[Federal Register Volume 88, Number 80 (Wednesday, April 26, 2023)]
[Proposed Rules]
[Pages 25313-25335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-08635]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 435, 457, and 600

Office of the Secretary

45 CFR Parts 152 and 155

[CMS-9894-P]
RIN 0938-AV23


Clarifying Eligibility for a Qualified Health Plan Through an 
Exchange, Advance Payments of the Premium Tax Credit, Cost-Sharing 
Reductions, a Basic Health Program, and for Some Medicaid and 
Children's Health Insurance Programs

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would make several clarifications and 
update the definitions currently used to determine whether a consumer 
is eligible to enroll in a Qualified Health Plan (QHP) through an 
Exchange; a Basic Health Program (BHP), in States that elect to operate 
a BHP; and for some State Medicaid and Children's Health Insurance 
Programs (CHIPs).

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, by June 23, 2023.

ADDRESSES: In commenting, please refer to file code CMS-9894-P.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-9894-P, P.O. Box 8016, 
Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-9894-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: 
    Morgan Gruenewald, (301) 492-5141, or Anna Lorsbach, (301) 492-
4424, for matters related to Exchanges.
    Sarah Lichtman Spector, (410) 786-3031, or Annie Hollis, (410) 786-
7095, for matters related to Medicaid, CHIP, and BHP.

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following 
website as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that website to 
view public comments. CMS will not post on Regulations.gov public 
comments that make threats to individuals or institutions or suggest 
that the individual will take actions to harm the individual. CMS 
continues to encourage individuals not to submit duplicative comments. 
We will post acceptable comments from multiple unique commenters even 
if the content is identical or nearly identical to other comments.

I. Background

    The Patient Protection and Affordable Care Act (ACA) \1\ generally 
\2\ requires that in order to enroll in a Qualified Health Plan (QHP) 
through an Exchange, an individual must be either a citizen or national 
of the United States or be ``lawfully present'' in the United 
States.\3\ The ACA also generally requires that individuals be 
``lawfully present'' in order to be eligible for insurance 
affordability programs such as premium tax credits (PTC),\4\ advance 
payments of the premium tax credit (APTC),\5\ and cost-sharing 
reductions (CSRs); \6\ additionally, enrollees in a Basic Health 
Program (BHP) are required to meet the same citizenship and immigration 
requirements as QHP enrollees.\7\ Further, the ACA required that 
individuals be ``lawfully present'' in order to qualify for the Pre-
Existing Condition Insurance Plan Program (PCIP), which expired in 
2014.\8\ The ACA does not define ``lawfully present'' beyond specifying 
that an individual is only considered lawfully present if they are 
reasonably expected to be lawfully present for the period of their 
enrollment.\9\ The ACA also requires the Centers for Medicare & 
Medicaid Services (CMS) to verify that Exchange applicants are lawfully 
present in the United States.\10\
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    \1\ The Patient Protection and Affordable Care Act (Pub. L. 111-
148) was enacted on March 23, 2010. The Healthcare and Education 
Reconciliation Act of 2010 (Pub. L. 111-152), which amended and 
revised several provisions of the Patient Protection and Affordable 
Care Act, was enacted on March 30, 2010. In this rulemaking, the two 
statutes are referred to collectively as the ``Patient Protection 
and Affordable Care Act'', ``Affordable Care Act'', or ``ACA.''.
    \2\ States may pursue a waiver under section 1332 of the 
Affordable Care Act (ACA) that could waive the ``lawfully present'' 
framework in section 1312(f)(3) of the ACA. See 42 U.S.C. 
18052(a)(2)(B). There is currently one State (Washington) with an 
approved section 1332 waiver that includes a waiver of the 
``lawfully present'' framework to the extent necessary to permit all 
State residents, regardless of immigration status, to enroll in a 
QHP and Qualified Dental Plan (QDP) through the State's Exchange, as 
well as to apply for State subsidies to defray the costs of 
enrolling in such coverage. Consumers who are eligible for Exchange 
coverage under the waiver remain ineligible for PTC. For more 
information on this State's section 1332 waiver, see https://www.cms.gov/cciio/programs-and-initiatives/state-innovation-waivers/section_1332_state_innovation_waivers-.
    \3\ 42 U.S.C. 18032(f)(3).
    \4\ 26 U.S.C. 36B(e)(2).
    \5\ 42 U.S.C. 18082(d).
    \6\ 42 U.S.C. 18071(e).
    \7\ 42 U.S.C. 18051(e).
    \8\ 42 U.S.C. 18001(d)(1).
    \9\ 42 U.S.C. 18032(f)(3), 42 U.S.C. 18071(e)(2).
    \10\ 42 U.S.C. 18081(c)(2)(B).
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    As such, consistent with its statutory authority under the ACA and 
in order to facilitate the operation of its programs, CMS issued 
regulations in 2010 to define ``lawfully present'' for the purposes of 
determining eligibility for PCIP (75 FR 45013); in 2012 for purposes of 
determining eligibility to enroll in a QHP through an Exchange by 
cross-referencing the existing PCIP definition (77 FR 18309); and in 
2014 to cross-reference the existing definition for purposes of 
determining eligibility to enroll in a BHP (79 FR 14111). In this 
proposed rule, we propose to amend these three regulations in order to 
update the definition of ``lawfully present'' at 45 CFR 152.2, which is 
used to determine whether a consumer is eligible to enroll in a QHP 
through an Exchange and for a BHP. Exchange regulations apply this 
definition to the eligibility standards for APTC and CSRs by requiring 
an applicant to be eligible to enroll in a QHP to be eligible for

[[Page 25314]]

APTC and CSRs.\11\ Accordingly, in this proposed rule, when we refer to 
the regulatory definition of ``lawfully present'' used to determine 
whether a consumer is eligible to enroll in a QHP through an Exchange, 
we also are referring to the regulatory definition used to determine 
whether a consumer is eligible for APTC and CSRs.
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    \11\ 45 CFR 155.305(f)(1)(ii)(A) and (g)(1)(i)(A).
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    We propose a similar definition of ``lawfully present'' applicable 
to eligibility for Medicaid and Children's Health Insurance Program 
(CHIP) in States that elect to cover ``lawfully residing'' pregnant 
individuals and children under section 214 of the Children's Health 
Insurance Program Reauthorization Act of 2009 (CHIPRA) (hereinafter 
``CHIPRA 214 option''), now codified at section 1903(v)(4) of the 
Social Security Act (the Act) for Medicaid and section 2107(e)(1)(O) of 
the Act for CHIP. In July 2010, CMS interpreted ``lawfully residing'' 
to mean individuals who are ``lawfully present'' in the United States 
and who are residents of the State in which they are applying under the 
State's Medicaid or CHIP residency rules.\12\ The definitions of 
``lawfully present'' and ``lawfully residing'' used for Medicaid and 
CHIP are currently set forth in a 2010 State Health Official (SHO) 
letter (SHO #10-006) and further clarified in a 2012 SHO letter (SHO 
#12-002).\13\
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    \12\ Centers for Medicare & Medicaid Services. (2010). SHO #10-
006: Medicaid and CHIP Coverage of ``Lawfully Residing'' Children 
and Pregnant Women. https://downloads.cms.gov/cmsgov/archived-downloads/smdl/downloads/sho10006.pdf.
    \13\ Centers for Medicare & Medicaid Services. State Health 
Official letter (SHO) #12-002: Individuals with Deferred Action for 
Childhood Arrivals (issued August 28, 2012). Available at https://www.medicaid.gov/federal-policy-guidance/downloads/sho-12-002.pdf.
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    We propose several modifications to the definition of ``lawfully 
present'' currently articulated at 45 CFR 152.2 and described in the 
SHO letters for Medicaid and CHIP. First, we propose to remove an 
exception that excludes Deferred Action for Childhood Arrivals (DACA) 
recipients from the definitions of ``lawfully present'' used to 
determine eligibility to enroll in a QHP through an Exchange, a BHP, or 
Medicaid and CHIP under the CHIPRA 214 option. If this proposal is 
finalized, DACA recipients would be considered lawfully present for 
purposes of eligibility for these insurance affordability programs \14\ 
based on a grant of deferred action, just like other similarly situated 
noncitizens who are granted deferred action. We also propose to 
incorporate additional technical changes into the proposed ``lawfully 
present'' definition at 45 CFR 152.2, as well as to the proposed 
``lawfully present'' definition at 42 CFR 435.4.
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    \14\ See 45 CFR 155.300(a) and 42 CFR 435.4.
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    These proposed definitions are solely for the purposes of 
determining eligibility for specific Department of Health and Human 
Services (HHS) health programs and are not intended to define lawful 
presence for purposes of any other law or program. We also note that 
this proposed rule would not provide any noncitizen relief or 
protection from removal, or convey any immigration status or other 
authority for a noncitizen to remain in the United States under 
existing immigration laws or to become eligible for any immigration 
benefit available under the U.S. Department of Homeland Security 
(DHS)'s or Department of Justice's purview.

II. Provisions of the Proposed Regulations

A. Proposed Effective Date

    CMS's target effective date for this rule is November 1, 2023, to 
ensure the provisions are effective during the Open Enrollment Period 
for individual market Exchanges, the next of which will begin on 
November 1, 2023. We are considering this target date because Open 
Enrollment is an important opportunity for consumers to shop for and 
enroll in insurance coverage, and implementation of these changes would 
be most effective during a period when there are many outreach and 
enrollment activities occurring from CMS, State Exchanges, Navigator 
and assister groups, and other interested parties. We note that, if 
this rule is finalized as proposed, DACA recipients would qualify for 
the Special Enrollment Period at 45 CFR 155.420(d)(3) for individuals 
who become newly eligible for enrollment in a QHP through an Exchange 
due to newly meeting the requirement at 45 CFR 155.305(a)(1) that an 
enrollee be lawfully present. However, we still believe that proposing 
to align this rule's effective date with the individual market Exchange 
Open Enrollment Period would reduce barriers to enrollment for 
consumers due to the previously mentioned outreach and enrollment 
activities occurring during this time and the longer period of time 
individuals have to enroll in a QHP through an Exchange during the 
individual market Exchange Open Enrollment Period compared with a 
Special Enrollment Period. Further, even though the individual market 
Exchange Open Enrollment Period is, among the programs addressed in 
this proposed rule, currently only applicable to Exchanges, we believe 
that it is important to align effective dates across Exchanges, BHP, 
Medicaid and CHIP in order to promote consistency, and because 
eligibility for these programs is typically evaluated through a single 
application.\15\
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    \15\ Pursuant to 42 CFR 600.320(d), a State operating a BHP must 
either offer open enrollment periods pursuant Exchange regulations 
at 45 CFR 155.410 or follow Medicaid's continuous enrollment 
process. The two States that currently operate a BHP, New York and 
Minnesota, follow Medicaid's continuous enrollment process.
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    We seek comment on the feasibility of this target effective date 
and whether to consider a different target effective date when we 
finalize this proposed rule. CMS is committed to working with State 
agencies and providing technical assistance regarding implementation of 
these proposed changes, if finalized. At the same time, CMS understands 
that State Medicaid and CHIP agencies are experiencing a significant 
increase in workload following the end of the Medicaid continuous 
enrollment condition established under section 6008(b)(3) of the 
Families First Coronavirus Response Act, as amended by section 5131 of 
the Consolidated Appropriations Act, 2023, and we seek comment about 
the impact of this workload or any other operational barriers to 
implementation for State Exchanges, and State Medicaid, CHIP, and BHP 
agencies. While CMS believes that there are advantages to implementing 
these provisions, if finalized, on the proposed November 1, 2023 target 
effective date, CMS will consider the comments received on this issue 
as we evaluate the feasibility of a November 1, 2023 effective date or 
different effective dates, if this proposal is finalized.

B. Pre-Existing Condition Insurance Plan Program (45 CFR 152.2)

    We propose to remove the definition of ``lawfully present'' 
currently at 45 CFR 152.2 and insert the proposed definition of 
``lawfully present'' at 45 CFR 155.20. The regulations at 45 CFR 152.2 
apply to the PCIP program, which ended in 2014. Further, we are 
proposing to update BHP regulations at 42 CFR 600.5 that currently 
cross-reference 45 CFR 152.2 to instead cross-reference the definition 
proposed in this rule at 45 CFR 155.20. While we do not expect the 
definition at 45 CFR 152.2 to be used for any current CMS programs, we 
are proposing to modify the regulation at 45 CFR 152.2 to cross-
reference Exchange regulations at 45 CFR 155.20 to help ensure 
alignment of definitions for other programs. We seek comment on 
whether, alternatively, we

[[Page 25315]]

should strike the definition of ``lawfully present'' currently at 45 
CFR 152.2 instead of replacing it with a cross-reference to 45 CFR 
155.20.

C. Exchange Establishment Standards and Other Related Standards Under 
the ACA (45 CFR 155.20)

1. DACA Recipients
    The ACA generally requires that in order to enroll in a QHP through 
an Exchange, an individual must be a ``citizen or national of the 
United States or an alien lawfully present in the United States.'' \16\ 
While individuals who are not eligible to enroll in a QHP are also not 
eligible for APTC, PTC, or CSRs to lower the cost of a QHP, the ACA 
specifies that individuals who are not lawfully present are also not 
eligible for such insurance affordability programs.\17\ The ACA does 
not offer a definition of ``lawfully present.'' \18\
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    \16\ 42 U.S.C. 18032(f)(3).
    \17\ 26 U.S.C. 36B(e)(2), 42 U.S.C. 18082(d), 42 U.S.C. 
18071(e).
    \18\ 42 U.S.C. 18001(d)(1).
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    In a recent rulemaking, DHS referred to its definition of ``lawful 
presence'' in 8 CFR 1.3, reiterating that it is a ``specialized term of 
art'' that does not confer lawful status or authorization to remain in 
the United States, but instead describes noncitizens who are eligible 
for certain benefits as set forth in 8 U.S.C. 1611(b)(2) (Deferred 
Action for Childhood Arrivals, final rule, 87 FR 53152 (August 30, 
2022) (``DHS DACA Final Rule'')). DHS also stated that HHS and ``other 
agencies whose statutes independently link eligibility for benefits to 
lawful presence may have the authority to construe such language for 
purposes of those statutory provisions'' (87 FR 53152). We discuss this 
authority in further detail later in this section.
    CMS first established a regulatory definition of ``lawfully 
present'' for purposes of the PCIP program in 2010 (75 FR 45013). In 
that 2010 rulemaking, CMS adopted the definition of ``lawfully 
present'' already established for Medicaid and CHIP eligibility for 
children and pregnant individuals under the CHIPRA 214 option 
articulated in SHO #10-006 (hereinafter ``2010 SHO'') to have the 
maximum alignment possible across CMS programs establishing eligibility 
for lawfully present individuals. The definition of ``lawfully 
present'' articulated in the 2010 SHO was also informed by DHS 
regulations codified at 8 CFR 1.3(a) defining ``lawfully present'' for 
the purpose of eligibility for certain Social Security benefits, with 
some revisions necessary for updating or clarifying purposes, or as 
otherwise deemed appropriate for the Medicaid and CHIP programs 
consistent with the Act.
    In March 2012, CMS issued regulations regarding eligibility to 
enroll in a QHP through an Exchange that cross-referenced the 
definition of ``lawfully present'' set forth in the 2010 PCIP 
regulations (77 FR 18309). As the DACA policy had not yet been 
established, the definitions of ``lawfully present'' set forth in the 
2010 SHO, the 2010 PCIP regulations, and the 2012 QHP regulations did 
not explicitly reference DACA recipients. However, these definitions 
specify that individuals granted deferred action are considered 
lawfully present for purposes of eligibility to enroll in a QHP through 
an Exchange, a BHP, or Medicaid and CHIP under the CHIPRA 214 option. 
In June 2012, DHS issued the memorandum ``Exercising Prosecutorial 
Discretion with Respect to Individuals Who Came to the United States as 
Children,'' establishing the DACA policy.\19\ DHS explained in this 
memorandum that DACA is a form of deferred action, and the removal 
forbearance afforded to a DACA recipient is identical for immigration 
purposes to the forbearance afforded to any individual who is granted 
deferred action in other exercises of enforcement discretion. DHS 
provided that the DACA policy was ``necessary to ensure that [its] 
enforcement resources are not expended on these low priority cases.'' 
\20\ DHS did not address DACA recipients' ability to access insurance 
affordability programs through an Exchange, a BHP, and Medicaid or CHIP 
under the CHIPRA 214 option.
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    \19\ United States Department of Homeland Security. (2012) 
Exercising Prosecutorial Discretion with Respect to Individuals Who 
Came to the United States as Children. https://www.dhs.gov/xlibrary/assets/s1-exercising-prosecutorial-discretion-individuals-who-came-to-us-as-children.pdf.
    \20\ United States Department of Homeland Security. (2012) 
Exercising Prosecutorial Discretion with Respect to Individuals Who 
Came to the United States as Children. https://www.dhs.gov/xlibrary/assets/s1-exercising-prosecutorial-discretion-individuals-who-came-to-us-as-children.pdf.
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    In August 2012, CMS amended its regulatory definition of ``lawfully 
present'' at 45 CFR 152.2, used for both PCIP and Exchange purposes, to 
add an exception stating that an individual granted deferred action 
under DHS' DACA policy was not considered lawfully present (77 FR 
52614), thereby treating DACA recipients differently from other 
deferred action recipients for purposes of these benefits programs. CMS 
also issued the 2012 SHO excluding DACA recipients from the definition 
of ``lawfully residing'' for purposes of Medicaid or CHIP eligibility 
under the CHIPRA 214 option. In 2014, CMS issued regulations 
establishing the framework governing a BHP, which also adopted the 
definition of ``lawfully present'' at 45 CFR 152.2, thereby aligning 
the definition of ``lawfully present'' for a BHP with Exchanges, 
Medicaid and CHIP. As a result, DACA recipients, unlike all other 
deferred action recipients, are not currently eligible to enroll in a 
QHP through an Exchange, or for APTC or CSRs in connection with 
enrollment in a QHP through an Exchange, nor are they eligible to 
enroll in a BHP or for Medicaid or CHIP under the CHIPRA 214 option 
because they are not considered lawfully present for purposes of these 
programs. In both the August 2012 rulemaking and the 2012 SHO that 
excluded DACA recipients from CMS definitions of ``lawfully present,'' 
CMS reasoned that, because the rationale that DHS offered for adopting 
the DACA policy did not pertain to eligibility for insurance 
affordability programs, these benefits should not be extended as a 
result of DHS deferring action under DACA.
    HHS has now reconsidered its position, and is proposing to change 
its interpretation of the statutory phrase ``lawfully present'' to 
treat DACA recipients the same as other deferred action recipients as 
described in current regulations in paragraph (4)(iv) of the definition 
at 45 CFR 152.2. Under the proposed rule, DACA recipients would be 
considered lawfully present to the same extent as other deferred action 
recipients for purposes of the ACA at 42 U.S.C. 18032(f)(3) for the 
Exchange, and 42 U.S.C. 18051(e) for a BHP. To align the eligibility 
standards across insurance affordability programs for noncitizens 
considered ``lawfully present,'' we are also proposing to establish 
rules in the Medicaid and CHIP programs to recognize that DACA 
recipients are ``lawfully residing'' in the United States, just like 
other deferred action recipients, for purposes of the CHIPRA 214 
option, as discussed in section II.D.1. of this proposed rule.
    Since HHS first interpreted ``lawfully present'' to exclude DACA 
recipients in 2012, new information regarding DACA recipients' access 
to health insurance coverage has emerged. While a 2021 survey of DACA 
recipients found that DACA may facilitate access to health insurance 
through employer-based plans, 34 percent of DACA recipient respondents 
reported that they were not

