted their UC. A worker’s
weekly TRA benefit equals his or her final UC benefit and begins the first week in which the
worker is no longer entitled to UC. There are two stages of TRA:
• Basic TRA is available to workers who have exhausted UC and have either (1)
enrolled in qualified training, (2) completed a qualified program, or (3) received
a waiver from training. The total basic TRA benefit is equal to 52 times the
worker’s weekly UC benefit level minus any UC benefits collected. Assuming a
constant benefit level, UC and basic TRA combine to offer 52 weeks of income
support. UC benefits offset TRA, so in cases where a worker is entitled to 52 or
more weeks of UC, the worker will not collect any basic TRA benefits.
11 For more information on TAA, see CRS Report R42012, Trade Adjustment Assistance (TAA) for Workers, by
Benjamin Collins.
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• Additional TRA is available to workers who have exhausted basic TRA and are
enrolled in an eligible training program. Workers can collect up to 65 weeks of
additional TRA (for a total of 117 weeks of TRA) as long as they remain in an
eligible training program. In cases where a worker has collected 117 weeks of
TRA and is still enrolled in a training program that leads to a degree or industry-
recognized credential, the worker may collect TRA for up to 13 more weeks (130
weeks total) if the worker will complete the training program during that time.
As is the case with basic TRA, UC benefits offset additional TRA. In cases where
a worker is eligible for more than 52 weeks of UC, the worker’s additional TRA
benefit will be reduced by the number of weeks beyond 52 that he or she collects
UC.
According to DOL, approximately 28,000 individuals collected TRA in FY2010 at a cost of $93
million. DOL noted that eligibility for EUC08 and EB reduced the number of TRA participants
and limited their time in the program. In FY2008, the last full year when EUC08 and EB were not
widely available, TRA outlays were $523 million.
Other TAA Benefits
TAA-eligible workers may be provided with job training through the TAA. This assistance is
discussed in the section below entitled “Trade Adjustment Assistance.”
TAA-certified workers who are unable to find employment in their local commuting area may be
eligible for job search and relocation allowances. These programs are available at the states’
discretion and offer allowances that cover up to 90% of qualified job search or relocation costs up
to $1,250 for each benefit.
Reemployment Trade Adjustment Assistance (RTAA) is a wage insurance program for TAA-
certified workers aged 50 and over who secure reemployment at a lower wage than their certified
jobs. RTAA is available to workers with a reemployment wage of less than $50,000 per year and
provides a wage supplement equal to 50% of the difference between the worker’s reemployment
wage and the wage at his or her certified job. Workers can be enrolled in RTAA for up to two
years and can collect a maximum benefit of $10,000. RTAA was first established by the Trade Act
of 2002 (P.L. 107-210) and was reauthorized along with the rest of the TAA program in October
2011.
Disaster Unemployment Assistance
The Disaster Unemployment Assistance (DUA) program provides monetary assistance to
individuals unemployed as a direct result of a major disaster who are not eligible for regular UC
benefits.12 DUA is funded through the Federal Emergency Management Agency (FEMA) and is
administered by DOL through each state’s UC agency.
First created in 1970 through P.L. 91-606, DUA benefits are authorized by the Robert T. Stafford
Disaster Relief and Emergency Relief Act (the Stafford Act), which authorizes the President to
12 See CRS Report RS22022, Disaster Unemployment Assistance (DUA), by Julie M. Whittaker, for details on the
DUA program.
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issue a major disaster declaration after state and local government resources have been
overwhelmed by a natural catastrophe or, “regardless of cause, any fire, flood, or explosion in any
part of the United States” (42 U.S.C. 5122(2)). On the basis of the request of the affected state’s
governor, the President may declare that a major disaster exists. The declaration identifies the
areas in the state eligible for assistance. The declaration of a major disaster provides the full range
of disaster assistance available under the Stafford Act, including, but not limited to, the repair,
replacement or reconstruction of public and non-profit facilities, cash grants for the personal
needs of victims, housing, and unemployment assistance related to job loss from the disaster.
In FY2006, DUA benefit payments totaled $401 million. This was an atypical outlay and
reflected the severity of the Hurricane Katrina disaster. DUA benefit payments totaled $9 million
in FY2007, $7 million in FY2008, and $17.3 million in FY2009.13
Health Care Assistance for Unemployed Workers
Two federal laws may aid unemployed workers in the purchase of health insurance. The first, the
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), allows unemployed
workers in certain circumstances to purchase continued health insurance coverage from their
previous employers. The second, the Health Coverage Tax Credit (HCTC), allows certain TAA
and RTAA participants to receive an advanceable and refundable tax credit for purchasing health
insurance.
