Congress Proposes Extending Health Coverage Tax Credit for 20,000 Delphi Retirees

(MICHIGAN) — Representatives Kristen McDonald Rivet, Mike Turner, Haley Stevens, and Claudia Tenney introduced the bipartisan Health Coverage Tax Credit Reauthorization Act to extend refundable healthcare tax credits for Delphi salaried retirees whose pensions were assumed by the Pension Benefit Guaranty Corporation.

The bill aims to restore the Health Coverage Tax Credit for retirees affected by Delphi’s bankruptcy during the Great Recession, reviving a benefit that expired at the end of 2021 and helping cover healthcare costs for former salaried workers and their families.

McDonald Rivet framed the measure as a response to losses retirees have carried for years. “Thousands of Michigan Delphi retirees were robbed of the retirements they earned,” she said.

Lawmakers described the proposal as extending the credit through January 2029, while a separate description of the measure referred to an extension through 2027. The legislation centers on healthcare costs for affected retirees.

The Health Coverage Tax Credit, or HCTC, was originally established under the 2002 Trade Act. It subsidizes 72.5%-80% of health insurance premiums for eligible individuals under age 65, including qualified family members.

That support has particular weight for Delphi retirees because the credit can offset much of the cost of private coverage before Medicare eligibility. For hundreds of Delphi salaried retirees in places such as Dayton, Ohio, the credit covers more than 70% of premiums.

The measure also returns attention to a long-running group of former workers whose retirement and healthcare arrangements changed after Delphi’s collapse in the Great Recession. Their pensions later moved to the Pension Benefit Guaranty Corporation, the federal agency that insures private-sector pension plans.

Turner said the legislation would provide support to affected retirees. Stevens and Tenney joined him and McDonald Rivet in introducing the bill on a bipartisan basis.

For the Delphi retirees at the center of the measure, the issue is not a new one. The tax credit expired at the end of 2021, leaving former workers once again confronting the cost of coverage before age 65.

The proposal would restore a tax break that applies to healthcare premiums for a defined group of people rather than create a new program from scratch. In that sense, the bill would reopen a channel of help that lawmakers say Delphi retirees have relied on.

Eligibility rules under the current HCTC framework shape how far that help reaches inside a family. Qualified family members, defined here as spouses and dependents claimed on tax returns, remain eligible for 24 months after the retiree turns 65.

That cutoff matters because many households do not age into Medicare at the same time. A retiree may turn 65 while a spouse or dependent still needs pre-65 coverage, leaving a narrower period of tax-credit support.

The DSRA Benefit Trust plays a separate role for some retirees when the Health Coverage Tax Credit is unavailable. It supplements coverage for Delphi salaried retirees, and spouses or dependents, who retired on or before April 1, 2009.

That trust provides subsidies for pre-65 coverage when the HCTC lapses. It also sets timing rules for enrollment, requiring new forms 30 days prior to eligibility and barring retroactive payments.

Dual retiree households may receive separate subsidies. That provision can matter in families where both people retired from Delphi and each faces pre-65 insurance costs.

Taken together, the proposed extension and the trust rules describe a patchwork of healthcare support that depends on age, retirement date, and family status. The federal tax credit can shoulder most of the premium cost for some retirees, while the trust can fill part of the gap when the credit is not in effect.

The Health Coverage Tax Credit’s original structure helps explain why lawmakers are pressing to revive it for this group. It was designed to subsidize a large share of premiums for people who needed health insurance before age 65, and the Delphi retirees named in the bill fit that problem closely.

For those former workers, the question is less about broad healthcare policy than about whether a known subsidy remains available. When the credit operates, it can reduce the amount retirees pay out of pocket; when it expires, other arrangements such as the DSRA Benefit Trust become more important.

McDonald Rivet’s statement placed Michigan retirees at the center of the argument for the bill. Her office tied the need for action to extending the credits through January 2029 so affected former workers can cover healthcare costs.

Turner’s backing gives the proposal an Ohio anchor as well. The mention of Dayton reflects the concentration of Delphi salaried retirees there and shows the bill’s reach beyond Michigan.

Stevens and Tenney add to the bipartisan lineup behind the measure. Their participation broadens the coalition around a proposal tied to a specific group of retirees rather than the wider public.

The bill’s focus on Delphi retirees also narrows its audience. It does not seek to rewrite the full framework of federal health coverage, but to restore a refundable tax credit for salaried retirees whose pensions were assumed by the Pension Benefit Guaranty Corporation.

That makes the legislation both technical and personal. It turns on tax-credit law, age thresholds and premium subsidies, but it also speaks to former workers who have spent years trying to preserve healthcare coverage after losing parts of the retirement package they expected.

The credit’s subsidy range — 72.5%-80% of health insurance premiums — defines the financial scale of the issue. Even within the narrower Delphi group, that level of help can decide whether a household can keep coverage in the years before Medicare begins.

The measure’s timing language matters for the same reason. A credit extended through January 2029 would offer a longer runway than an extension through 2027, giving retirees and families a clearer span of support as they plan premium payments and enrollment.

At the same time, the family-eligibility limit remains part of the current HCTC rules. Spouses and dependents claimed on tax returns do not remain eligible indefinitely after the retiree reaches Medicare age, but for 24 months.

That rule leaves many Delphi retirees watching not just their own birthdays, but the age and status of family members covered under the credit. Healthcare support in retirement often turns on those dates.

The DSRA Benefit Trust rules add another layer of deadlines. Retirees who qualify must submit new enrollment forms 30 days prior to eligibility, and the trust does not make retroactive payments.

That means timing can carry immediate financial consequences. Missing the enrollment window can leave a household without reimbursement for coverage already purchased.

For Delphi retirees who retired on or before April 1, 2009, the trust remains a backstop for pre-65 coverage when the HCTC is not in place. For others, the proposed federal extension carries much of the attention.

The bipartisan bill arrives with a simple message from its sponsors: restore the Health Coverage Tax Credit for a group of former workers whose retirement security was shaken when Delphi went bankrupt in the Great Recession. The lawmakers tied that effort to the Pension Benefit Guaranty Corporation, the agency that assumed the pensions involved, and to retirees still trying to manage healthcare costs years later.

In practical terms, the proposal would again direct federal support toward premiums for Delphi retirees under age 65 and qualified family members. For households in Michigan, Ohio and elsewhere, that could mean help paying most of the monthly cost of health insurance.

The measure also highlights how retirement losses can persist long after a bankruptcy fades from daily headlines. For many Delphi retirees, healthcare remains one of the most immediate costs left unresolved.

McDonald Rivet’s words captured that argument in blunt terms. “Thousands of Michigan Delphi retirees were robbed of the retirements they earned,” she said.