[[Page 25316]]

covered by health insurance.\21\ Individuals without health insurance 
are less likely to receive preventative or routine health screenings, 
and may delay necessary medical care, incurring high costs and 
debts.\22\ The 2021 survey of DACA recipients also found that 47 
percent of respondents attested to having experienced a delay in 
medical care due to their immigration status and 67 percent of 
respondents said that they or a family member were unable to pay 
medical bills or expenses.\23\ The COVID-19 public health emergency has 
also highlighted the need for this population to have access to high 
quality, affordable health coverage. According to a demographic 
estimate by the Center for Migration Studies, over 200,000 DACA 
recipients served as essential workers during the COVID-19 public 
health emergency.\24\ This figure encompasses 43,500 DACA recipients 
who worked in health care and social assistance occupations, including 
10,300 in hospitals and 2,000 in nursing care facilities.\25\ During 
the height of the pandemic, essential workers were disproportionately 
likely to contract COVID-19.26 27 These factors emphasize 
how increasing access to health insurance would improve the health and 
well-being of many DACA recipients currently without coverage. In 
addition to improving health outcomes, these individuals could be even 
more productive and better economic contributors to their communities 
and society at large with improved access to health care. A 2016 study 
found that a worker with health insurance is estimated to miss 77 
percent fewer workdays than an uninsured worker.\28\
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    \21\ National Immigration Law Center. Tracking DACA Recipients' 
Access to Health Care. https://www.nilc.org/wp-content/uploads/2022/06/NILC_DACA-Report_060122.pdf.
    \22\ Kaiser Family Foundation. Key Facts About the Uninsured 
Population. https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/.
    \23\ National Immigration Law Center. Tracking DACA Recipients' 
Access to Health Care. https://www.nilc.org/wp-content/uploads/2022/06/NILC_DACA-Report_060122.pdf.
    \24\ Center for Migration Studies. DACA Recipients are Essential 
Workers and Part of the Front-line Response to the COVID-19 
Pandemic, as Supreme Court Decision Looms, https://cmsny.org/daca-essential-workers-covid/.
    \25\ Center for Migration Studies. DACA Recipients are Essential 
Workers and Part of the Front-line Response to the COVID-19 
Pandemic, as Supreme Court Decision Looms, https://cmsny.org/daca-essential-workers-covid/.
    \26\ Nguyen, L.H., Drew, D.A., Graham, M.S., Joshi, A.D., Guo, 
C.-G., Ma, W., Mehta, R.S., Warner, E.T., Sikavi, D.R., Lo, C.-H., 
Kwon, S., Song, M., Mucci, L.A., Stampfer, M.J., Willett, W.C., 
Eliassen, A.H., Hart, J.E., Chavarro, J.E., Rich-Edwards, J.W., . . 
. Zhang, F. (2020). Risk of COVID-19 among front-line health-care 
workers and the general community: A prospective cohort study. The 
Lancet Public Health, 5(9). https://doi.org/10.1016/S2468-2667(20)30164-X.
    \27\ Barrett, E.S., Horton, D.B., Roy, J., Gennaro, M.L., 
Brooks, A., Tischfield, J., Greenberg, P., Andrews, T., Jagpal, S., 
Reilly, N., Carson, J.L., Blaser, M.J., & Panettieri, R.A. (2020). 
Prevalence of SARS-COV-2 infection in previously undiagnosed health 
care workers in New Jersey, at the onset of the U.S. covid-19 
pandemic. BMC Infectious Diseases, 20(1). https://doi.org/10.1186/s12879-020-05587-2.
    \28\ Dizioli, Allan and Pinheiro, Roberto. (2016). Health 
Insurance as a Productive Factor. Labour Economics. https://doi.org/10.1016/j.labeco.2016.03.002.
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    By including DACA recipients in the definition of ``lawfully 
present,'' this proposed rule is aligned with the goals of the ACA--
specifically, to lower the number of people who are uninsured in the 
United States and make affordable health insurance available to more 
people. Further, DACA recipients represent a pool of relatively young, 
healthy adults; at an average age of 29 per U.S. Citizenship and 
Immigration Services (USCIS) data, they are younger than the general 
Exchange population.\29\ As such, there may be a slight effect on the 
Exchange or BHP risk pools as a result of this proposed change, 
discussed further in the Regulatory Impact Analysis in section VI.C. of 
this proposed rule.
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    \29\ Key Facts on Individuals Eligible for the Deferred Action 
for Childhood Arrivals (DACA) Program. Kaiser Family Foundation. 
February 1, 2018. https://www.kff.org/racial-equity-and-health-policy/fact-sheet/key-facts-on-individuals-eligible-for-the-deferred-action-for-childhood-arrivals-daca-program/.
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    In previously excluding DACA recipients from the definition of 
``lawfully present,'' CMS had posited that the broadly accepted 
conventions of lawful presence should be set aside if the program or 
status in question was not established with the explicit objective of 
expanding access to health insurance affordability programs. However, 
given the broad aims of the ACA to increase access to health coverage, 
we now assess that this rationale for excluding certain noncitizen 
groups from such coverage was not only not statutorily mandated, it 
failed to best effectuate congressional intent in the ACA. 
Additionally, HHS previously reasoned that considering DACA recipients 
eligible for insurance affordability programs was inconsistent with the 
limited relief that the DACA policy was intended to afford. However, on 
further review and consideration, it is clear that the DACA policy was 
intended to provide recipients with the stability and assurance that 
would allow them to obtain education and lawful employment, and 
integrate as productive members of society. Extending health benefits 
to these individuals is consistent with those fundamental goals of 
DACA. It is also evident that there was no statutory mandate to 
distinguish between recipients of deferred action under the DACA policy 
and other deferred action recipients.
    The proposed change to no longer exclude DACA recipients from CMS 
definitions of ``lawfully present'' aligns with both the longstanding 
DHS definition of lawful presence under 8 CFR 1.3 and DHS's explanation 
of this definition in the DHS DACA Final Rule. In a January 20, 2021 
memorandum, ``Preserving and Fortifying Deferred Action for Childhood 
Arrivals,'' the President directed the Secretary of Homeland Security 
and the Attorney General to take appropriate steps consistent with 
applicable law to act to preserve and fortify DACA.\30\
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    \30\ The White House. (2021). Preserving and Fortifying Deferred 
Action for Childhood Arrivals (DACA). https://www.govinfo.gov/content/pkg/FR-2021-01-25/pdf/2021-01769.pdf.
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    Following the issuance of this memorandum, DHS issued a proposed 
rule, ``Deferred Action for Childhood Arrivals,'' on September 28, 2021 
(86 FR 53736), and the DHS DACA Final Rule on August 30, 2022, with an 
effective date of October 31, 2022.\31\ Among other things, the DHS 
DACA Final Rule reiterated USCIS' longstanding policy that a noncitizen 
who has been granted deferred action is deemed ``lawfully present''--a 
specialized term of art that Congress has used in multiple statutes--
for example, for purposes of 8 U.S.C. 1611(b)(2). The DHS DACA Final 
Rule also reiterated that DACA recipients do not accrue ``unlawful 
presence'' for purposes of 8 U.S.C. 1182(a)(9).
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    \31\ Current court orders prohibit DHS from administering the 
DACA policy. But a partial stay permits DHS to continue processing 
DACA renewals and related applications for employment authorization 
documents. See USCIS, DACA Litigation Information and Frequently 
Asked Questions (Nov. 3, 2022).
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    We are aware that DHS received public comments about ``HHS' 
exclusion of DACA recipients from participation in Medicaid, the 
Children's Health Insurance Program (CHIP), and the ACA health 
insurance marketplace.'' (87 FR 53152). In response, DHS noted that it 
did not have the authority to make changes to the definitions of 
``lawfully present'' used to determine eligibility for insurance 
affordability programs and affirmed that such authority rests with HHS 
(87 FR 53152). While review of the DHS DACA Final Rule in part prompted 
HHS to revisit its own interpretation of ``lawfully present,'' the 
changes proposed in this rule reflect a desire to align with 
longstanding DHS policy

[[Page 25317]]

predating the DHS DACA Final Rule, under which deferred action 
recipients have been considered ``lawfully present'' for purposes of 
certain Social Security benefits under 8 CFR 1.3.
    In light of DHS's clarifications, HHS sees no persuasive reasons to 
treat DACA recipients differently from other noncitizens who have been 
granted deferred action. Accordingly, HHS proposes to amend our 
regulations at 42 CFR 600.5 and 45 CFR 152.2 and 155.20, and establish 
regulations at 42 CFR 435.4 and 457.320, so that DACA recipients would 
be considered lawfully present for purposes of eligibility for health 
insurance coverage through an Exchange, a BHP, and for eligibility 
under the CHIPRA 214 option in Medicaid and CHIP, just like other 
individuals granted deferred action. Specifically, we are proposing to 
amend QHP regulations at 45 CFR 155.20 to remove the current cross-
reference to 45 CFR 152.2 and to instead add a definition of ``lawfully 
present'' for purposes of determining eligibility to enroll in a QHP 
through an Exchange. In section II.B. of this rule, we propose to 
remove the definition of ``lawfully present'' currently in the PCIP 
regulations at 45 CFR 152.2 and add a cross reference to 45 CFR 155.20 
to ensure alignment across programs. In the definition proposed at 45 
CFR 155.20, we propose to remove the existing exception in 45 CFR 152.2 
that excludes DACA recipients from the definition of ``lawfully 
present,'' and clarify that references to noncitizens who are granted 
deferred action who are lawfully present for purposes of this provision 
include DACA recipients. Under this proposed change, we estimate that 
approximately 129,000 DACA recipients would enroll in a QHP through an 
Exchange, a BHP, or Medicaid or CHIP under the CHIPRA 214 option. 
Proposed changes to Medicaid and CHIP under the CHIPRA 214 option and 
BHP are included under sections II.D. and II.E. of this proposed rule.
2. Other Proposed Changes to the ``Lawfully Present'' Definition
    In addition to including DACA recipients in the definition of 
``lawfully present'' for the purposes of eligibility for health 
insurance coverage through an Exchange, a BHP, and for eligibility 
under the CHIPRA 214 option in Medicaid and CHIP, CMS is proposing 
several other clarifications and technical adjustments to the 
definition proposed at 45 CFR 155.20, as compared to the definition 
currently at 45 CFR 152.2.
    First, in paragraph (1) of the proposed definition of ``lawfully 
present'' at 45 CFR 155.20, we propose some revisions as compared to 
paragraph (1) of the definition currently at 45 CFR 152.2. In the 
current regulations at 45 CFR 152.2, paragraph (1) provides that 
qualified aliens, as defined in the Personal Responsibility and Work 
Opportunity Act (PRWORA) at 8 U.S.C. 1641, are lawfully present. 
Throughout the proposed definition at 45 CFR 155.20, we propose a 
nomenclature change to use the term ``noncitizen'' instead of ``alien'' 
when appropriate to align with more modern terminology. Additionally, 
in paragraph (1) of the proposed definition at 45 CFR 155.20, we 
propose to cite the definition of ``qualified noncitizen'' at 42 CFR 
435.4, rather than the definition of ``qualified alien'' in PRWORA. The 
definition of ``qualified noncitizen'' currently at 42 CFR 435.4 
includes the term ``qualified alien'' as defined at 8 U.S.C. 1641(b) 
and (c). We note that for purposes of Exchange coverage and APTC 
eligibility, citizens of the Freely Associated States (FAS) living in 
the United States under the Compacts of Free Association (COFA), 
commonly referred to as COFA migrants, are not considered qualified 
noncitizens because the statutory provision at 8 U.S.C.1641(b)(8) 
making such individuals qualified noncitizens only applies to Medicaid. 
Similarly, for purposes of BHP eligibility, COFA migrants are not 
considered qualified noncitizens by cross-referencing the BHP 
definition of ``lawfully present'' at 42 CFR 600.5 to 45 CFR 155.20. 
Please see section II.D.3. of this proposed rule, where we discuss this 
further and we seek comment on whether to provide a more detailed 
definition of ``qualified noncitizen'' at 42 CFR 435.4. Pending such 
comments, and to ensure alignment across CMS programs, we propose that 
the Exchange regulations at 45 CFR 155.20 define ``qualified 
noncitizen'' by including a citation to the Medicaid regulations at 42 
CFR 435.4, rather than to PRWORA.
    Further, in the current definition of ``lawfully present'' at 45 
CFR 152.2, CMS included in paragraph (2), a noncitizen in a 
nonimmigrant status who has not violated the terms of the status under 
which they were admitted or the status to which they have changed since 
their admission. In this rule, we propose in paragraph (2) of 45 CFR 
155.20, modifying this language such that a noncitizen in a valid 
nonimmigrant status would be deemed lawfully present. Determining 
whether an individual has violated the terms of their status is a 
responsibility of DHS, not CMS. Accordingly, this proposed change would 
ensure coverage of noncitizens in a nonimmigrant status that has not 
expired, so long as DHS has not determined those noncitizens have 
violated their status.
    Exchanges would continue to submit requests to verify an 
applicant's nonimmigrant status through a data match with DHS via the 
Federal data services hub using DHS' Systematic Alien Verification for 
Entitlements (SAVE) system. If SAVE indicates that the applicant has no 
eligible immigration status, the applicant would not be eligible for 
coverage. As such, this modification will simplify the eligibility 
verification process, so that a nonimmigrant's immigration status can 
be verified solely using the existing SAVE process, and reduce the 
number of individuals for whom an Exchange or State agency may need to 
request additional information. We also believe this change will 
promote simplicity, consistency in program administration, and program 
integrity given the reliance on a Federal trusted data source, while 
eliminating the agency's responsibility to understand and evaluate the 
minute complexities of the various immigration statuses and 
regulations.
    We also propose a minor technical change in paragraph (4) of the 
proposed definition of ``lawfully present'' at 45 CFR 155.20, as 
compared to the definition of ``lawfully present'' currently in 
paragraph (4)(i) at 45 CFR 152.2, to refer to individuals who are 
``granted,'' rather than ``currently in'' temporary resident status, as 
this language more accurately refers to how this status is conferred. 
We similarly propose a minor technical change in paragraph (5) of the 
proposed definition of ``lawfully present'' at 45 CFR 155.20, as 
compared to the definition of ``lawfully present'' currently in 
paragraph (4)(ii) at 45 CFR 152.2, to refer to individuals who are 
``granted,'' rather than ``currently under'' Temporary Protected Status 
(TPS), as this language more accurately refers to how DHS confers this 
temporary status upon individuals.
    Paragraph (4)(iii) of the current definition at 45 CFR 152.2 
provides that noncitizens who have been granted employment 
authorization under 8 CFR 274a.12(c)(9), (10), (16), (18), (20), (22), 
or (24) are considered lawfully present. In paragraph (6) of the 
proposed definition of ``lawfully present'' at 45 CFR 155.20, we 
propose to cross reference 8 CFR 274a.12(c) in its entirety in order to 
simplify the regulatory definition and verification process. We are 
proposing this modification to the regulatory text to include all 
noncitizens who have been granted an Employment Authorization