Consolidated Omnibus Budget Reconciliation Act of 1985
(P.L. 99-272)
Title X of COBRA14 requires certain employers who offer health insurance to continue to make
coverage available for their former employees under certain circumstances. Congress approved
the legislation to expand access to coverage at group rates to qualified employees and their
families who are faced with loss of coverage due to certain events, including termination or
reduction in hours of employment (for reasons other than gross misconduct). Although the law
allows employers to charge 102% of the group plan premium, for some this can be less expensive
than comparable coverage available in the individual insurance market.
COBRA coverage generally lasts 18 months but, depending on the circumstances, can last for
longer periods. COBRA requirements also apply to self-insured firms. An employer must comply
with COBRA even if it does not contribute to the health plan; it need only maintain such a plan to
come under the statute’s continuation requirements. State and local workers are also covered by
COBRA.
However, not all individuals who lose their jobs have access to COBRA. For example, firms with
fewer than 20 employees are exempt from federal COBRA, but some states do have special
programs for small employers. Additionally, firms that do not provide access to health insurance
to current employees (including those that previously provided access but went out of business)
13 Data provided by the U.S. Department of Labor.
14 For more information on COBRA, see CRS Report R40142, Health Insurance Continuation Coverage Under
COBRA, by Janet Kinzer.
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are not required to provide access to COBRA coverage. Among those individuals with access to
COBRA, the cost of the COBRA premiums may be prohibitive. Since most employers subsidize
health insurance premiums for their workers, the 102% COBRA premium may not be affordable
for the unemployed, especially when compared to unemployment compensation. In 2008, an
average COBRA premium was about $400 per month for individual coverage ($4,798 annually)
and $1,078 per month for family coverage ($12,934 annually).15 Average weekly unemployment
benefits were $297 in 2008.16 When converted to a monthly basis of $1,237 a month, these
premiums may consume a large share of one’s monthly unemployment benefits, especially for
those purchasing family coverage. These premium costs are most likely the reason for low
COBRA participation. According to surveys of the unemployed eligible for COBRA, the
participation rate ranges from 18% to 26% (or about 1 in 4 workers).17
Provisions in ARRA helped to mitigate the financial barriers of COBRA coverage to certain
unemployed workers18 by providing COBRA premium subsidies of 65% to help the unemployed
afford health insurance coverage from their former employers. The subsidy is provided in the
form of a 65% credit that employers use to offset payroll taxes they would otherwise pay. Eligible
individuals are to pay the remaining 35% of the premium. The subsidy is available for up to 15
months to those individuals who meet the income test and are involuntarily terminated on or after
September 1, 2008, and before May 31, 2010. The subsidy is also available for qualifying
affected federal workers and workers covered under state COBRA laws targeted to employers
with less than 20 employees (often referred to as mini-COBRA laws).
The full subsidy is available for individuals whose modified adjusted gross income (AGI) during
the tax year is no more than $125,000 for single filers (or $250,000 for joint filers). The subsidy
is phased-out for higher income individuals with a reduced subsidy for individuals with modified
AGI less than $145,000 for single filers (and $290,000 for joint filers). If individuals receive the
subsidy and their income exceeds the levels specified above, the amount of the subsidy will be
recaptured when they file their income taxes. To avoid recapture they may waive their rights to
the subsidy and still enroll in COBRA and pay the full premium. However, waiving their right is a
permanent decision, and they would not be allowed to take the subsidy in the future.
Health Coverage Tax Credit
TAA-certified workers receiving TRA, UI in lieu of TRA, or RTAA wage insurance may be
eligible to for a Health Coverage Tax Credit (HCTC).19 The HCTC is a refundable, advanceable
tax credit for eligible individuals who purchase qualified health insurance.20
15 CRS estimate based on data from Kaiser Family Foundation, Worker and Employer Contributions for Premiums,
Employer Health Benefits 2008 Annual Survey.
16 CRS estimate based on average weekly unemployment compensation for 2008 of $297 from Department of Labor,
Employment and Training Administration, Unemployed Insurance Data Summary for 2008.
17 Spencer’s Benefits Reports, 2006, COBRA Survey: More Were Eligible, More Elected, Cost Was 145% of Active
Employee Cost (Chicago: CCH a Wolters Kluwer Company, 2006).
