Health Coverage Tax Credit. Most Workers Are Enrolling in Services Sooner, but Some May Be Negatively Affected by the Enrollment Deadline

States report that most trade affected workers are enrolling in services  sooner than in prior years because of some of the key provisions of the  TAA Reform Act, but the new training enrollment deadline has had  unintended consequences for some workers. The new 40-day time limit for  Labor to process petitions has enabled workers to receive services more  quickly after being laid off. But it reduced the average processing time from  107 days in fiscal year 2002, before the new time limit took effect, to   38 days in fiscal year 2003 (see fig. The deadline requires workers to be enrolled in  training or have a training waiver by the later of two dates: either 16 weeks  after being laid off or 8 weeks after the petition is certified. Labor’s  national data indicate that overall states issued over 40 percent more  training waivers in fiscal year 2003 than in 2002 (see fig. According to officials in four of the five states we visited, issuing waivers  to enable workers to qualify for the HCTC causes a significant  administrative workload. Wage Insurance Provision

Officials in all of the states we visited told us either that workers have  expressed an interest in or they expect workers to be interested in the new  Alternative TAA program—a 5-year demonstration project providing a  wage insurance subsidy to older workers who find reemployment quickly  but at a lower wage. At this stage of implementation, it is unclear how many workers will take  advantage of the wage insurance benefit. States have struggled to meet the higher demand with the TAA  resources available to them, and some states have temporarily  discontinued enrolling TAA-eligible workers in training, partly because of  funding shortfalls. Most states anticipate that in  fiscal year 2004 they will have difficulties meeting the demand for TAA  training with TAA training funds alone—even though the amount of funds  available nationally for TAA training was doubled from $110 million to  $220 million between fiscal years 2002 and 2003. Labor has taken steps to improve the  accuracy of this information by requiring states to use UI wage records to  track outcomes. Furthermore, some find the eligibility  criteria for the wage insurance program problematic, for example because  the criteria require workers to lack easily transferable skills yet find re- employment without TAA-funded training. Appendix I: Objectives, Scope, and Methodology

We were asked to provide information on (1) how key provisions of the  Trade Adjustment Assistance (TAA) Reform Act have affected program  services, (2) what have been the challenges in implementing the TAA  Reform Act’s new provisions, (3) whether demand for TAA training has  changed, and how states are meeting this demand, and (4) what is known  about what the TAA program is achieving.
Why GAO Did This Study

The Trade Adjustment Assistance (TAA) Reform Act of 2002 consolidated two programs serving trade-affected workers and made changes to expand benefits and decrease the time it takes for workers to get services. GAO was asked to provide information on (1) how key reform provisions have affected program services, (2) what have been the challenges in implementing new provisions, (3) whether demand for TAA training has changed and how states are meeting this demand, and (4) what is known about what the TAA program is achieving.

What GAO Found

Most workers are enrolling in services more quickly than in prior years, partly because of a new 40-day time limit Labor must meet when processing a request, or petition, for TAA coverage. Labor reduced its average petition-processing time from 107 days in fiscal year 2002 to 38 days in fiscal year 2003 after the Reform Act took effect. Also, most states reported that workers are enrolling in training sooner because of a new deadline requiring workers to be enrolled in training by the later of 8 weeks after petition certification or 16 weeks after a worker's layoff. However, this deadline may have negatively affected some workers--especially during large layoffs--as it does not always leave enough time to assess workers' training needs. States reported challenges implementing some new provisions of the TAA Reform Act. Officials in most of the states we visited reported an increased administrative workload from issuing training waivers to allow workers to qualify for the Health Coverage Tax Credit (HCTC)--over 40 percent more waivers were issued in fiscal year 2003 than in 2002. While officials in all the states we visited said workers are or are likely to be interested in the wage insurance provision (Alternative TAA, or ATAA) that supplements the wages of certain workers aged 50 and over, it is still unclear how many workers will take advantage of this benefit. However, some found the provision's eligibility criteria problematic, partly because they require workers to lack easily transferable skills yet find reemployment within 26 weeks of layoff. Demand for TAA training increased substantially in fiscal year 2002, prior to the implementation of the reforms. States have struggled to meet this higher demand with available TAA training funds, even though TAA training funds available nationally doubled between fiscal years 2002 and 2003. Most states have responded by using other federal employment and training resources. Information on TAA program results has been limited, but Labor is making improvements by requiring states to use wage records to track TAA outcomes. Labor also initiated a new, 5-year evaluation study.