[[Page 25318]]

Document (EAD) under 8 CFR 274a.12(c), as USCIS has authorized these 
noncitizens to accept employment in the United States. USCIS may grant 
noncitizens employment authorization under this regulatory provision 
based on the noncitizen's underlying immigration status or relief 
granted, an application for such status or other immigration relief, or 
other basis. Almost all noncitizens granted an EAD under 8 CFR 
274a.12(c) are already considered lawfully present under existing 
regulations, either at in paragraph (4)(iii) of the defintion at 45 CFR 
152.2 or within 45 CFR 152.2 more broadly. This modification would add 
only two minor categories to the proposed definition: noncitizens 
granted employment authorization under 8 CFR 274a.12(c)(35) and (36). 
Individuals covered under 8 CFR 274a.12(c)(35) and (36) are noncitizens 
with certain approved employment-based immigrant visa petitions who are 
transitioning from an employment-based nonimmigrant status to lawful 
permanent resident (LPR) status, and their spouses and children, for 
whom immigrant visa numbers are not yet available. These EAD categories 
act as a ``bridge'' to allow these noncitizens to maintain work 
authorization after their nonimmigrant status expires while they await 
an immigrant visa to become available. Because these individuals were 
previously eligible for insurance programs by virtue of their 
nonimmigrant status, the proposed rule would simply allow their 
eligibility to continue until they are eligible to apply to adjust to 
LPR status.
    This change to consider ``lawfully present'' all individuals with 
an EAD granted under 8 CFR 274a.12(c) is beneficial because Exchanges 
can usually verify that an individual has been granted an EAD under 8 
CFR 274a.12(c) in real time through SAVE, at the initial step of the 
verification process. Thus, the proposed revision to the definition 
would help to streamline and expedite verification of status for 
individuals who have been granted an EAD under this regulatory 
provision.
    Further, to reduce duplication and confusion, we propose to remove 
the clause currently in paragraph (4)(ii) of the defintion in 45 CFR 
152.2, referring to ``pending applicants for TPS who have been granted 
employment authorization,'' as these individuals would be covered under 
proposed paragraph (6) of the definition of ``lawfully present'' at 45 
CFR 155.20.
    We propose a minor technical modification to the citation in 
paragraph (7) of the definition of ``lawfully present'' to more 
accurately describe Family Unity beneficiaries. Family Unity 
beneficiaries are individuals who entered the United States and have 
been continuously residing in the United States since May 1988, and who 
have a family relationship (spouse or child) to a noncitizen with 
``legalized status.'' \32\ The current definition of ``lawfully 
present'' at 45 CFR 152.2 includes Family Unity beneficiaries eligible 
under section 301 of the Immigration Act of 1990 (Pub. L. 101-649, 
enacted November 29, 1990), as amended. However, DHS also considers as 
Family Unity beneficiaries individuals who are granted benefits under 
section 1504 of the Legal Immigration and Family Equity (LIFE) Act 
Amendments of 2000 (enacted by reference in Pub. L. 106-554, enacted 
December 21, 2000), referred to hereinafter as the LIFE Act Amendments. 
In this rule, we propose to amend the definition to include individuals 
who are granted benefits under section 1504 of the LIFE Act Amendments 
for consistency with DHS's policy to consider such individuals Family 
Unity beneficiaries.
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    \32\ See USCIS Form I-817 (Application for Family Unity 
Benefits) and Instructions available at https://www.uscis.gov/sites/default/files/document/forms/i-817.pdf. https://www.uscis.gov/sites/default/files/document/forms/i-817instr.pdf.
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    As discussed previously, in paragraph (9) of the proposed 
definition of ``lawfully present'' at 45 CFR 155.20, we propose an 
additional clause clarifying that all recipients of deferred action, 
including DACA recipients, are lawfully present for purposes of 45 CFR 
part 155, which concerns eligibility to enroll in a QHP through an 
Exchange, and by cross-reference at 42 CFR 600.5, eligibility for a 
BHP.
    In paragraph (10) of the proposed definition of ``lawfully 
present'' at 45 CFR 155.20, we propose to clarify that individuals with 
a pending application for adjustment of status are not required to have 
an approved immigrant visa petition in order to be considered lawfully 
present. We propose this change because in some circumstances, DHS does 
not require a noncitizen to have an approved immigrant visa petition to 
apply for adjustment of status. For example, USCIS allows noncitizens 
in some employment-based categories, as well as immediate relatives of 
U.S. citizens, to concurrently file a visa petition with an application 
for adjustment of status. Further, there are some scenarios where 
individuals need not have an approved visa petition at all, such as 
individuals applying for adjustment of status under the Cuban 
Adjustment Act. In addition, the DHS SAVE verification system generally 
does not currently return information to requestors on the status of 
underlying immigrant visa petitions associated with the adjustment of 
status response. This proposed modification would simplify verification 
for these noncitizens, reduce the burden on States and individual 
applicants, and align with current DHS procedures.
    Paragraph (5) of the current definition of ``lawfully present'' 
pertains to applicants for asylum, withholding of removal, or relief 
under the Convention Against Torture and Other Cruel, Inhuman, or 
Degrading Treatment or Punishment (hereinafter ``Convention Against 
Torture''). In this rule, we are proposing to move this text to 
paragraph (12) of the definition of ``lawfully present'' at 45 CFR 
155.20, and remove the portion of the text pertaining to noncitizens 
age 14 and older who have been granted employment authorization, as 
these individuals are noncitizens granted employment authorization 
under 8 CFR 274a.12(c)(8), and as such, are included in paragraph (6) 
of our proposed definition of ``lawfully present'' at 45 CFR 155.20. 
This proposed change is intended to reduce duplication and will not 
have a substantive impact on the definition of ``lawfully present.''
    We further propose to remove the requirement in the current 
definition that individuals under age 14 who have filed an application 
for asylum, withholding of removal, or relief under the Convention 
Against Torture have had their application pending for 180 days to be 
deemed lawfully present. We originally included this 180-day waiting 
period for children under 14 in our definition of ``lawfully present'' 
to align with the statutory waiting period before applicants for asylum 
and other related forms of protection can be granted an EAD. We now 
propose to change this so that children under 14 are considered 
lawfully present without linking their eligibility to the 180-day 
waiting period for an EAD. We note that children under age 14 are 
generally are not permitted to work in the United States under the Fair 
Labor Standards Act,\33\ and as such, the EAD waiting period has no 
direct nexus to their eligibility for coverage. Under the proposed 
rule, Exchanges and States would continue to verify that a child has 
the relevant pending application or is listed as a dependent on a 
parent's \34\ pending application for asylum or related protection 
using DHS's SAVE system. This proposed modification captures the same 
population of children that were previously covered as lawfully 
present, without respect to

[[Page 25319]]

how long their applications have been pending.
---------------------------------------------------------------------------

    \33\ See 29 CFR 570.2.
    \34\ See 8 U.S.C. 1101(b)(2) (definition of ``parent'').
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    In paragraph (13) of the proposed definition of ``lawfully 
present'' at 45 CFR 155.20, we propose to include individuals with an 
approved petition for Special Immigrant Juvenile (SIJ) classification. 
The definition currently at paragraph (7) of 45 CFR 152.2 refers 
imprecisely to noncitizens with a ``pending application for [SIJ] 
status'' and therefore unintentionally excludes from the definition of 
``lawfully present,'' children whose petitions for SIJ classification 
have been approved but who cannot yet apply for adjustment of status 
due to lack of an available visa number.\35\ Due to high demand for 
visas in this category, for many applicants it can take several years 
for a visa number to become available. SIJs are an extremely vulnerable 
population and as such, we propose to close this unintentional gap so 
that all children with an approved petition for SIJ classification are 
deemed lawfully present.
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    \35\ Moreover, SIJ classification is not itself a status and 
should not be described as such in the regulation. The current 
regulatory reference to a ``pending application for SIJ status'' has 
been construed to encompass noncitizens with a pending SIJ petition. 
It is not limited to noncitizens with a pending application for 
adjustment of status based on an approved SIJ petition. Therefore, 
the proposed regulatory change does not modify the current practice 
of determining lawful presence for noncitizens in the SIJ process 
based on a pending petition, rather than (as with other categories 
of noncitizens seeking (LPR) status) based on a pending application. 
Rather, the modification we propose in this rule clarifies the 
language so that both pending and approved SIJ petitions convey 
lawful presence for the purposes of eligibility for health insurance 
coverage through an Exchange, a BHP, and for eligibility under the 
CHIPRA 214 option in Medicaid and CHIP, whether or not an individual 
with an approved SIJ petition has an adjustment application pending.
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    In May 2022, USCIS began considering granting deferred action to 
noncitizens with approved petitions for SIJ classification but who are 
unable to apply for adjustment of status solely due to unavailable 
immigrant visa numbers. Accordingly, based on the proposed changes at 
45 CFR 155.20, SIJs could be considered ``lawfully present'' under 
three possible categories, as applicable: paragraph (9) deferred 
action; paragraph (10) a pending adjustment of status application; or 
paragraph (13) a pending or approved SIJ petition. While paragraph (9) 
would cover individuals with approved SIJ petitions who cannot apply 
for adjustment of status, there may be a small number of SIJs with 
approved petitions whose request for deferred action has not yet been 
decided, for whom DHS has declined to defer action, or who were not 
considered for deferred action. The proposed modification to paragraph 
(13) of the definition of ``lawfully present'' at 45 CFR 155.20 would 
capture individuals who have established eligibility for SIJ 
classification but do not qualify under paragraph (9) or (10) of the 
proposed definition of ``lawfully present'' at 45 CFR 155.20, and 
eliminate an unintentional gap in the definition.
    We also propose a nomenclature change to the definitions currently 
at 45 CFR 152.2 to use the term ``noncitizen,'' rather than ``alien'' 
in the definition proposed at 45 CFR 155.20 to align with more modern 
terminology.
3. Severability
    We propose to add a new section at 45 CFR 155.30 addressing the 
severability of the provisions proposed in this rule. In the event that 
any portion of a final rule is declared invalid, CMS intends that the 
various provisions of the definition of ``lawfully present'' be 
severable, and that the changes we are proposing with respect to the 
definitions of ``lawfully present'' in 45 CFR 155.20 would continue 
even if some of the proposed changes to any individual category are 
found invalid. The severability of these provisions is discussed in 
detail in section III. of this proposed rule.

D. Eligibility in States, the District of Columbia, the Northern 
Mariana Islands, and American Samoa and Children's Health Insurance 
Programs (CHIPs) (42 CFR 435.4 and 457.320(c))

1. Lawfully Residing and Lawfully Present Definitions
    Section 214 of CHIPRA is currently codified at sections 
1903(v)(4)(A) and 2107(e)(1)(O) of the Act to allow States and 
territories an option to provide Medicaid and CHIP benefits to children 
under age 21 (under age 19 for CHIP) and pregnant individuals who are 
``lawfully residing'' in the United States, without a 5-year waiting 
period, provided that they meet all other eligibility requirements in 
the State (for example, income). When States elect to cover pregnant 
individuals and children under the CHIPRA 214 option, this coverage 
includes the 60-day postpartum period or, at State option, the 12-month 
postpartum period (including for adolescents who become pregnant),\36\ 
when they are lawfully residing and meet all other eligibility 
requirements in the State. While the Medicaid and CHIP statutes do not 
define ``lawfully residing'', we have previously recognized that this 
term is broader than the definition of ``qualified noncitizen'', 
discussed in section II.D.3. of this proposed rule.
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    \36\ 42 U.S.C. 1396a(e)(16); 42 U.S.C. 1397gg(e)(1)(J). See SHO 
#21-0007, ``Improving Maternal Health and Extending Postpartum 
Coverage in Medicaid and the Children's Health Insurance Program 
(CHIP)'' (issued Dec 7, 2021), available at https://www.medicaid.gov/federal-policy-guidance/downloads/sho21007.pdf. See 
also Sec. 2, Division FF, Title V, Subtitle D, Sec. 5113 of the 
Consolidated Appropriations Act, 2023 (Pub. L. 117-328) (removing 
the 5-year limitation on the State option to extend postpartum 
coverage to 12-months).
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    As discussed previously in this rule, on July 1, 2010, CMS issued 
the 2010 SHO letter providing guidance for State Medicaid and CHIP 
agencies to implement section 214 of CHIPRA. In the 2010 SHO letter, 
CMS interpreted ``lawfully residing'' to mean individuals who are 
``lawfully present'' in the United States and who are residents of the 
State in which they are applying under the State's Medicaid or CHIP 
residency rules.\37\ The term ``lawfully present'' is defined in the 
2010 SHO and was based on the definition of ``lawfully present'' that 
is now codified at 8 CFR 1.3 with some revisions necessary for updating 
or clarifying purposes, or as otherwise determined appropriate for the 
Medicaid and CHIP programs consistent with the Act.
---------------------------------------------------------------------------

    \37\ Centers for Medicare & Medicaid Services. (2010). SHO #10-
006: Medicaid and CHIP Coverage of ``Lawfully Residing'' Children 
and Pregnant Women. https://downloads.cms.gov/cmsgov/archived-downloads/smdl/downloads/sho10006.pdf.
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    On August 28, 2012, CMS issued the 2012 SHO, excluding DACA 
recipients from being considered lawfully residing for Medicaid and 
CHIP under the CHIPRA 214 option.\38\ The 2012 SHO established CMS' 
current interpretation of ``lawfully present'' indicating that DACA 
recipients, unlike other recipients of deferred action, are not 
considered lawfully present for purposes of eligibility for Medicaid 
and CHIP under section 214 of CHIPRA. In the 2012 SHO, CMS reasoned 
that because the rationale that DHS offered for adopting the DACA 
policy did not pertain to eligibility for Medicaid and CHIP, 
eligibility for these benefits should not be extended as a result of 
DHS deferring action under DACA. In so reasoning, CMS relied on the 
description of the DACA policy offered by DHS in its ``Exercising 
Prosecutorial Discretion with Respect to Individuals Who Came to the 
United States as Children'' memorandum, which explained that the DACA 
policy was ``necessary to ensure that [its]