18 See CRS Report R40420, Health Insurance Premium Assistance for the Unemployed: The American Recovery and
Reinvestment Act of 2009, coordinated by Janemarie Mulvey.
19 Pension Benefit Guaranty Corporation (PBGC) payees who are at least 55 years old may also be eligible for the
HCTC.
20 For more information on the HCTC, see CRS Report RL32620, Health Coverage Tax Credit, by Bernadette
Fernandez.
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The Trade Adjustment Assistance Extension Act of 2011 (P.L. 112-40) set the HCTC at 72.5% of
qualified premium costs. The credit can be claimed when an eligible worker files his or her tax
return or it can also be paid in advance to insurers, allowing workers to benefit before they file
their tax returns. HCTC recipients cannot be enrolled in certain other health insurance, including
Medicaid or employment-based insurance for which the employer pays at least half the cost, nor
can they be entitled to Medicare.
TRA recipients can receive the HCTC for one month longer than they are eligible for TRA.
RTAA recipients may receive the HCTC for two years. The HCTC program will expire on
January 1, 2014. This expiration will coincide with the availability of new federal tax credits for
health coverage under the Patient Protection and Affordable Care Act (P.L. 111-148).
Job Search Assistance for Unemployed Workers
Federal support for Americans seeking assistance to obtain, retain, or change employment is
undertaken by a national system of local One-Stop Career Centers (One-Stops). One-Stops were
established by law under the Workforce Investment Act of 1998 (WIA, P.L. 105-220), but had
been encouraged by the DOL since it began awarding states One-Stop development grants in
1993. Although One-Stops bring together employment and training services of approximately 20
required partners, the central component of all One-Stops is a labor exchange system that is
universally accessible to job seekers and employers. This labor exchange system is undertaken by
the U.S. Employment Service (ES), first established by the Wagner-Peyser Act of 1933.
Wagner-Peyser Act of 1933
The Wagner-Peyser Act established the Employment Service21 as a system jointly operated by
DOL and the state employment security agencies. The central mission of the ES is to facilitate the
match between individuals seeking employment and employers seeking workers. Services are
open to all without fees.
Employment Services
Local ES offices are known by many names, such as Employment Service, Job Service, One-Stop
Career Center, and Workforce Development Center. These offices offer an array of services to job
seekers and employers, including career counseling, job search workshops, labor market
information, job listings, applicant screening, and referrals to job openings. States provide ES
services through three tiers of service delivery: self-service, facilitated self-help, and staff-
assisted. As the names of the tiers imply, progressively more active staff involvement is required
as services range from internet job postings to career counseling.
Upon the establishment of the Unemployment Compensation program in 1935, ES offices also
began to administer the UC “work test” requirements. These offices monitor UC claimants to
ensure that they are able to work, available for work, and actively seeking work. For the recently
21 For more information on ES, see CRS Report RL30248, The Employment Service: The Federal-State Public Labor
Exchange System, by Alison Pasternak and Ann Lordeman.
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unemployed, the ES processes UC income support claims while helping the individual find new
employment.
Wagner-Peyser Act Funding
Total funding for the Wagner-Peyser activities is $796.7 million for FY2010. These activities
include grants to states, technical assistance and training/state workforce agencies retirement, and
workforce information. Also, ARRA provided an additional $400 million for ES operations in
FY2009.
Job Training Assistance for Unemployed Workers
The nation’s central workforce development legislation is the Workforce Investment Act of 1998
(WIA). In addition, the act established linkages between WIA training activities and three other
populations targeted by federal programs: workers eligible for TAA, military veterans, and
workers over the age of 55 covered under the Older Americans Act of 1965.22
Workforce Investment Act of 1998
WIA includes titles that authorize programs for job training, adult education and literacy (the
Adult Education and Family Literacy Act), vocational rehabilitation (the Rehabilitation Act of
1973), and the Employment Service (the Wagner-Peyser Act of 1933). Title I of WIA23 provides
employment and training services for unemployed and underemployed individuals through three
state formula grant programs (adults, dislocated workers, and youth) and a number of national
programs. WIA programs operate on a program year (PY) of July 1 to June 30. FY2010
appropriations fund programs from July 1, 2010, until June 30, 2011. Although WIA authorized
funding through September 30, 2003, WIA programs continue to be funded through annual
appropriations. Table 1 provides detailed national funding information for WIA Title I programs.
The WIA programs are briefly described below.
WIA State Formula Grant Programs for Job Training and Related Services
The three formula grant programs for youth, adult, and dislocated workers provide funding for
employment and training activities provided by the national system of One-Stop Career Centers.
