Dislocated workers who have lost their jobs as a result of international trade are largely provided services through three federally funded employment and training programs—the TAA program, the WIA Dislocated Worker program, and the Wagner-Peyser ES program. These services are provided through a consolidated service delivery structure called the one-stop system. In order to encourage the streamlined delivery of employment services, WIA was enacted in 1998 and required that the TAA, WIA, ES, and other federally funded programs provide employment and training services through the one-stop center system made up of nearly 2,000 individual one-stop centers operating in about 600 local workforce areas across the nation. These program services may be provided directly at a one-stop center, or at other locations through referrals. The TAA program was designed to assist workers who have lost their jobs as a result of international trade. In order for workers to be eligible for TAA benefits, Labor must certify that their layoff was trade affected. This certification process begins when a petition on behalf of a group of laid-off workers is filed with Labor. Petitions may be filed by a group of at least three affected workers, the employer experiencing the layoff, a union, or a state or local workforce agency. Labor has 40 days to investigate whether workers were laid off as a result of international trade, for example because of a shift in production to another country or an increase in imports of articles like or similar to what the workers were involved in producing. If Labor certifies the petition, it notifies the state in which the layoff occurred, which then has responsibility for contacting the workers eligible for TAA program benefits under the petition. States must inform workers individually about the benefits available to them as well as how to apply for benefits. The TAA program provides two primary benefits—training and extended income support. States have responsibility for approving training and determining eligibility for extended income support, while local one-stop centers are the main point of intake and actual delivery of TAA services and benefits. Training benefits include vocational training, on-the-job training, and remedial training (e.g., English as a second language or literacy). Participants in TAA-approved training must attend training full- time. Program participants may also receive a total of 104 weeks of extended income support beyond the 26 weeks of UI benefits available in most states. This includes 78 weeks of extended income support while workers are completing vocational training, and another 26 weeks if workers are completing remedial training. During their first 26 weeks of extended income support, participants must either be enrolled in training, have completed training, or have a waiver from this requirement. To qualify for extended income support, participants must be enrolled in training by the later of two dates: either 16 weeks after being laid off or 8 weeks after Labor certified their petition. The maximum level of extended income support payments in a state is set by statute at the state’s maximum UI benefit level. The Trade Adjustment Assistance (TAA) Reform Act of 2002 added several new benefits to the TAA program, including the Health Coverage Tax Credit (HCTC). Workers must be enrolled in training or have a waiver from this requirement to be eligible for the HCTC benefit that helps workers pay for health care insurance through a tax credit covering 65 percent of their premiums for qualified plans. Workers can choose to receive the tax credit in one of two ways—as an advanced option that covers 65 percent of their monthly premiums allowing them to lower the amount they have to pay out of pocket for health coverage, or as an end of year tax credit that is claimed on their income taxes. The tax credit is administered at the federal level by the Internal Revenue Service (IRS) and three federal departments—Treasury, Labor and Health and Human Services—share responsibility for implementing HCTC. There are three health plan options that are automatically HCTC-eligible: COBRA continuation plans. Under the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985, certain employers with 20 or more employees are required to offer 18 to 36 months of continued health care coverage to former employees and their dependents who lose health coverage due to certain circumstances, such as when a worker is laid off. Generally, health care insurers may charge individuals purchasing COBRA continuation coverage no more than 102 percent of the total premium. Spousal coverage. Health care insurance obtained through a worker’s spouse’s employer is also HCTC-eligible, provided that the employer contributed less than 50 percent toward the cost of coverage. Individual market plans. Workers may use HCTC to cover a portion of the monthly cost of individually purchased health insurance coverage if the worker purchased the coverage at least 30 days prior to being laid off. In addition to the three options that are automatically qualified for HCTC, the TAA Reform Act allows states to designate other coverage alternatives—called state-qualified options—for HCTC recipients. For example, states may make arrangements with individual health insurers, among others, to provide HCTC-eligible coverage to TAA participants. The Reform Act also established as a demonstration project a wage insurance benefit for older workers—known as the Alternative Trade Adjustment Assistance (ATAA) program. This program supplements the incomes of workers 50 years of age or older who forgo TAA-funded training and are able to find jobs within 26 weeks of being laid off that pay less than $50,000 a year and pay less than what they previously earned. If workers meet these criteria they are eligible to receive 50 percent of the difference between their new and old wages up to a maximum of $10,000 over 2 years. Older trade-affected workers are only eligible for the wage insurance program if the petition for TAA assistance that was filed with Labor included a specific request for ATAA eligibility. About $750 million was appropriated for income support for trade-affected workers for fiscal year 2005, while another $259 million was appropriated for training. Labor allocates 75 percent of these training funds to states according to a formula that takes into account each state’s previous year allocations, accrued expenditures and participant levels. Labor holds the remaining 25 percent of training funds in reserve, to distribute to states throughout the year according to need. To cover administrative costs associated with the TAA program, Labor allocates to each state an additional 15 percent of its program allocation (see table 1). For example, Pennsylvania was allocated $20.6 million in fiscal year 2004 to provide trade-affected workers with training and other services, and an additional $3.1 million was allocated to cover costs associated with administering the TAA program. Labor sets and tracks national TAA performance goals for job placement, job retention and wage replacement outcomes, but there are no individual state performance goals. The WIA Dislocated Worker program is available to dislocated workers in general and is not reserved for those affected by international trade. A dislocated worker is an individual who (1) has been terminated or laid off, or who has received a notice of termination or layoff, from employment; is eligible for, or has exhausted entitlement to, UI or is not eligible but has been employed for a sufficient duration to demonstrate attachment to the workforce; and is unlikely to return to his previous industry or occupation; (2) has been terminated or laid off, or has received a notice of termination or layoff, from employment as a result of any permanent plant closure of, or substantial layoff at a plant, facility, or enterprise; (3) was self employed but is unemployed as a result of general economic conditions in the community in which the individual resides or because of natural disasters; or (4) is a displaced homemaker. Labor distributes 80 percent of the WIA Dislocated Worker funds ($1.5 billion in fiscal year 2005) directly to states, the District of Columbia, and Puerto Rico based on a formula. States then distribute 60 percent of these funds to local areas by formula to support WIA services for dislocated workers. Each state can reserve no more than 25 percent of its dislocated worker funds to provide rapid response services to help dislocated workers transition quickly to reemployment, and up to 15 percent for other statewide activities. Labor retains 20 percent of dislocated worker funds ($283 million in fiscal year 2005) in a national reserve account to be used to provide states with national emergency grants, demonstrations, and technical assistance. Under the WIA Dislocated Worker program there are three sequential levels of service available through the one-stop center system—core, intensive, and training. The initial core services—including job search and placement assistance, the provision of labor market information, and preliminary assessment of skills and needs—are available to everyone. If a dislocated worker is determined to be unable to find a job or has a job that does not lead to self-sufficiency after core services, intensive services may be made available, which include comprehensive assessments, development of an individual employment plan, and case management. Dislocated workers who are determined to be unable to obtain or retain employment after intensive services can move on to training. At this level, dislocated workers can receive services including occupational skills training and on-the-job training. The 1988 Worker Adjustment and Retraining Notification (WARN) Act generally requires employers with 100 or more workers to give notice— often called a WARN notice—to the affected workers’ representatives (e.g., a labor union) or the workers themselves if they have no representatives, as well as to the state dislocated worker unit 60 days in advance of expected plant closings or mass layoffs. Once an employer files a WARN notice with the state’s dislocated worker unit, a rapid response team is mobilized to provide immediate and on-site contact with the employer experiencing layoffs as well as with employee representatives to assess the needs of affected workers.