[[Page 25320]]

enforcement resources are not expended on these low priority cases.'' 
\39\ The DHS memorandum did not address the availability of health 
insurance coverage through the Exchange, a BHP, Medicaid or CHIP. As 
such, DACA recipients are not currently eligible for Medicaid or CHIP 
programs under the CHIPRA 214 option.
---------------------------------------------------------------------------

    \38\ Centers for Medicare & Medicaid Services. (2012). SHO #12-
002: Individuals with Deferred Action for Childhood Arrivals. 
https://www.medicaid.gov/federal-policy-guidance/downloads/sho-12-002.pdf.
    \39\ United States Department of Homeland Security. (2012) 
Exercising Prosecutorial Discretion with Respect to Individuals Who 
Came to the United States as Children. https://www.dhs.gov/xlibrary/assets/s1-exercising-prosecutorial-discretion-individuals-who-came-to-us-as-children.pdf.
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    We are proposing to define the terms ``lawfully present'' and 
``lawfully residing'' at 42 CFR 435.4. For the same reasons as the 
proposed changes at 45 CFR 155.20, described in section II.C.1. of this 
proposed rule, and to ensure alignment across CMS programs, the 
proposed definition of ``lawfully present'' would remove the exclusion 
of DACA recipients and clarify that they are included in the broader 
category of those granted deferred action as lawfully residing in the 
United States for purposes of Medicaid and CHIP eligibility under the 
CHIPRA 214 option. We are also proposing to add a cross-reference to 
this definition at 42 CFR 457.320(c) for purposes of determining 
eligibility for CHIP. Thus, under the proposed rule, DACA recipients 
who are children under 21 years of age (under age 19 for CHIP) or 
pregnant, including during the postpartum period,\40\ would be eligible 
for Medicaid and CHIP benefits in States that have elected the option 
in their State plan to cover all lawfully residing children or pregnant 
individuals under the CHIPRA 214 option. These individuals would still 
need to meet all other eligibility requirements for coverage in the 
State.\41\ We propose the definition of ``lawfully residing'' to match 
the definition as defined in the 2010 SHO, discussed previously in this 
rule--that an individual is ``lawfully residing'' if they are 
``lawfully present'' in the United States and are a resident of the 
State in which they are applying under the State's Medicaid or CHIP 
residency rules.
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    \40\ The postpartum period for pregnant individuals includes the 
60-day period described in sections 1903(v)(4)(A)(i) and 
2107(e)(1)(O) of the Act or the extended 12-month period described 
in sections 1902(e)(16) and 2107(e)(1)(J) of the Act in States that 
have elected that option.
    \41\ To date, 35 States, the District of Columbia, and three 
territories have elected the CHIPRA 214 option for at least one 
population of children or pregnant individuals in their Medicaid or 
CHIP programs. A current list of States that elect the CHIPRA 214 
option in Medicaid and/or CHIP is available at https://www.medicaid.gov/medicaid/enrollment-strategies/medicaid-and-chip-coverage-lawfully-residing-children-pregnant-women.
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    Further, as discussed in section II.C.2. of this proposed rule 
regarding modifications to the lawfully present definition proposed in 
45 CFR 155.20, we propose in 42 CFR 435.4 each of the same 
clarifications and minor technical changes. The proposed definition of 
``lawfully present'' in 42 CFR 435.4 would mirror the current 
definition of ``lawfully present'' as defined in the 2010 SHO letter 
with the clarification and minor technical changes described previously 
in this proposed rule. We are proposing these rules to align with the 
proposed definition of ``lawfully present'' across programs and for the 
same rationales described in section II.C.2. of this proposed rule.
    The ``lawfully present'' definition proposed at 42 CFR 435.4 is 
identical to the definition proposed at 45 CFR 155.20, except for two 
additional paragraphs related to the territories. Consistent with the 
2010 SHO definition of ``lawfully present,'' paragraph (14) of the 
proposed definition of ``lawfully present'' at 42 CFR 435.4 provides 
that individuals who are lawfully present in American Samoa are 
considered lawfully present. CMS is not proposing a change from its 
current policy described in the 2010 SHO regarding individuals who are 
lawfully present in American Samoa. Paragraph (15) of the proposed 
definition of ``lawfully present'' at 42 CFR 435.4 provides a revised 
description of lawfully present individuals in the Commonwealth of the 
Northern Mariana Islands (CNMI) under 48 U.S.C. 1806(e), as compared to 
paragraph (8) of the definition of ``lawfully present'' in the 2010 
SHO. The 2010 SHO definition covered individuals described in 48 U.S.C. 
1806(e)(1), which granted continued lawful presence in the CNMI to 
certain noncitizens who were lawfully present at that time under former 
CNMI immigration law. This statutory provision expired on November 28, 
2011. However, in the Northern Mariana Islands Long-Term Legal 
Residents Relief Act (Public Law 116-24, enacted June 25, 2019), 
Congress subsequently added a new paragraph (6) to section 1806(e) of 
the Act, creating a new immigration status of ``CNMI Resident'' for 
certain long-term residents of the CNMI. Our proposed definition of 
``lawfully present'' at 45 CFR 435.4 includes CNMI Residents at 
paragraph (15), with an update to reflect the current statute regarding 
individuals who are CNMI residents. Similar language is not included in 
the definition at 45 CFR 155.20 because American Samoa and the CNMI do 
not have Exchanges.
    We also propose a nomenclature change to the definitions of 
``citizenship,'' ``noncitizen,'' and ``qualified noncitizen'' in 42 CFR 
435.4 in order to remove the hyphen in the term ``non-citizen'' and use 
the term ``noncitizen'' throughout those definitions to align with 
terminology used by DHS.
2. Severability
    We propose to add a new section at 42 CFR 435.12 addressing the 
severability of the provisions proposed in this rule. In the event that 
any portion of a final rule might be declared invalid, CMS intends that 
the various provisions of the definition of ``lawfully present'' be 
severable, and that the changes we are proposing with respect to the 
definitions of ``lawfully present'' in Sec.  435.4 would continue even 
if some of the proposed changes to any individual category are found 
invalid. The severability of these provisions is discussed in detail in 
section III. of this proposed rule.
3. Defining Qualified Noncitizen
    As previously discussed, the proposed definition of ``lawfully 
present'' includes an individual who is a ``qualified noncitizen''. 
Under our current Medicaid regulations, a ``qualified non-citizen'' is 
defined at 42 CFR 435.4 and includes an individual described in 8 
U.S.C. 1641(b) and (c). The definition is currently used for 
determining Medicaid eligibility under our regulation at 42 CFR 
435.406, and the definition would also be important for determining 
eligibility of individuals who are seeking CHIPRA section 214 benefits. 
We are considering whether the current definition of qualified 
noncitizen at 42 CFR 435.4 should be modified to provide greater 
clarity and increase transparency for the public. Specifically, we are 
considering whether the definition should be modified to expressly 
provide all of the categories of noncitizens covered by 8 U.S.C. 
1641(b) and (c), as well as additional categories of noncitizens that 
Medicaid agencies are required to cover as a result of subsequently 
enacted

[[Page 25321]]

legislation that was not codified in 8 U.S.C. 1641(b) or (c). For 
example, Federal law requires certain populations to be treated as 
``refugees.'' \42\ Additional categories of noncitizens treated as 
``refugees'' under Federal law that could be specifically described in 
the regulation include, for example, victims of trafficking and certain 
Afghans and Ukrainians.\43\ We are considering whether to revise the 
definition of qualified noncitizen in 42 CFR 435.4 to account for these 
and other noncitizens for clarity and transparency.
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    \42\ Refugees are listed as a category of noncitizens who are 
``qualified aliens'' at 8 U.S.C. 1641(b)(3).
    \43\ To date, these other Federal laws include the Trafficking 
Victims Protection Act of 2000 (22 U.S.C. 7105(b)), relating to 
certain victims of trafficking; section 602(b)(8) of the Afghan 
Allies Protection Act of 2009, Public Law 111-8 (8 U.S.C. 1101 
note), relating to certain Afghan special immigrants; section 
1244(g) of the Refugee Crisis in Iraq Act of 2007 (8 U.S.C. 1157 
note), relating to certain Iraqi special immigrants; section 584(c) 
of Public Law 100-202 (8 U.S.C. 1101 note), relating to Amerasian 
immigrants; section 2502(b) of the Extending Government Funding and 
Delivering Emergency Assistance Act of 2021, Public Law 117-43, 
relating to certain Afghan parolees; and section 401 of the 
Additional Ukraine Supplemental Appropriations Act of 2022, Public 
Law 117-128, relating to certain Ukrainian parolees.
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    We note that there is at least one difference in how the term 
``qualified noncitizen'' applies to Medicaid compared to the other 
programs discussed in this proposed rule. Generally, although the 
definition of ``qualified alien'' in 8 U.S.C. 1641 applies to all of 
the programs, COFA migrants are only considered ``qualified aliens'' 
for purposes of the Medicaid program. The Consolidated Appropriations 
Act, 2021 added individuals who lawfully reside in the United States in 
accordance with COFA to the definition of qualified alien under new 
paragraph (8) of 8 U.S.C. 1641(b).\44\ This paragraph specifies that 
COFA migrants' eligibility only extends to the designated Federal 
program defined in 8 U.S.C. 1612(b)(3)(C), which is the Medicaid 
program.
---------------------------------------------------------------------------

    \44\ Div. CC, Title II, sec. 208, Public Law 116-260.
---------------------------------------------------------------------------

    Since CHIP is not included as a designated Federal program at 8 
U.S.C. 1612(b)(3)(C), we acknowledge that COFA migrants would need to 
be excluded from the definition of qualified noncitizen for separate 
CHIP through an exception at 42 CFR 457.320(c). However, we also note 
that under the definition of ``lawfully present,'' COFA migrants with a 
valid nonimmigrant status, as defined in 8 U.S.C. 1101(a)(15) or 
otherwise under the immigration laws (as defined in 8 U.S.C. 
1101(a)(17)), may be eligible for CHIP in States that have elected the 
CHIPRA 214 option, if they meet all other eligibility requirements 
within the State. Similarly, enrollment in a QHP through an Exchange 
and BHP enrollment are not included as designated Federal programs, and 
as such, COFA migrants are not considered qualified noncitizens for 
purposes of eligibility for Exchange coverage, APTC, cost sharing 
reductions, or BHP eligibility. However, COFA migrants would generally 
be considered lawfully present under paragraph (2) of the proposed 
``lawfully present'' definition at 45 CFR 152.2 regarding 
nonimmigrants, as they are considered lawfully present under existing 
regulations in paragraph (2) of the defintion at 45 CFR 152.2 today, 
and thus would continue to be eligible for Exchange coverage in a QHP, 
APTC, CSRs, and BHP, if they meet all other eligibility requirements 
for those programs.
    Because noncitizens who are treated as refugees for purposes of 
Medicaid eligibility are also treated as refugees for purposes of CHIP 
eligibility, these categories of noncitizens (discussed previously in 
this proposed rule) are also being considered for the definition of 
qualified noncitizen for purposes of CHIP. We seek public comment on 
our consideration of modifying the definition of qualified noncitizen 
in 42 CFR 435.4 in this manner.

E. Administration, Eligibility, Essential Health Benefits, Performance 
Standards, Service Delivery Requirements, Premium and Cost Sharing, 
Allotments, and Reconciliation (42 CFR Part 600)

    Section 1331 of the ACA provides States with an option to establish 
a BHP.\45\ In States that elect to implement a BHP, the program makes 
affordable health benefits coverage available for lawfully present 
individuals under age 65 with household incomes between 133 percent and 
200 percent of the Federal poverty level (FPL) who are not otherwise 
eligible for Medicaid, CHIP, or affordable employer-sponsored coverage, 
or for individuals whose income is below these levels but are lawfully 
present noncitizens ineligible for Medicaid. For those States that have 
expanded Medicaid coverage under section 1902(a)(10)(A)(i)(VIII) of the 
Act, the lower income threshold for BHP eligibility is effectively 138 
percent of the FPL due to the application of a required 5 percent 
income disregard in determining the upper limits of Medicaid income 
eligibility (section 1902(e)(14)(I) of the Act). Currently, there are 
two States that operate a BHP--Minnesota and New York.\46\
---------------------------------------------------------------------------

    \45\ See 42 U.S.C. 18051. Also see 42 CFR part 600.
    \46\ Minnesota's program began January 1, 2015, and New York's 
program began April 1, 2015. For more information, see https://www.medicaid.gov/basic-health-program/index.html. Also see, for 
example, 87 FR 77722, available at https://www.govinfo.gov/content/pkg/FR-2022-12-20/pdf/2022-27211.pdf.
---------------------------------------------------------------------------

    In this rule, we propose conforming amendments to the BHP 
regulations to remove the current cross-reference to 45 CFR 152.2 in 
the definition of ``lawfully present'' at 42 CFR 600.5. We also propose 
to amend the definition of ``lawfully present'' in the BHP regulations 
at 42 CFR 600.5 to instead cross-reference the definition of ``lawfully 
present'' proposed in this rule at 45 CFR 155.20. This proposal, if 
finalized, would result in DACA recipients being considered lawfully 
present for purposes of eligibility to enroll in a BHP in a State that 
elects to implement such a program, if otherwise eligible. Also, if the 
proposals are finalized, this modification would ensure that the 
definition of ``lawfully present'' used to determine eligibility for 
coverage under a BHP is aligned with the definition of ``lawfully 
present'' used for the other insurance affordability programs. This 
alignment is important because it would help ensure a State could 
provide continuity of care for BHP enrollees who may have been 
previously eligible for a QHP or Medicaid. Additionally, pursuant to 42 
CFR 600.310(a), the States use the single streamlined application that 
is used to determine eligibility for a QHP in an Exchange as well as 
Medicaid and CHIP. An aligned definition of ``lawfully present'' would 
reduce administrative burdens for the State as well as the potential 
for incorrect eligibility determinations.

III. Severability

    As described in the background section of this proposed rule, the 
ACA generally \47\ requires that in order to enroll in a QHP through an 
Exchange, an individual must be either a citizen or national of the 
United States or be

[[Page 25322]]