Statutory formulas distribute funds to states on the basis of measures of unemployment and
poverty status for youth and adult allocations and unemployment measures only for dislocated
worker allocations. States in turn distribute funds, again by formula, to local workforce
investment boards.
22 Although not discussed here, it should be noted that other federal education and training programs provide support
that could assist the unemployed in reaching career goals, even though these programs do not explicitly target an
unemployed population (e.g., student financial assistance authorized under Title IV of the Higher Education Act of
1965 and the Lifetime Learning Credit).
23 For more information on WIA, see CRS Report R41135, The Workforce Investment Act and the One-Stop Delivery
System, by David H. Bradley.
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Employment Services for Adults
This formula grant funds employment and training services through a “sequential service”
strategy to both unemployed and employed individuals ages 18 and older. Any individual may
receive “core” services (e.g., job search assistance). To receive “intensive” services (e.g.,
individual career planning), an individual must have received core services and need intensive
services to become employed or to obtain or retain employment that allows for self-sufficiency.
To receive job training (e.g., occupational skills training), an individual must have received
intensive training and need training services to become employed or to obtain or retain
employment that allows for self-sufficiency. In FY2010, funding for state grants for adults is
$862 million. Also, ARRA provided an additional $500 million for adult activities in PY2009.
Employment Services for Dislocated Workers
A majority (approximately 80%) of WIA dislocated worker funds are allocated by formula grants
to states (which in turn allocate funds to local entities) to provide training and related services to
individuals who have lost their jobs and are unlikely to return to those jobs or similar jobs in the
same industry. The remainder of the appropriation is reserved by DOL for a National Reserve
account, which in part provides for National Emergency Grants to states or entities (as specified
under Section 173 of WIA). Grants under this section are for employment and training assistance
to workers affected by major economic dislocations, such as plant closures or mass layoffs. In
FY2010, funding for state grants for dislocated worker training activities is $1.2 billion and is
$226 million for the National Reserve. Also, ARRA provided an additional $1.3 billion for state
formula grants for dislocated workers and an additional $200 million for the National Reserve in
PY2009.
Employment Services for Youth
This formula grant program provides training and related services to low-income youths aged 14-
21 who face barriers to employment. Services prepare both in-school and out-of-school youth for
employment and post-secondary education by linkages between academic and occupational
learning. In FY2010, funding for state grants for youth activities is $924 million. Also, ARRA
provided an additional $1.2 billion for youth activities in PY2009.
National Training Programs for Special Populations
WIA authorizes several national grant programs that provide training funds to targeted
populations. Job Corps and programs for Native Americans and migrant and seasonal farm
workers are generally found in all states.
Job Corps
This primarily residential job training program, first established in 1964, provides services to
low-income individuals aged 16-24 primarily through contracts administered by DOL with
corporations and nonprofit organizations. Currently, there are 123 Job Corps centers in 48 states,
the District of Columbia, and Puerto Rico. A new center is scheduled to open in PY2010
(Wisconsin) and three additional centers are under construction, including the first centers in each
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of the remaining two states, New Hampshire and Wyoming. In FY2010, funding for Job Corps is
$1.7 billion. Also, Job Corps received an additional $250 million in the ARRA for PY2009.
Native Americans Program
This competitive grant program provides training and related services to low-income Indians,
Alaska Natives, and Native Hawaiians through grants to Indian tribes and reservations and other
Native American groups. In FY2010, funding for the Native Americans program is $52.8 million.
Migrant and Seasonal Farmworker Program
This competitive grant program provides training and related services, including technical
assistance, to disadvantaged migrant and seasonal farmworkers and their dependents through
discretionary grants awarded to public, private, and nonprofit organizations. This program is also
referred to as the National Farmworker Jobs Program and is funded in FY2010 at $84.6 million.
Other Targeted Competitive Grant Programs
Additional competitive grant programs are specified in either the WIA legislation itself or in
appropriations language for WIA.
Veterans’ Workforce Investment Program
This program provides training and related services to veterans through competitive grants to
states and nonprofit organizations. It has been administered by DOL’s Veterans’ Employment and
Training Service since FY2001. In FY2010, funding for the Veterans’ Workforce Investment
Program is $9.6 million.