``lawfully present'' in the United States.\48\ The ACA also generally 
requires that individuals be ``lawfully present'' in order to be 
eligible for insurance affordability programs such as PTC,\49\ 
APTC,\50\ and CSRs.\51\ Additionally, enrollees in a BHP are required 
to meet the same citizenship and immigration requirements as QHP 
enrollees.\52\ The ACA does not define ``lawfully present'' beyond 
specifying that an individual is only considered lawfully present if 
they are reasonably expected to be lawfully present for the period of 
their enrollment,\53\ and that CMS is required to verify that Exchange 
applicants are lawfully present in the United States.\54\ Additionally, 
the CHIPRA 214 option gives States the option to elect to cover 
``lawfully residing'' pregnant individuals and children in their 
Medicaid and/or CHIP programs. Since 2010, CMS has interpreted 
``lawfully residing'' to mean individuals who are ``lawfully present'' 
in the United States and who are residents of the State in which they 
are applying under the State's Medicaid or CHIP residency rules.\55\ 
The interpretation of ``lawfully residing'' proposed in this rulemaking 
is thus consistent with longstanding CMS guidance.
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    \47\ States may pursue a waiver under section 1332 of the 
Affordable Care Act (ACA) that could waive the ``lawfully present'' 
framework in section 1312(f)(3) of the ACA. See 42 U.S.C. 
18052(a)(2)(B). There is currently one State (Washington) with an 
approved section 1332 waiver that includes a waiver of the 
``lawfully present'' framework to the extent necessary to permit all 
State residents, regardless of immigration status, to enroll in a 
QHP and Qualified Dental Plan (QDP) through the State's Exchange, as 
well as to apply for State subsidies to defray the costs of 
enrolling in such coverage. Consumers who are eligible for Exchange 
coverage under the waiver remain ineligible for PTC. For more 
information on this State's section 1332 waiver, see https://www.cms.gov/cciio/programs-and-initiatives/state-innovation-waivers/section_1332_state_innovation_waivers-.
    \48\ 42 U.S.C. 18032(f)(3).
    \49\ 26 U.S.C. 36B(e)(2).
    \50\ 42 U.S.C. 18082(d).
    \51\ 42 U.S.C. 18071(e).
    \52\ 42 U.S.C. 18051(e).
    \53\ 42 U.S.C. 18032(f)(3), 42 U.S.C. 18071(e)(2).
    \54\ 42 U.S.C. 18081(c)(2)(B).
    \55\ Centers for Medicare & Medicaid Services. (2010). SHO #10-
006: Medicaid and CHIP Coverage of ``Lawfully Residing'' Children 
and Pregnant Women. https://downloads.cms.gov/cmsgov/archived-downloads/smdl/downloads/sho10006.pdf.
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    Since 1996, when the Department of Justice's Immigration and 
Naturalization Service issued an interim final rule defining the term 
``lawfully present'' as used in the recently enacted PRWORA, Federal 
agencies have considered deferred action recipients to be ``lawfully 
present'' for purposes of certain Social Security benefits (see 
Definition of the Term Lawfully Present in the United States for 
Purposes of Applying for Title II Benefits Under Section 401(b)(2) of 
Public Law 104-193, interim final rule, 61 FR 47039). In the 
intervening years, Congress has been aware of agency actions to clarify 
definitions of ``lawfully present'' consistent with their statutory 
authority and has taken no action to codify a detailed definition of 
``lawfully present'' for use in administering Federal benefit programs. 
Given the lack of a statutory definition of ``lawfully present'' or 
``lawfully residing'' in the ACA or the CHIPRA, and given the 
rulemaking authority granted to CMS under 42 U.S.C. 1302, 42 U.S.C. 
18051, and 42 U.S.C. 18041, HHS has discretion to determine the best 
legal interpretations of these terms for purposes of administering its 
programs. Although the intent of this proposed rule is to make 
conforming changes to the definition of ``lawfully present'' across all 
CMS insurance affordability programs, we recognize the underlying 
statutory authorities and respective regulations contain some 
differences and apply to different populations. It is CMS' intent that 
if the rules for one program are found unlawful, the rules for other 
programs would remain intact. As previously described, CMS' authority 
to remove the exclusion treating recipients of deferred action under 
the DACA policy differently from other noncitizens with deferred action 
under the definition of ``lawfully present'' for purposes of 
eligibility for insurance affordability programs is well-supported in 
law and practice and should be upheld in any legal challenge.
    Similarly, we have proposed technical changes to the definition of 
``lawfully present'' for the purposes of eligibility for insurance 
affordability programs, and we believe those changes are also well-
supported in law and practice and should be upheld in any legal 
challenge. CMS also believes that its exercise of its authority 
reflects sound policy.
    However, in the event that any portion of a final rule is declared 
invalid, CMS intends that the other proposed changes to the definition 
of ``lawfully present'' and within the changes to the regulations 
defining qualified noncitizens would be severable. For example, if a 
court were to find unlawful the inclusion of one provision in the 
definition of ``lawfully present,'' for purposes of eligibility for any 
health insurance affordability program, CMS intends the remaining 
features proposed in sections II.C.1., II.C.2., II.D.1., and II.D.3. of 
this proposed rule to stand. Likewise, CMS intends that if one 
provision of the changes to the definition of ``lawfully present'' is 
struck down, that other provisions within that regulation be severable 
to the extent possible. For example, if one of the provisions discussed 
in section II.C.2. (Other Proposed Changes to the Definition of 
Lawfully Present) of this proposed rule is found invalid, CMS intends 
that the other provisions discussed in that section be severable.
    Additionally, a final rule that includes only some provisions of 
this proposed rule would have significant advantages and be worthwhile 
in itself. For example, a rule consisting only of the technical and 
clarifying changes proposed in section II.C.2. of this proposed rule, 
applied through cross-reference to Exchanges, BHPs, and Medicaid and 
CHIP in States that elect the CHIPRA 214 option, would allow CMS to 
more effectively verify lawful presence of noncitizens for purposes of 
eligibility for health insurance affordability programs. Similarly, a 
rule consisting only of the changes proposed in section II.D.3. of this 
rule, would increase transparency for consumers and State Medicaid and 
CHIP agencies. A rule consisting solely of the changes proposed in 
section II.C.1. of this proposed rule would have significant benefits 
because it would increase access to health coverage for DACA 
recipients. These reasons alone would justify the continued 
implementation of these policies.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), we are required to provide 60-day notice in the Federal Register 
and solicit public comment before a collection of information 
requirement is submitted to the Office of Management and Budget (OMB) 
for review and approval. To fairly evaluate whether an information 
collection should be approved by OMB, section 3506(c)(2)(A) of the PRA 
requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements. Comments, if received, will be responded to within the 
subsequent final rule.

A. Wage Estimates

    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics' (BLS's) May 2021 National Occupational Employment and Wage 
Estimates for all salary estimates (https://www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 1 presents BLS's mean hourly wage, 
our estimated cost of fringe benefits and overhead

[[Page 25323]]

(calculated at 100 percent of salary), and our adjusted hourly wage.

                          Table 1--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                               Fringe benefits
                                            Occupational    Mean hourly wage      and other      Adjusted hourly
            Occupation title                    code             ($/hr)        indirect costs      wage ($/hr)
                                                                                   ($/hr)
----------------------------------------------------------------------------------------------------------------
Computer Programmer.....................           15-1251             46.46             46.46             92.92
Database and Network Administrator &               15-1240             49.25             49.25             98.50
 Architect..............................
Eligibility Interviewers, Govt Programs.           43-4061             23.35             23.35             46.70
----------------------------------------------------------------------------------------------------------------

    For States and the private sector, employee hourly wage estimates 
have been adjusted by a factor of 100 percent. This is necessarily a 
rough adjustment, both because fringe benefits and other indirect costs 
vary significantly across employers, and because methods of estimating 
these costs vary widely across studies. Nonetheless, there is no 
practical alternative, and we believe that doubling the hourly wage to 
estimate total cost is a reasonably accurate estimation method.
    We adopt an hourly value of time based on after-tax wages to 
quantify the opportunity cost of changes in time use for unpaid 
activities. This approach matches the default assumptions for valuing 
changes in time use for individuals undertaking administrative and 
other tasks on their own time, which are outlined in an Assistant 
Secretary for Planning and Evaluation (ASPE) report on ``Valuing Time 
in U.S. Department of Health and Human Services Regulatory Impact 
Analyses: Conceptual Framework and Best Practices.'' \56\ We start with 
a measurement of the usual weekly earnings of wage and salary workers 
of $998.\57\ We divide this weekly rate by 40 hours to calculate an 
hourly pre-tax wage rate of $24.95. We adjust this hourly rate 
downwards by an estimate of the effective tax rate for median income 
households of about 17 percent, resulting in a post-tax hourly wage 
rate of $20.71. We adopt this as our estimate of the hourly value of 
time for changes in time use for unpaid activities.
---------------------------------------------------------------------------

    \56\ Department of Health and Human Services, Office of the 
Assistant Secretary for Planning and Evaluation. 2017. ``Valuing 
Time in U.S. Department of Health and Human Services Regulatory 
Impact Analyses: Conceptual Framework and Best Practices.'' https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework.
    \57\ U.S. Bureau of Labor Statistics. Employed full time: Median 
usual weekly nominal earnings (second quartile): Wage and salary 
workers: 16 years and over [LEU0252881500A], retrieved from FRED, 
Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/LEU0252881500A. Annual Estimate, 2021.
---------------------------------------------------------------------------

B. Adjustment to State Cost Estimates

    To estimate the financial burden on States pertaining to Medicaid 
and CHIP information collection changes, it was important to consider 
the Federal Government's contribution to the cost of administering the 
Medicaid program. The Federal Government provides funding based on a 
Federal medical assistance percentage (FMAP) that is established for 
each State, based on the per capita income in the State as compared to 
the national average. FMAPs for care and services range from a minimum 
of 50 percent in States with higher per capita incomes to a maximum of 
83 percent in States with lower per capita incomes. For Medicaid, all 
States receive a 50 percent matching rate for administrative 
activities. States also receive higher Federal matching rates for 
certain administrative activities such as systems improvements, 
redesign, or operations. For CHIP, States can claim enhanced FMAP for 
administrative activities up to 10 percent of the State's total 
computable expenditures within the State's fiscal year allotment. As 
such, and taking into account the Federal contribution to the costs of 
administering the Medicaid and CHIP programs for purposes of estimating 
State burden with respect to collection of information, we elected to 
use the higher end estimate that the States would contribute 50 percent 
of the costs, even though the State burden may be much smaller, 
especially for CHIP administrative activities.
    Financial burden pertaining to BHP and State Exchange information 
collection changes is covered entirely by States, as discussed further 
in sections IV.C.2. through IV.C.4. of this proposed rule.

C. Proposed Information Collection Requirements (ICRs)

1. ICRs Regarding the CHIPRA 214 Option (42 CFR 435.4 and 457.320(c))
    The following proposed changes will be submitted to OMB for review 
under OMB control number 0938-1147 (CMS-10410) regarding Medicaid and 
CHIP eligibility.
    As discussed previously, the changes proposed to the definition of 
``lawfully present'' would impact eligibility for Medicaid and CHIP in 
States that have elected the CHIPRA 214 option. This proposal would 
impact the 35 States, the District of Columbia, and three territories 
that have elected the CHIPRA 214 option for at least one population of 
children or pregnant individuals in their CHIP or Medicaid programs. 
For simplicity, in the calculations that follow we will refer to this 
total as ``States.'' For the purposes of these estimates, we will 
assume that these proposals do not cause any States to opt in or out of 
the CHIPRA 214 option. We further note that currently, 10 States cover 
either children, or children and pregnant individuals regardless of 
immigration status using State-only funds.\58\ However, we are 
including those States in our estimates, because States may need to 
adjust their systems to reflect the change in the route of eligibility, 
or to address the new availability of Federal matching funds for 
certain individuals.
---------------------------------------------------------------------------

    \58\ As of December 2022, those States are California, the 
District of Columbia, Illinois, Maine, Massachusetts, New York, 
Oregon, Rhode Island, Vermont, and Washington. ``Health Coverage and 
Care of Immigrants,'' Kaiser Family Foundation, https://www.kff.org/racial-equity-and-health-policy/fact-sheet/health-coverage-and-care-of-immigrants/. Accessed March 2, 2023.
---------------------------------------------------------------------------

    We estimate that it would take each State 100 hours to develop and 
code the changes to its Medicaid or CHIP eligibility systems to 
correctly evaluate and verify eligibility under the revised definition 
of ``lawfully present'' to include DACA recipients and certain other 
limited groups of noncitizens in the CHIPRA 214 group, as outlined in 
section II.C.2. of this proposed rule. Of those 100 hours, we estimate 
it would take a database and network administrator and architect 25 
hours at $98.50 per hour and a computer programmer 75 hours at $92.92 
per hour. In aggregate, we estimate a one-time burden of 3,900 hours 
(39 States x

[[Page 25324]]

100 hours) at a cost of $367,829 (39 States x [(25 hours x $98.50 per 
hour) + (75 hours x $92.92 per hour)]) for completing the necessary 
updates to Medicaid systems. Taking into account the 50 percent Federal 
contribution to Medicaid and CHIP program administration, the estimated 
State one-time cost would be $4,716 per State, and $183,914 in total 
for all States.
    These proposed requirements, if finalized, would impose additional 
costs on States to process the applications for individuals impacted by 
the proposals in this rule. Those impacts are accounted for under OMB 
control number 0938-1191 (Data Collection to Support Eligibility 
Determinations for Insurance Affordability Programs and Enrollment 
through Health Insurance Marketplaces, Medicaid and Children's Health 
Insurance Program Agencies (CMS-10440)), discussed in section IV.C.3. 
of this proposed rule, which pertains to the streamlined application.
2. ICRs Regarding the BHP (42 CFR 600.5)
    The following proposed changes will be submitted to OMB for review 
under OMB control number 0938-1218 (CMS-10510).
    The impact of this change is with regards to the two States with 
BHPs--Minnesota and New York.\59\ We estimate that it would take each 
State 100 hours to develop and code the changes to its BHP eligibility 
and verification system to correctly evaluate eligibility under the 
revised definition of ``lawfully present'' to include DACA recipients 
and certain other limited groups of noncitizens as outlined in section 
II.C.2. of this proposed rule. To be conservative in our estimates, we 
are assuming 100 hours per State, but it is important to note that it 
may take each State less than 100 hours given the overlap in State 
eligibility and verification systems, as work completed for the 
Medicaid or State Exchange system may be the same for its BHP.
---------------------------------------------------------------------------

    \59\ Minnesota's program began January 1, 2015, and New York's 
program began April 1, 2015. For more information, see https://www.medicaid.gov/basic-health-program/index.html.
---------------------------------------------------------------------------

    Of those 100 hours, we estimate it would take a database and 
network administrator and architect 25 hours at $98.50 per hour and a 
computer programmer 75 hours at $92.92 per hour. In the aggregate, we 
estimate a one-time burden of 200 hours (2 States x 100 hours) at a 
cost of $18,863 (2 States x [(25 hours x $98.50 per hour) + (75 hours x 
$92.92 per hour)]) for completing the necessary updates to a BHP 
application.
    These proposed requirements, if finalized, would impose additional 
costs on States to process the applications for individuals impacted by 
the proposals in this rule. Those impacts are accounted for under OMB 
control number 0938-1191 (Data Collection to Support Eligibility 
Determinations for Insurance Affordability Programs and Enrollment 
through Health Insurance Marketplaces, Medicaid and Children's Health 
Insurance Program Agencies (CMS-10440)), discussed in section IV.C.3. 
of this proposed rule, which pertains to the streamlined application.
3. ICRs Regarding the Exchanges and Processing Streamlined Applications 
(45 CFR 152.2 and 155.20, 42 CFR 600.5, and 42 CFR 435.4 and 
457.320(c))
    The following proposed changes will be submitted to OMB for review 
under control number 0938-1191 (CMS-10440).
    As discussed previously, the changes proposed to the definition of 
``lawfully present'' would impact eligibility to enroll in a QHP 
through an Exchange and for APTC and CSRs. This proposal would impact 
the 18 State Exchanges that run their own eligibility and enrollment 
platforms, as well as the Federal Government which would make changes 
to the Federal eligibility and enrollment platform for the States with 
Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the 
Federal platform (SBE-FPs). We estimate that it would take the Federal 
Government and each of the State Exchanges 100 hours in 2023 to develop 
and code the changes to their eligibility systems to correctly evaluate 
and verify eligibility under the definition of ``lawfully present'' 
revised to include DACA recipients and certain other limited groups of 
noncitizens as outlined in section II.C.2. of this proposed rule.
    Of those 100 hours, we estimate it would take a database and 
network administrator and architect 25 hours at $98.50 per hour and a 
computer programmer 75 hours at $92.92 per hour. In aggregate for the 
States, we estimate a one-time burden in 2023 of 1,800 hours (18 State 
Exchanges x 100 hours) at a cost of $169,767 (18 States x [(25 hours x 
$98.50 per hour) + (75 hours x $92.92 per hour)]) for completing the 
necessary updates to State Exchange systems. For the Federal 
Government, we estimate a one-time burden in 2023 of 100 hours at a 
cost of $9,432 ((25 hours x $98.50 per hour) + (75 hours x $92.92 per 
hour)). In total, the burden associated with all system updates would 
be 1,900 hours at a cost of $179,199.
    ``Data Collection to Support Eligibility Determinations for 
Insurance Affordability Programs and Enrollment through Health Benefits 
Exchanges, Medicaid and CHIP Agencies,'' OMB control number 0938-1191 
(CMS-10440) accounts for burdens associated with the streamlined 
application for enrollment in the programs impacted by this rule. As 
such, the following information collection addresses the burden of 
processing applications and assisting enrollees with Medicaid, CHIP, 
BHP, and QHP enrollment, and those impacts are not reflected in the 
ICRs for Medicaid and CHIP, and BHP, discussed in sections IV.C.1. and 
IV.C.2. of this proposed rule, respectively.
    With respect to assisting additional eligible enrollees and 
processing their applications, we estimate this would take a government 
programs eligibility interviewer 10 minutes (0.17 hours) per 
application at a rate of $46.70 per hour, for a cost of approximately 
$7.94 per application. As discussed further in section IV.C.4. of this 
proposed rule, we anticipate that approximately 200,000 individuals 
impacted by the proposals in this rule would complete the application 
annually. Therefore, the total application processing burden associated 
with the proposals in this rule would be 34,000 hours (0.17 hours x 
200,000 applications) for a total cost of $1,587,800 (34,000 hours x 
$46.70 per hour). As discussed further in this section, we anticipate 
that approximately 54 percent of the application processing burden 
would fall on States, while the remaining approximately 46 percent 
would be borne by the Federal Government. We estimate these proportions 
as follows and seek comment on these estimates and the methodology and 
assumptions used to calculate them.
    To start, we estimate the percentage of applications that would be 
processed for each of the programs: Medicaid, CHIP, Exchange, and BHP. 
We assume that the proportion of applications that would be processed 
for each program would be equivalent to the proportion of individuals 
impacted by the proposals in this rule that would enroll in each 
program. As discussed in section VI.C. of this proposed rule, we 
estimate that of the 129,000 individuals impacted by the proposals in 
this rule, 13,000 would enroll in Medicaid or CHIP (10 percent), 
112,000 in the Exchanges (87 percent), and 4,000 (3 percent) in the 
BHPs on average each year, including redeterminations and re-
enrollments. Using these same proportions, out of the 200,000 
applications anticipated to

[[Page 25325]]

result from the proposals in this rule, if finalized, we estimate 
20,000 applications would be processed for Medicaid and CHIP, 174,000 
would be processed for the Exchanges, and 6,000 would be processed for 
the BHPs on average each year.
    Next, we calculate the proportion of each program's application 
processing costs that are borne by States compared to the Federal 
Government. As discussed in section IV.B. of this proposed rule, the 
Federal Government contributes 50 percent of Medicaid and CHIP program 
administration costs. As such, we assume 50 percent of the Medicaid and 
CHIP application processing costs would fall on the 39 States 
referenced in section IV.C.1. of this proposed rule, and the remaining 
50 percent would be borne by the Federal Government. As discussed in 
section IV.C.2. of this proposed rule, the entire information 
collection burden associated with changes to BHPs falls on the two 
States with BHPs--Minnesota and New York. As such, we assume 100 
percent of the BHP application processing costs would fall on these two 
States. For the Exchanges, we used data from the 2022 Open Enrollment 
Period to estimate the proportion of applications that are processed by 
States compared to the Federal Government, and we determined that 47 
percent of Exchange applications were submitted to FFEs/SBE-FPs, and 
are therefore processed by the Federal Government, while 53 percent 
were submitted to and processed by the 18 State Exchanges using their 
own eligibility and enrollment platforms.\60\ As such, we anticipate 
that 47 percent of Exchange application processing costs would fall on 
the Federal Government and 53 percent of Exchange application 
processing costs would fall on States.
---------------------------------------------------------------------------

    \60\ Centers for Medicare & Medicaid Services. (2022). 2022 Open 
Enrollment Report. https://www.cms.gov/files/document/health-insurance-exchanges-2022-open-enrollment-report-final.pdf.
---------------------------------------------------------------------------

    Finally, we apply the proportion of applications we estimated for 
each program we discussed earlier to the State and Federal burden 
proportions. For Medicaid and CHIP, we estimate there would be 20,000 
applications processed. Using the per-application processing burden 
discussed earlier in this ICR (10 minutes, or 0.17 hours, per 
application at a rate of $46.70 per hour), and applying the 50 percent 
Federal contribution to Medicaid and CHIP program administration costs, 
this results in a burden of 1,700 hours, or $79,390, each for States 
and the Federal Government to process Medicaid and CHIP applications. 
For the BHPs, if we estimate 6,000 applications would be processed, the 
burden for all of those would be borne by the States. Using the per-
application processing burden of 10 minutes (0.17 hours) per 
application at a rate of $46.70 per hour, this results in a burden of 
1,020 hours, or $47,634, for States to process BHP applications. For 
the Exchanges, if we estimate 174,000 applications would be processed, 
53 percent of those (92,220) would be processed by State Exchanges and 
47 percent (81,780) would be processed by the Federal Government. Using 
the per-application processing burden of 10 minutes (0.17 hours) per 
application at a rate of $46.70 per hour, this results in a burden of 
15,677 hours, or $732,135, for State Exchanges and 13,903 hours, or 
$649,251, for the Federal Government.
    Therefore, the total burden on States to assist eligible 
beneficiaries and process their applications would be 18,397 hours 
annually (1,700 hours for Medicaid and CHIP + 1,020 hours for BHP + 
15,677 hours for Exchanges) at a cost of $859,140, and the total burden 
on the Federal Government would be 15,603 hours annually (1,700 hours 
for Medicaid and CHIP + 13,903 hours for Exchanges) at a cost of 
$728,660. We seek comment on these estimates and the methodology and 
assumptions used to calculate them.
4. ICRs Regarding the Application Process for Applicants
    The following proposed changes will be submitted to OMB for review 
under control number 0938-1191 (CMS-10440).
    As required by the ACA, there is one application through which 
individuals may apply for health coverage in a QHP through an Exchange 
and for other insurance affordability programs like Medicaid, CHIP, and 
a BHP.\61\ Some individuals may apply directly with their State 
Medicaid or CHIP agency; however, we assume the burden of completing an 
Exchange application is essentially the same as applying with a State 
Medicaid or CHIP agency, and therefore are not distinguishing these 
populations. We seek comment on this assumption.
---------------------------------------------------------------------------

    \61\ 42 U.S.C. 18083.
---------------------------------------------------------------------------

    Based on the enrollment projections discussed in the Regulatory 
Impact Analysis section later in this rule, we anticipate that DACA 
recipients would represent the majority of individuals impacted by the 
proposals in this rule, and we are unable to quantify the number of 
non-DACA recipients impacted by the other changes in this rule, but we 
expect the number to be small. We estimate that there are 200,000 
uninsured DACA recipients based on USCIS data on active DACA recipients 
(589,000 in 2022) \62\ and a 2021 survey by the National Immigration 
Law Center stating that 34 percent of DACA recipients are 
uninsured,\63\ and as such, we anticipate that approximately 200,000 
individuals impacted by the proposals in this rule would complete the 
application annually.
---------------------------------------------------------------------------

    \62\ Count of Active DACA Recipients by Month of Current DACA 
Expiration as of September 30, 2022. U.S. Citizenship and 
Immigration Services. https://www.uscis.gov/sites/default/files/document/data/Active_DACA_Recipients_Sept_FY22_qtr4.pdf.
    \63\ Tracking DACA Recipients' Access to Health Care, National 
Immigration Law Center, 2022. https://www.nilc.org/wp-content/uploads/2022/06/NILC_DACA-Report_060122.pdf.
---------------------------------------------------------------------------

    In the existing information collection request for this application 
(OMB control number 0938-1191), we estimate that the application 
process would take an average of 30 minutes (0.5 hours) to complete for 
those applying for insurance affordability programs and 15 minutes 
(0.25 hours) for those applying without consideration for insurance 
affordability programs.\64\ We estimate that of the 200,000 individuals 
impacted by the proposed changes, 98 percent would be applying for 
insurance affordability programs and 2 percent would be applying 
without consideration for insurance affordability programs. Using the 
hourly value of time for changes in time use for unpaid activities 
discussed in section IV.A. of this proposed rule (at an hourly rate of 
$20.71), the average opportunity cost to an individual for completing 
this task is estimated to be approximately 0.495 hours ((0.5 hours x 98 
percent) + (0.25 hours x 2 percent)) at a cost of $10.25. The total 
annual additional burden on the 200,000 individuals impacted by the 
proposed changes would be approximately 99,000 hours with an equivalent 
cost of approximately $2,050,290.
---------------------------------------------------------------------------

    \64\ It is possible that some individuals impacted by the 
proposed changes to the definition of lawful presence in this rule 
would apply using the paper application, but internal CMS data show 
that this would be less than 1 percent of applications. Therefore, 
we are using estimates in this RIA to reflect that nearly all 
applicants would apply using the electronic application.
---------------------------------------------------------------------------

    As stated earlier in this proposed rule, CMS, State Exchanges, and 
States would require individuals completing the application to submit 
supporting documentation to confirm their lawful presence if it is 
unable to be verified electronically. An applicant's lawful presence 
may not be able to be verified if, for example, the applicant opts to 
not include information about their immigration documentation such as 
their alien number or employment

[[Page 25326]]

authorization document (EAD) number when they fill out the application. 
We estimate that of the 200,000 individuals impacted by the changes 
proposed in this rule, approximately 68 percent (or 136,000) of 
applicants would be able to have their lawful presence electronically 
verified, and the remaining 32 percent (or 64,000) of applicants would 
be unable to have their lawful presence electronically verified and 
would therefore have to submit supporting documentation to confirm 
their lawful presence.\65\ We estimate that a consumer would, on 
average, spend approximately 1 hour gathering and submitting required 
documentation. Using the hourly value of time for changes in time use 
for unpaid activities discussed in section IV.A. of this proposed rule 
(at an hourly rate of $20.71), the opportunity cost for an individual 
to complete this task is estimated to be approximately $20.71. The 
total annual additional burden on the 64,000 individuals impacted by 
the changes proposed in this rule that are unable to electronically 
verify their lawful presence and therefore need to submit supporting 
documentation would be approximately 64,000 hours with an equivalent 
cost of approximately $1,325,440. We seek comment on these estimates.
---------------------------------------------------------------------------

    \65\ This estimate is informed by recent data from the FFEs and 
SBE-FPs. While certain changes proposed in this rule may result in 
an increase in the proportion of applicants who are able to have 
their lawful presence electronically verified, we do not have a 
reliable way to quantify any potential increase.
---------------------------------------------------------------------------

    As previously stated, for the 200,000 individuals impacted by this 
rule, the annual additional burden of completing the application would 
be 0.495 hours per individual on average, which totals to 99,000 hours 
at a cost of $2,050,290. For the 64,000 individuals who are unable to 
have their lawful presence electronically verified, the total annual 
burden of submitting documentation to verify their lawful presence 
would be 64,000 hours at a cost of $1,325,440. Therefore, the average 
annual burden per respondent would be 0.815 hours ((0.495 hours x 68 
percent of individuals) + (1.495 hours x 32 percent of individuals)), 
and the total annual burden on all of these individuals impacted by the 
proposed changes in this rule would be 163,000 hours at a cost of 
$3,375,730. We seek comment on these burden estimates.

D. Burden Estimate Summary

                                                                          Table 2--Summary of Proposed Burden Estimates
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         Time per                 Hourly       Total                    Total
      Regulation section(s)/ICR provision            OMB control No./CMS-ID          Year       Number of    Number of   response   Total time  labor rate  labor cost     State     beneficiary
                                                                                               respondents   responses     (hrs)       (hr)       ($/hr)        ($)      share ($)    cost ($)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
42 CFR 435.4 and 457.320(c) Medicaid and CHIP   0938-1147 (CMS-10410)...........        2023            39          39         100       3,900      Varies    $367,828    $183,914           N/A
 System Changes.
42 CFR 600.5 BHP System Changes...............  0938-1218 (CMS-10510)...........        2023             2           2         100         200      Varies      18,863      18,863           N/A
45 CFR 152.2 and 155.20 Exchange System         0938-1191 (CMS-10440)...........        2023            19          19         100       1,900      Varies     179,199     169,776           N/A
 Changes.
42 CFR 435.4 and 457.320(c), 42 CFR 600.5, 45   0938-1191 (CMS-10440)...........   2024-2027       200,000     200,000        0.17      34,000       46.70   1,587,800     859,140           N/A
 CFR 152.2 and 155.20 Streamlined Application
 Processing.
42 CFR 435.4 and 457.320(c), 42 CFR 600.5, 45   0938-1191 (CMS-10440)...........   2024-2027       200,000     200,000        0.82     163,000       20.71   3,375,730         N/A     3,375,730
 CFR 152.2 and 155.20 Application Process for
 Applicants.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

E. Submission of PRA-Related Comments

    We have submitted a copy of this proposed rule to OMB for its 
review of the rule's information collection requirements. The 
requirements are not effective until they have been approved by OMB.
    To obtain copies of the supporting statement and any related forms 
for the proposed collections discussed in this section, please visit 
the CMS website at www.cms.hhs.gov/PaperworkReductionActof1995, or call 
the Reports Clearance Office at 410-786-1326.
    We invite public comments on these potential information collection 
requirements. If you wish to comment, please submit your comments 
electronically as specified in the DATES and ADDRESSES section of this 
proposed rule and identify the rule (CMS-9894-P), the ICR's CFR 
citation, and OMB control number.

V. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

VI. Regulatory Impact Analysis

A. Statement of Need

    This proposed rule would update the definition of ``lawfully 
present'' in our regulations. This definition is currently used to 
determine whether a consumer is eligible to enroll in a QHP through an 
Exchange and for APTC and CSRs, and whether a consumer is eligible to 
enroll in a BHP in States that elect to operate a BHP. We are also 
proposing a similar definition of ``lawfully present'' that would be 
applicable to eligibility for Medicaid and CHIP in States that have 
elected to cover ``lawfully residing'' pregnant individuals and 
children under the CHIPRA 214 option. In addition, we propose to remove 
the

[[Page 25327]]

exception for DACA recipients from the definitions of ``lawfully 
present'' used to determine eligibility to enroll in a QHP through an 
Exchange, a BHP, or in Medicaid and CHIP under the CHIPRA 214 option, 
and instead treat DACA recipients the same as other deferred action 
recipients. We also propose some modifications to the ``lawfully 
present'' definition currently at 45 CFR 152.2, and the definition in 
the SHO letters that incorporate additional detail, clarifications, and 
some technical modifications for the Exchanges, BHPs, and Medicaid and 
CHIP under the CHIPRA 214 option.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the 
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), 
and Executive Order 13132 on Federalism (August 4, 1999).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule that may: (1) 
have an annual effect on the economy of $200 million or more (adjusted 
every 3 years by the Administrator of OMB's Office of Information and 
Regulatory Affairs (OIRA) for changes in gross domestic product), or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, territorial or tribal governments or 
communities; (2) create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) materially alter 
the budgetary impacts of entitlement, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
raise legal or policy issues for which centralized review would 
meaningfully further the President's priorities or the principles set 
forth in the Executive order, as specifically authorized in a timely 
manner by the Administrator of OIRA.
    Based on our estimates, OIRA has determined that this rulemaking is 
a significant regulatory action under section 3(f)(1) Executive Order 
12866. Accordingly, we have prepared regulatory impact analysis (RIA) 
that to the best of our ability presents the costs and benefits of the 
rulemaking. Therefore, OMB has reviewed these proposed regulations, and 
we have provided the following assessment of their impact.