Green Jobs Innovation Fund
Authorized under Section 171 of WIA, this competitive grant program will fund a variety of
entities to train individuals to work in green occupations and sectors and to provide access to
green career pathways. The approaches to training that DOL’s Employment and Training
Administration (ETA) is likely to pursue will be based on the experiences of the various ARRA
competitive grantees for energy efficiency and renewable energy activities and may include
apprenticeship programs, career pathways programs, and targeted programs for individuals with
multiple barriers to employment. In FY2010, funding for the Green Jobs Innovation Fund is $40
million.
Workforce Data Quality Initiative
Authorized under Section 171 of WIA, this competitive grant program will provide resources to
up to 12 states to implement the Workforce Data Quality Initiative (WDQI), which is a joint
initiative started in FY2010 between ETA and the U.S. Department of Education (ED). The
WDQI is intended to enable state workforce agencies to build longitudinal data systems to merge
workforce and education data. The WDQI complements the ARRA-funded State Longitudinal
Data System program in the ED. In FY2010, funding for the WDQI is $12.5 million.
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Ex-Offender Reintegration
This competitive grant program combines two previous demonstration projects, the Prisoner
Reentry Initiative (PRI) and the Responsible Reintegration of Youthful Offenders (RRYO). PRI,
which was first funded in FY2005, supports faith-based and community organizations that help
recently released prisoners find work when they return to their communities. RRYO, first funded
in FY2000, supports projects that serve young offenders and youth at risk of becoming involved
in the juvenile justice system. In FY2008, the Reintegration of Ex-Offenders program combined
the PRI and RRYO into a single funding stream. In FY2010, funding for this single program is
$108 million.
Community-Based Job Training Grants/Career Pathways Innovation Fund
This competitive grant program, also known as the Community College Initiative, funds entities
to strengthen the capacity of community colleges to train workers in the skills required to succeed
in high-growth, high-demand industries. Community-Based Job Training (CBJT) grants were first
funded in FY2005, with funds drawn from the Dislocated Worker National Reserve. The
Consolidated Appropriations Act, 2010 (P.L. 111-117) changed the name of this program to the
Career Pathways Innovation Fund but the purpose remains the same as the CBJT program. In
addition, P.L. 111-117 changed the source of funding for the Career Pathways Innovation Fund
from the Dislocated Workers’ National Reserve fund to a separate budget line within DOLETA.
In FY2010, funding for the Career Pathways Innovation Fund is $125 million. The
Administration’s FY2011 budget proposal does not include a request for this program.
YouthBuild
This competitive grant program funds projects that provide education and construction skills
training for disadvantaged youth. Since its inception in 1992, the program was administered by
the Department of Housing and Urban Development, but was moved to DOL by the YouthBuild
Transfer Act (P.L. 109-281), effective FY2007. Participating youth gain work experience, job
training, education (a GED or preparation for secondary education), and leadership development
by working to rehabilitate and construct housing for homeless and low-income families. Funding
in FY2010 for YouthBuild is $102.5 million and the program received an additional $50 million
in funding through the ARRA in PY2009.
Workforce Investment Act Funding
Appropriations for WIA totaled $5.5 billion in FY2010. From that amount, nearly $3.0 billion
was allotted to states through programmatic formula grants. These dollars flow through the state
workforce investment board and then, by formula, to local boards to serve as the central funding
for One-Stop centers. Although unemployed persons are the target population for WIA Title I
programs, particularly for training, currently employed individuals also benefit from many WIA
services. Table 1 provides program-by-program funding information for FY2010.
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Table 1. Workforce Investment Act Title I FY2010 Appropriations
FY2010 Appropriation
Program
($ millions)
WIA Grand Total
5,545.0
Adult Activities
861.5
Dislocated Worker Activities
1,413.0
Youth Activities
924.0
Job Corps
1,708.2
Native Americans
52.8
Migrant and Seasonal Farmworkers
84.6
Veterans’ Workforce Investment
9.6
Ex-Offender Activities
108.5
YouthBuild 102.5
Career Pathways Innovation Fund
125.0
Workforce Data Quality Initiative
12.5
Green Jobs Innovation Fund
40.0
Pilots, Demonstrations, and Research
93.5
Evaluation 9.6
Source: Table compiled by CRS from the Consolidated Appropriations Act, 2010 (P.L. 111-117).
Note: Total for Job Corps includes construction, operations, and administration.
Targeted Federal Job Training Activities: Trade Adjustment
Assistance and Community Service Employment for Older
Americans
As discussed above, the WIA statute mandates connections between the nation’s One-Stop system
and a number of other employment, education, and social service programs. Two of these One-
Stop partners also specifically fund employment and training activities for their particular
populations: workers affected by trade-related layoffs and low-income older Americans.