C. Detailed Economic Analysis

    We prepared the economic impact estimates utilizing a baseline of 
``no action,'' comparing the effect of the proposals against not 
proposing the rule at all.
    This analysis reviews the amendments proposed under 42 CFR 435.4, 
457.320(c), and 600.5, and 45 CFR 152.2 and 155.20, which would add the 
following changes to the definition of lawfully present by adding the 
following new categories of noncitizens to this definition via this 
regulation:
     Those granted an EAD under 8 CFR 274a.12(c)(35) and (36);
     Those granted deferred action under DACA;
     Additional Family Unity beneficiaries;
     Individuals with a pending application for adjustment of 
status, without regard to whether they have an approved visa petition;
     Children under 14 with a pending application for asylum, 
withholding of removal, or relief under the Convention Against Torture 
or children under 14 who are listed as a dependent on a parent's 
pending application, without regard to the length of time that the 
application has been pending; and
     Children with an approved petition for SIJ classification.
    The amendments proposed under 42 CFR 435.4, 457.320(c), and 600.5 
and 45 CFR 152.2 and 155.20 would also:
     Revise the description of noncitizens who are 
nonimmigrants to include all nonimmigrants who have a valid and 
unexpired status;
     Remove individuals with a pending application for asylum, 
withholding of removal, or the Convention Against Torture who are over 
age 14 from the definition, as these individuals are covered elsewhere; 
and
     Simplify the definition of noncitizens with an EAD to 
include all individuals granted an EAD under 8 CFR 274a.12(c), as these 
individuals are already covered elsewhere, with the exception of a 
modest expansion to those granted an EAD under 8 CFR 274a.12(c)(35) and 
(36), discussed earlier in this proposed rule.
    In these respects, these proposals are technical changes or 
revisions to simplify verification processes, and therefore, we do not 
anticipate a material impact on individuals' eligibility as a result of 
these changes. We seek comment on estimates or data sources we could 
use to provide quantitative estimates for the benefit to these 
individuals.
    The amendments proposed under 42 CFR 435.4 and 457.320(c) would 
also revise the description of lawfully present individuals in the CNMI 
in this definition. This proposed amendment is also a technical change, 
and although we anticipate the number of individuals who would be 
substantively impacted by this proposal would be small, we do not have 
a reliable way to quantify these impacts. We seek comment on estimates 
or data sources we could use to provide quantitative estimates for the 
benefit to these individuals.
    As explained further in this section, we estimate 129,000 DACA 
recipients could enroll in health coverage and benefit from the 
proposals in this rule.\66\ We are presently unable to quantify the 
number of additional Family Unity beneficiaries, individuals with a 
pending application for adjustment of status, children under age 14 
with a pending application for asylum or related protection or children 
listed as dependents on a parent's application for asylum or related 
protection, and individuals with approved petition for SIJ 
classification that could enroll in health coverage and benefit from 
the proposals in this rule, but we expect this number to be small. We 
seek comment on estimates or data sources we could use to provide 
quantitative estimates for the benefit to these individuals.
---------------------------------------------------------------------------

    \66\ The estimates in this RIA are based on DHS's current policy 
in alignment with the ruling in Texas v. United States, 50 F.4th 498 
(5th Cir. 2022), whereby DHS continues to accept the filing of both 
initial and renewal DACA applications, but is only processing 
renewal requests.
---------------------------------------------------------------------------

    The proposed changes to 42 CFR 435.4 and 457.320(c) would no longer 
exclude DACA recipients from the definition of ``lawfully present'' 
used to determine eligibility for Medicaid and CHIP under section 214 
of CHIPRA and treat DACA recipients the same as other recipients of 
deferred action. Thus, under the proposed rule, DACA recipients who are 
children under 21 years of age (under age 19 for CHIP) or pregnant, 
including during the

[[Page 25328]]

postpartum period,\67\ would be eligible for Medicaid and CHIP benefits 
in States that have elected the option in their State plan to cover all 
lawfully residing children or pregnant individuals under the CHIPRA 214 
option. The proposed changes to 42 CFR 600.5 would no longer exclude 
DACA recipients from the definition of ``lawfully present'' used to 
determine eligibility for a BHP in those States that elect to operate 
the program, if otherwise eligible. The proposed changes to 45 CFR 
152.2 and 155.20 would make DACA recipients eligible to enroll in a QHP 
through an Exchange, and for APTC and CSRs, if otherwise eligible. We 
present enrollment estimates for these populations in Table 3.
---------------------------------------------------------------------------

    \67\ The postpartum period for pregnant individuals includes the 
60-day period described in sections 1903(v)(4)(A)(i) and 
2107(e)(1)(O) of the Act or the extended 12-month period described 
in sections 1902(e)(16) and 2107(e)(1)(J) of the Act in States that 
have elected that option.

                       Table 3--Enrollment Estimates by Program, Coverage Years 2024-2028
----------------------------------------------------------------------------------------------------------------
                                       2024            2025            2026            2027            2028
----------------------------------------------------------------------------------------------------------------
Medicaid and CHIP Enrollment....          13,000          11,000           9,000           8,000           6,000
BHP Enrollment..................           4,000           4,000           4,000           5,000           5,000
Exchange Enrollment.............         112,000         114,000         116,000         117,000         119,000
                                 -------------------------------------------------------------------------------
    Total Enrollment............         129,000         129,000         129,000         130,000         130,000
----------------------------------------------------------------------------------------------------------------

    To estimate the enrollment impact on Medicaid, we developed 
estimates for the number of pregnant individuals and children who would 
be eligible in this group. For pregnant individuals, we estimated the 
number of pregnancies using the DACA population by age and gender and 
combined this with the fertility rates by age in the United States.\68\ 
For the DACA population, we estimated 43 pregnant individuals per 1,000 
persons in 2022, declining to 34 pregnant individuals per 1,000 persons 
in 2028 as the DACA population ages. We then calculated how many 
persons would be eligible in States that have elected the CHIPRA 214 
option to cover pregnant individuals (28 States and territories, 
including the District of Columbia).\69\ Finally, we assumed that 50 
percent of all such persons would be eligible on the basis of income. 
We estimated about 7,000 pregnant individuals would enroll in 2024, 
declining to about 6,000 by 2028. For children, we estimated the number 
of individuals who would be eligible in States that elect the CHIPRA 
214 option for children (34 States plus the District of Columbia) and 
by age, as States may allow for eligibility up to age 19 or up to age 
21. We assumed 40 percent of these children would be eligible on the 
basis of income. We estimated about 6,000 children would enroll in 
2024, declining to 0 by 2028 as all DACA individuals age out of 
eligibility.\70\
---------------------------------------------------------------------------

    \68\ National Vital Statistics Report, CDC, January 31, 2023. 
https://www.cdc.gov/nchs/products/nvsr.htm.
    \69\ The States and territories that have elected the CHIPRA 214 
option to cover pregnant women are: American Samoa, Arkansas, 
California, the CNMI, Colorado, Connecticut, Delaware, the District 
of Columbia, Hawaii, Maine, Maryland, Massachusetts, Minnesota, 
Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, 
Pennsylvania, South Carolina, U.S. Virgin Islands, Vermont, 
Virginia, Washington, West Virginia, Wisconsin, and Wyoming. See 
https://www.medicaid.gov/medicaid/enrollment-strategies/medicaid-and-chip-coverage-lawfully-residing-children-pregnant-women.
    \70\ These estimates are based on DHS's current policy in 
alignment with the ruling in Texas v. United States, 50 F.4th 498 
(5th Cir. 2022), whereby DHS continues to accept the filing of both 
initial and renewal DACA applications, but is only processing 
renewal requests.
---------------------------------------------------------------------------

    To estimate the enrollment impact on the Exchanges and BHPs, we 
started with an estimate of the DACA population. USCIS has estimated 
this count to be 589,000 persons as of September 30, 2022, the most 
recent available data.\71\ Based on a 2021 survey from the National 
Immigration Law Center,\72\ roughly 34 percent of DACA recipients were 
uninsured. Of the roughly 200,000 uninsured DACA recipients, we removed 
the pregnant women and children estimated to enroll in Medicaid, as 
discussed in the preceding paragraph. In addition, we assumed that 
approximately 10 percent of these individuals would be ineligible for 
APTC and CSRs and that approximately 70 percent of the remaining group 
would opt to enroll in the Exchanges and BHP. This results in an 
enrollment impact of about 116,000 persons for both the Exchanges and 
BHP. Based on data regarding the number of DACA recipients by State, we 
estimated that 4,000 people would enroll in the BHPs in Minnesota and 
New York, and the remaining 112,000 would enroll in the Exchanges. We 
also estimated that the 6,000 children who would age out of Medicaid or 
CHIP eligibility by 2028 would subsequently enroll in the Exchanges and 
the BHPs in Minnesota and New York. We seek comment on these estimates 
and the assumptions and methodology used to calculate them.
---------------------------------------------------------------------------

    \71\ Count of Active DACA Recipients by Month of Current DACA 
Expiration as of September 30, 2022. U.S. Citizenship and 
Immigration Services. https://www.uscis.gov/sites/default/files/document/data/Active_DACA_Recipients_Sept_FY22_qtr4.pdf.
    \72\ Tracking DACA Recipients' Access to Health Care, National 
Immigration Law Center, 2022. https://www.nilc.org/wp-content/uploads/2022/06/NILC_DACA-Report_060122.pdf.
---------------------------------------------------------------------------

    The proposed changes to 42 CFR 600.5 would no longer exclude DACA 
recipients from the definition of lawfully present used to determine 
eligibility for a BHP in those States that elect to operate the 
program, if otherwise eligible. There may be an effect on the BHP risk 
pool as a result of this change, as DACA recipients are relatively 
younger and healthier than the general population, based on USCIS data 
showing an average age of 29 years.\73\ We seek comment on any 
estimates or data sources we could use to provide quantitative 
estimates for the associated effects, including benefit to these 
individuals.
---------------------------------------------------------------------------

    \73\ USCIS. Count of Active DACA Recipients by Month of Current 
DACA Expiration as of September 30, 2022. https://www.uscis.gov/sites/default/files/document/data/Active_DACA_Recipients_Sept_FY22_qtr4.pdf.
---------------------------------------------------------------------------

    The proposed changes to 45 CFR 152.2 and 155.20 would make DACA 
recipients eligible to enroll in a QHP through an Exchange, and for 
APTC and CSRs, if otherwise eligible. Similar to BHP eligibility, there 
may be a slight effect on the States' individual market risk pool. In 
addition, the proposals to modify the definition of ``lawfully 
present'' discussed in section II.C.2. of this proposed rule would 
reduce burden on Exchanges, BHPs, and State Medicaid and CHIP agencies 
by allowing the agencies to more frequently verify an individual's 
status with a trusted data source and to not have to request additional 
information from consumers. This change would promote simplicity and 
consistency in program administration, and further program

[[Page 25329]]

integrity resulting from the increased reliance on a trusted Federal 
data source. We seek comment on estimates or data sources we could use 
to provide quantitative estimates for this benefit.
    In addition, increased access to health coverage for DACA 
recipients and other noncitizens impacted by the proposals in this rule 
would advance racial justice and health equity, which in turn may 
decrease costs for emergency medical expenditures. Further, the 
proposals in this rule would improve the health and well-being of many 
individuals that are currently without coverage, as having health 
insurance makes individuals healthier. Individuals without insurance 
are less likely to receive preventative or routine health screenings 
and may delay necessary medical care, incurring high costs and debts. 
In addition to the improvement of health outcomes, these individuals 
would be more productive and better able to contribute economically, as 
studies have found that workers with health insurance are estimated to 
miss 77 percent fewer workdays than uninsured workers.\74\
---------------------------------------------------------------------------

    \74\ Dizioli, Allan and Pinheiro, Roberto. (2016). Health 
Insurance as a Productive Factor. Labour Economics. https://doi.org/10.1016/j.labeco.2016.03.002.
---------------------------------------------------------------------------

    We seek comment on these effects and any other potential benefits 
that may result from the proposals in this rule.
1. Costs
    The proposed changes to 42 CFR 435.4 and 457.320(c) would treat 
DACA recipients the same as other recipients of deferred action, who 
are included in the definition of ``lawfully present'' used to 
determine eligibility for Medicaid and CHIP under section 214 of 
CHIPRA. We note that generally, CMS has received feedback from some 
States that cover lawfully present individuals under age 21 and 
pregnant individuals that such States are supportive of a change to 
include DACA recipients in the definition of lawfully present. The 
costs to States and the Federal Government as a result of information 
collection changes associated with this proposal, which include initial 
system changes costs to develop and update each State's eligibility 
systems and verification processes and application processing costs to 
assist individuals with processing their applications, are discussed in 
sections IV.C.1. and IV.C.3. of this proposed rule, and the costs to 
consumers as a result of increased information collections associated 
with this proposal, which include applying for Medicaid or CHIP and 
submitting additional information to verify their lawful presence, if 
necessary, are discussed in section IV.C.4. of this proposed rule. 
These proposals would also increase Federal and State expenditures for 
States that elect the CHIPRA 214 option due to costs associated with 
Medicaid and CHIP coverage for newly eligible beneficiaries.
    We discuss how we calculated our Medicaid and CHIP enrollment 
estimates earlier in this RIA. To calculate costs, we estimated the per 
enrollee costs in Medicaid for pregnant individuals and children based 
on the projections in the President's Fiscal Year (FY) 2024 Budget. For 
2024, we projected annual costs per enrollee would be about $15,700 for 
pregnant individuals and about $4,900 for children. These costs are 
projected to increase annually as the price and use of services 
increase. To calculate Federal versus State costs, we multiplied the 
total costs for each group by the FMAP for each State, with some minor 
adjustments to account for differences in FMAP for certain services.
    Our estimates for Medicaid and CHIP expenditures as a result of the 
proposals in this rule, if finalized, are shown in Table 4. We seek 
comment on these estimates and the assumptions and methodology used to 
calculate them.

                           Table 4--Medicaid/CHIP Projected Expenditures, FY 2024-2028
----------------------------------------------------------------------------------------------------------------
                                       2024            2025            2026            2027            2028
----------------------------------------------------------------------------------------------------------------
State Expenditures..............     $40,000,000     $45,000,000     $50,000,000     $45,000,000     $40,000,000
Federal Expenditures............      60,000,000      85,000,000      80,000,000      80,000,000      75,000,000
                                 -------------------------------------------------------------------------------
    Total Expenditures..........     100,000,000     130,000,000     130,000,000     125,000,000     115,000,000
----------------------------------------------------------------------------------------------------------------

    States that are currently using only State funds to provide health 
benefits to DACA recipients are likely to see decreases in State 
expenditures due to this change, as Federal dollars would be available 
to help cover this population for the first time.\75\
---------------------------------------------------------------------------

    \75\ As of December 2022, those States are California, the 
District of Columbia, Illinois, Maine, Massachusetts, New York, 
Oregon, Rhode Island, Vermont, and Washington. ``Health Coverage and 
Care of Immigrants,'' Kaiser Family Foundation, https://www.kff.org/racial-equity-and-health-policy/fact-sheet/health-coverage-and-care-of-immigrants/. Accessed March 2, 2023.
---------------------------------------------------------------------------

    The proposed changes to 42 CFR 600.5 would treat DACA recipients 
the same as other recipients of deferred action, who are lawfully 
present under the definition used to determine eligibility for BHP, if 
otherwise eligible. The costs to States as a result of information 
collection changes associated with this proposal, which include initial 
system changes costs to develop and update each State's eligibility 
systems and verification processes and application processing costs to 
assist individuals with processing their applications, are discussed in 
sections IV.C.2. and IV.C.3. of this proposed rule, and the costs to 
consumers as a result of increased information collections associated 
with this proposal, which include applying for BHP and submitting 
additional information to verify their lawful presence, if necessary, 
are discussed in section IV.C.4. of this proposed rule. States 
operating a BHP may choose to provide additional outreach to the newly 
eligible. With a potential increase in number of enrollees, there may 
be an increase in Federal payments to a State's BHP trust fund.
    We discuss how we calculated our BHP enrollment estimates earlier 
in this RIA. BHP funding from the Federal Government to State BHP trust 
funds is based on the amount of PTC enrollees would receive had they 
been enrolled in Exchange coverage. Therefore, to calculate costs, we 
used data from USCIS to determine the average age of a DACA recipient, 
which is 29, and we used PTC data to determine the average PTC for a 
29-year-old, which is estimated to be $289 per month, and multiplied 
this by 12 months per year and by the projected number of enrollees per 
year to arrive at annual costs. Our estimates for BHP expenditures as a 
result of the proposals in this rule, if finalized, are shown in Table 
5. We seek comment on these estimates and the assumptions and 
methodology used to calculate them.