Trade Adjustment Assistance Training
TAA funds qualified training for certified workers. TAA training is authorized by the Trade Act of
1974 (P.L. 93-618), as amended, as is the TRA program described above. To receive TAA
benefits, separated workers must have lost their jobs due to import competition or shifts to
overseas production.
TAA training is funded out of the reemployment services funding that is annually allocated to
each state. Under the 2011 reauthorization (P.L. 112-40), $575 million is distributed using a
formula that considers the number of recent TAA-certified individuals in a state and the local cost
of providing training. In addition to training activities, states must fund administrative activities
and case management out of their reemployment services allocation.
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At the individual level, TAA training can consist of a variety of government or private training
programs.24 There is no statutory maximum training benefit, though the law specifies that training
must be “available at a reasonable cost.”25 The maximum duration of training is determined by
DOL and typically coincides with the statutory maximum duration of TRA. Under the 2011
reauthorization, the maximum duration of TRA is 117 weeks for all workers and 130 weeks under
certain conditions.
Older workers who opt for the RTAA program and work full-time may not receive training
assistance. RTAA participants that work more than 20 hours per week but less than full-time are
required to be enrolled in a training program to receive the RTAA wage supplements.
Community Service Employment for Older Americans
Title V of the Older Americans Act of 1965 (OAA; P.L. 89-73, as amended) authorizes the
Community Service Employment for Older Americans (CSEOA) program, also known as the
Senior Community Service Employment Program (SCSEP).26 Administered by DOL, its purpose
is to promote part-time employment opportunities in community service for unemployed low-
income persons aged 55 or older and who have poor employment prospects.27 The program is the
primary job creation program for adults since the elimination of public service employment
previously authorized under WIA’s predecessor legislation. While CSEOA aims to move
participants into subsidized employment, it also recognizes that older people who have special
needs may need to remain in subsidized employment. The program also supplements the income
for some workers who cannot find jobs in the private economy.
For FY2010, CSEOA funding of $825.4 million represented 35% of OAA funds. These funds are
awarded to both states and national sponsor organizations.
Employer Education Assistance
Education assistance from employers generally must be included in employee’s gross income for
federal income tax purposes. However, Section 127 of the Internal Revenue Code allows up to
$5,250 in tuition reimbursements and other forms of education assistance (e.g., payments for
books, supplies, and equipment) to be exempt from income and employment taxes even if the
education does not qualify as a deductible business expense (e.g., even if the education is not job-
related).28
24 Eligible programs include but are not limited to employer-based training, any training program provided by a state
under Title I of the Workforce Investment Act of 1998, any program of remedial education, any program of
prerequisite education or coursework required to enroll in an approved training program, any training program or
coursework at an accredited institution of higher education, or any other training program approved by the Secretary of
Labor. See 19 U.S.C. § 2296(a)(5) for legislative language.
25 See 19 CFR 2296(a)(1)(f). This terminology is defined more specifically in 20 CFR 617.22(a)(6)(ii).
26 For more information on CSEOA, see CRS Report RL33880, Funding for the Older Americans Act and Other
Administration on Aging Programs, by Angela Napili and Kirsten J. Colello, and U.S. Department of Labor, Senior
Community Service Employment Program, http://www.doleta.gov/seniors/.
27 Participants’ incomes must be no greater than 125% of the federal poverty guidelines. Enrollees work part-time in a
variety of community service jobs, such as in day care centers, libraries, schools, and hospitals, as well as “green”
assignments such as recycling and tree planting.
28 For more information on the tax treatment of employer education assistance, see CRS Report RS22911, Tax
(continued...)
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The temporary tax provision is currently authorized through December 30, 2012, by P.L. 111-312.
The Joint Committee on Taxation estimated that the tax expenditure attributable to the Section
127 exclusion would be approximately $4.5 billion in FY2010-FY2014.
Author Contact Information
Katelin P. Isaacs, Coordinator
Janemarie Mulvey
Analyst in Income Security
Specialist in Health Care Financing
kisaacs@crs.loc.gov, 7-7355
jmulvey@crs.loc.gov, 7-6928
David H. Bradley
Benjamin Collins
Analyst in Labor Economics
Analyst in Labor Policy
dbradley@crs.loc.gov, 7-7352
bcollins@crs.loc.gov, 7-7382
(...continued)
Treatment of Employer Educational Assistance for the Benefit of Employees, by Linda Levine.
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