[[Page 25330]]



                                                    Table 5--BHP Projected Expenditures, FY 2024-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           2024             2025             2026             2027             2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
Expenditures.......................................................     $15,000,000      $20,000,000      $15,000,000      $15,000,000      $15,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The proposed changes to 45 CFR 152.2 and 155.20 would make DACA 
recipients eligible to enroll in a QHP through an Exchange, and for PTC 
and CSRs, if otherwise eligible. The costs to State Exchanges and the 
Federal Government as a result of information collection changes, which 
include initial system changes costs to develop and update each State's 
eligibility systems and verification processes and application 
processing costs to assist individuals with processing their 
applications, are discussed in section IV.C.3. of this proposed rule 
and the costs to consumers as a result of increased information 
collections associated with this proposal, which include applying for 
Exchange coverage and submitting additional information to verify their 
lawful presence, if necessary, are discussed in section IV.C.4. of this 
proposed rule. This proposed change may result in slightly increased 
traffic during open enrollment for the 2024 coverage years and beyond. 
Further, there may be a potential administrative burden on States and 
regulated entities that choose to conduct outreach and education 
efforts to ensure that consumers, agents, brokers, and assisters are 
aware of the changes proposed in this rule associated with the updated 
definitions of ``lawfully present'' for the purposes of the Exchanges 
and BHP and ``lawfully residing'' for the purposes of Medicaid and CHIP 
under the CHIPRA 214 option. We anticipate that the costs of this 
additional outreach and education would be minimal and seek comment on 
that assumption.
    Whether the effects discussed above as ``costs'' are appropriately 
categorized depends on societal resource use. To the extent that 
resources (for example, labor and equipment associated with provision 
of medical care) are used differently in the presence of the proposed 
rule than in its absence, then the estimated effects are indeed costs. 
If resource use remains the same but different entities in society pay 
for them, then the estimated effects would instead be transfers. We 
request comment that would facilitate refinement of the effect 
categorization.
2. Transfers
    Transfers are payments between persons or groups that do not affect 
the total resources available to society. They are a benefit to 
recipients and a cost to payers. The proposals at 45 CFR 152.2 and 
155.20 would generate a transfer from the Federal Government to 
consumers in the form of increased PTC payments due to individuals who 
would be eligible for Exchange coverage and APTC, if the proposals in 
this rule are finalized.
    We discuss how we calculated our Exchange enrollment estimates 
earlier in this RIA. To calculate costs, we used data from USCIS to 
determine the average age of a DACA recipient, which is 29. For 2024, 
the average PTC for a 29-year-old is estimated to be $289 per month. We 
multiplied this by 12 months per FY and by the number of enrollees to 
arrive at annual costs.\76\ These costs are projected to increase using 
the trends assumed in the President's FY 2024 Budget.
---------------------------------------------------------------------------

    \76\ The estimate for FY 2024 only includes 9 months, assuming 
these individuals will enroll in a QHP and receive APTC beginning 
January 1, 2024. It is possible that individuals impacted by this 
rule could enroll in coverage effective December 1, 2023, and 
receive APTC beginning on that date, but we do not have a reliable 
way to estimate how many individuals would enroll with that coverage 
effective date.
---------------------------------------------------------------------------

    We present these estimates in Table 6 and seek comment on the 
estimates and the assumptions and methodology used to calculate them.

                                                 Table 6--Exchange Projected Expenditures, FY 2024-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         FY 2024          FY 2025          FY 2026          FY 2027          FY 2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
PTC Expenditures...................................................    $300,000,000     $390,000,000     $320,000,000     $310,000,000     $320,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Regulatory Review Cost Estimation
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
estimate the cost associated with regulatory review. There is 
uncertainty involved with accurately quantifying the number of entities 
that would review the rule. However, for the purposes of this proposed 
rule, we assume that medical and health service managers would review 
this rule. Therefore, at least one person from each of the three State 
Exchanges on the Federal platform would review for applicability, and 
at least three people from each of the 18 State Exchanges would review, 
for a total of 57 individuals for the Exchanges. For Medicaid, CHIP, 
and BHP, we assume at least one person from every State agency and 
territory would review for applicability; at least two additional 
people from the 35 States, the District of Columbia, and three 
territories that have elected the CHIPRA 214 option would review; and 
at least one person from the two States with BHPs would also review, 
for a total of 134 individuals for Medicaid, CHIP, and BHP. Combined 
with reviewers for the Exchanges, this results in an estimate of 191 
reviewers. We acknowledge that this assumption may understate or 
overstate the costs of reviewing this rule. We welcome any comments on 
the approach in estimating the number of entities which would review 
this proposed rule.
    Using the wage information from the Bureau of Labor Statistics for 
medical and health service managers (Code 11-9111), we estimate that 
the cost of reviewing this rule is $115.22 per hour, including overhead 
and fringe benefits (https://www.bls.gov/oes/current/oes_nat.htm). 
Assuming an average reading speed of 250 words per minute, we estimate 
that it would take approximately 1.4 hours for each individual to 
review the entire proposed rule (approximately 21,000 words/250 words 
per minute = 84 minutes). Therefore, we estimate that the total one-
time cost of reviewing this regulation is approximately $30,910 
([$115.22 x 1.4 hours per individual review] x 191 reviewers).

[[Page 25331]]

D. Regulatory Alternatives Considered

    With regard to the changes to CMS definitions of ``lawfully 
present'' proposed in this rule, we considered proposing to update the 
current regulatory definition at 45 CFR 152.2 that applies to Exchanges 
and BHPs, and separately updating our SHO guidance that applies to 
Medicaid and CHIP in States that elect the CHIPRA 214 option, instead 
of proposing to define a definition of lawfully present at 42 CFR 
435.4. While this approach would have had a similar impact to the 
changes proposed in this rule, we are of the view that the proposed 
definition of lawfully present that applies to Medicaid and CHIP 
eligibility in States that elect the CHIPRA 214 option promotes 
transparency by giving the public an opportunity to review and comment 
on these proposals. We are also of the view that this approach promotes 
transparency and lessens administrative burden by making key 
eligibility information more accessible to State Medicaid and CHIP 
agencies that are tasked with applying these definitions when 
determining consumers' eligibility for their programs. Finally, we 
believe that proposing a definition of ``lawfully present'' in 
regulation, rather than maintaining a definition in guidance, provides 
a greater degree of stability for the individual beneficiaries and 
State agencies that rely on this definition.
    In developing this rule, we also considered not proposing the 
technical and clarifying changes to CMS's definitions of ``lawfully 
present,'' discussed in section II.C.2. of this proposed rule, as these 
changes are expected to impact fewer individuals than the proposal to 
treat DACA recipients the same as other recipients of deferred action. 
However, in our comprehensive review of current CMS definitions of 
``lawfully present,'' we determined that the proposed changes discussed 
in section II.C.2. of this proposed rule would simplify our eligibility 
verification processes and increase efficiencies for individuals 
seeking health coverage and State and Federal entities administrating 
insurance affordability programs. Additionally, the small number of 
individuals included in the proposed eligibility categories would 
benefit from increased access to health coverage and insurance 
affordability programs.

E. Accounting Statement and Table

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), we have prepared an accounting statement in 
Table 7 showing the classification of the impact associated with the 
provisions of this proposed rule. We prepared these impact estimates 
utilizing a baseline of ``no action,'' comparing the effect of the 
proposals against not proposing the rule at all.
    This proposed rule proposes standards for programs that would have 
numerous effects, including allowing DACA recipients to be treated the 
same as other deferred action recipients for specific health insurance 
affordability programs, and increasing access to affordable health 
insurance coverage. The effects in Table 7 reflect qualitative 
assessment of impacts and estimated direct monetary costs and transfers 
resulting from the provisions of this proposed rule for the Federal 
Government, State Exchanges, BHPs, Medicaid and CHIP agencies, and 
consumers.

                                            Table 7--Accounting Table
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Benefits:
Qualitative:
     Additional enrollment in Medicaid and CHIP, anticipated to be 13,000 individuals in 2024, 11,000 in
     2025, 9,000 in 2026, 8,000 in 2027, and 6,000 in 2028 due to the proposals in this rule..
     Additional enrollment in the BHP, anticipated to be 4,000 individuals in 2024-2026 and 5,000
     individuals in 2027-2028..
     Additional enrollment in the Exchanges, which would be subsidized depending on individuals'
     household incomes, anticipated to be 112,000 in 2024, 114,0000 in 2025, 116,000 in 2026, 117,000 in 2027,
     and 119,000 in 2028..
     Increased access to health coverage for DACA recipients and certain other noncitizens, which would
     advance racial justice and health equity, which in turn may also decrease costs for emergency medical
     expenditures..
     Improved health and well-being of many DACA recipients and certain other noncitizens currently
     without health care coverage..
     Greater economic contribution and productivity of DACA recipients and certain other noncitizens
     from improving their health outcomes..
     Reduced burden on Exchanges, BHPs, and Medicaid and CHIP agencies to determine applicants'
     immigration statuses..
----------------------------------------------------------------------------------------------------------------
Costs:                              Estimate.............     Year dollar  Discount rate........          Period
                                                                                                         covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($/year).....  $109.68 Million......            2023  7 percent............       2023-2027
                                    $112.21 Million......            2023  3 percent............       2023-2027
----------------------------------------------------------------------------------------------------------------
Quantitative:
     Increased State Medicaid and CHIP expenditures of $40 million in 2024, $45 million in 2025, $50
     million in 2026, and $45 million in 2027 due to increased enrollment as a result of the proposed changes to
     the definition of ``lawfully residing'' for purposes of Medicaid and CHIP under the CHIPRA 214 option..
     Increased Federal Medicaid and CHIP expenditures of $60 million in 2024, $85 million in 2025, $80
     million in 2026, and $80 million in 2027 due to increased enrollment as a result of the proposed changes to
     the definition of ``lawfully residing'' for purposes of Medicaid and CHIP under the CHIPRA 214 option..
     Increased Federal BHP expenditures of $15 million in 2024, $20 million in 2025, $15 million in 2026
     and $15 million in 2027 due to increased enrollment as a result of proposed changes to the definition of
     ``lawfully present'' for purposes of a BHP..
     Initial system changes costs estimated at $183,914 for States and $183,915 for the Federal
     Government in 2023 to develop and code changes to each State's eligibility systems and verification
     processes to include the categories of noncitizens impacted by this proposed rule with respect to Medicaid
     and CHIP eligibility..
     System changes costs estimated at $18,863 in 2023 for States to develop and code changes to their
     eligibility systems and verification processes to include the categories of noncitizens impacted by this
     proposed rule with respect to BHP eligibility..
     System changes costs estimated at $169,767 for State Exchanges and $9,432 for the Federal
     Government in 2023 to develop and code changes to each Exchange's eligibility systems and verification
     processes to include the categories of noncitizens impacted by this proposed rule with respect to Exchange
     and Exchange-related subsidy eligibility..
     Application processing costs estimated at $859,140 for States and $728,660 for the Federal
     Government per year starting in 2024 to assist individuals impacted by this proposed rule with processing
     their applications..
----------------------------------------------------------------------------------------------------------------


[[Page 25332]]


                                      Table 7--Accounting Table--Continued
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
     Costs to individuals impacted by the proposals in this rule of $3,375,730 per year starting in 2024
     to apply for Medicaid, CHIP, BHP, or Exchange health coverage, including costs to submit additional
     information to verify their lawful presence status if it is unable to be verified electronically through
     the application..
----------------------------------------------------------------------------------------------------------------
Qualitative:
     Potential administrative burden on States and regulated entities that choose to conduct increased
     education and outreach related to the updated definitions of ``lawfully present'' for the purposes of the
     Exchanges and BHP and ``lawfully residing'' for the purposes of Medicaid and CHIP under the CHIPRA 214
     option..
----------------------------------------------------------------------------------------------------------------
Transfers:                          Estimate.............     Year dollar  Discount rate........          Period
                                                                                                         covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($/year).....  $255.00 Million......            2023  7 percent............       2023-2027
                                    $260.15 Million......            2023  3 percent............       2023-2027
----------------------------------------------------------------------------------------------------------------
Quantitative:
     Increased PTC expenditures from the Federal Government to individuals of $300 million in 2024, $390
     million in 2025, $320 million in 2026, and $310 million in 2027 due to increased enrollment and subsidy
     eligibility as a result of the proposed changes to the definition of ``lawfully present'' for purposes of
     the Exchanges..
----------------------------------------------------------------------------------------------------------------

F. Regulatory Flexibility Act (RFA)

    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, we estimate that 
small businesses, nonprofit organizations, and small governmental 
jurisdictions are small entities as that term is used in the RFA. The 
great majority of hospitals and most other health care providers and 
suppliers are small entities, either because they are nonprofit 
organizations or they meet the Small Business Administration (SBA) 
definition of a small business (having revenues of less than $8.0 
million to $41.5 million in any 1 year). Individuals and States are not 
included in the definition of a small entity.
    For purposes of the RFA, we believe that health insurance issuers 
and group health plans would be classified under the North American 
Industry Classification System (NAICS) code 524114 (Direct Health and 
Medical Insurance Carriers). According to SBA size standards, entities 
with average annual receipts of $47 million or less would be considered 
small entities for these NAICS codes. Issuers could possibly be 
classified in 621491 (HMO Medical Centers) and, if this is the case, 
the SBA size standard would be $44.5 million or less.\77\ We believe 
that few, if any, insurance companies underwriting comprehensive health 
insurance policies (in contrast, for example, to travel insurance 
policies or dental discount policies) fall below these size thresholds. 
Based on data from medical loss ratio (MLR) annual report submissions 
for the 2021 MLR reporting year, approximately 78 out of 480 issuers of 
health insurance coverage nationwide had total premium revenue of $44.5 
million or less.\78\ This estimate may overstate the actual number of 
small health insurance issuers that may be affected, since over 76 
percent of these small issuers belong to larger holding groups, and 
many, if not all, of these small companies are likely to have non-
health lines of business that will result in their revenues exceeding 
$44.5 million.
---------------------------------------------------------------------------

    \77\ https://www.sba.gov/document/support--table-size-standards.
    \78\ Available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
---------------------------------------------------------------------------

    In this proposed rule, we propose standards for eligibility for 
Exchange enrollment and APTC and CSRs, BHP, and Medicaid and CHIP under 
the CHIPRA 214 option. Because we believe that insurance firms offering 
comprehensive health insurance policies generally exceed the size 
thresholds for ``small entities'' established by the SBA, we do not 
believe that an initial regulatory flexibility analysis is required for 
such firms. Furthermore, the proposals related to Medicaid and CHIP 
would impact State governments, but as States do not constitute small 
entities under the statutory definition, an impact analysis for these 
provisions is not required under the RFA.
    As its measure of significant economic impact on a substantial 
number of small entities, HHS uses a change in revenue of more than 3 
to 5 percent. We do not believe that this threshold will be reached by 
the requirements in this proposed rule. Therefore, the Secretary has 
certified that this proposed rule will not have a significant economic 
impact on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a metropolitan 
statistical area and has fewer than 100 beds. While this rule is not 
subject to section 1102 of the Act, we have determined that this 
proposed rule would not adversely affect small rural hospitals. 
Therefore, the Secretary has certified that this proposed rule will not 
have a significant impact on the operations of a substantial number of 
small rural hospitals.

G. Unfunded Mandates Reform Act (UMRA)

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2023, that 
threshold is approximately $177 million. Based on information currently 
available, we expect the combined impact on State, local, or tribal 
governments and the private sector does not meet the UMRA definition of 
unfunded mandate.

H. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency

[[Page 25333]]

must meet when it promulgates a proposed rule (and subsequent final 
rule) that imposes substantial direct requirement costs on State and 
local governments, preempts State law, or otherwise has federalism 
implications.
    While developing this rule, we attempted to balance States' 
interests in running their own Exchanges, BHPs, and Medicaid and CHIP 
programs with CMS's interest in establishing a consistent definition of 
``lawfully present'' for use in eligibility determinations across CMS 
programs. We also attempted to balance States' interests with the 
overall goals of the ACA, as well as the goals of DHS's DACA policy and 
the provisions of the DHS DACA Final Rule. By doing so, we complied 
with the requirements of E.O. 13132.
    In our view, while the provisions of this proposed rule related to 
the Exchanges (45 CFR 152.2 and 155.20) and the BHP (42 CFR 600.5) 
would not impose substantial direct requirement costs on State and 
local governments, this regulation has federalism implications due to 
potential direct effects on the distribution of power and 
responsibilities among the State and Federal governments relating to 
determining standards related to eligibility for health insurance 
through Exchanges and BHPs. For example, State Exchanges and BHPs would 
be required to update their eligibility systems in order to accurately 
evaluate applicants' lawful presence, and State Exchanges and BHPs may 
wish to conduct outreach to groups such as DACA recipients who would 
newly be considered lawfully present under the rule. By our estimate, 
these requirements do not impose substantial direct costs on States. In 
addition, we anticipate that these federalism implications are 
mitigated because States have the option to operate their own Exchanges 
and the optional BHP. After establishment, Exchanges must be 
financially self-sustaining, with revenue sources at the discretion of 
the State. Current State Exchanges charge user fees to issuers. As 
indicated earlier, a BHP is optional for States. Therefore, if 
implemented in a State, it provides access to a pool of Federal funding 
that would not otherwise be available to the State. Accordingly, 
federalism implications are mitigated if not entirely eliminated as it 
pertains to a BHP.
    Additionally, the proposals in this rule related to Medicaid and 
CHIP may impose substantial direct costs on State governments. The 
Medicaid and CHIP policies also have federalism implications by 
creating a change in eligibility that may not align with a State's 
position. However, we believe this effect is mitigated because the 
eligibility change is under an option that States have the discretion 
to adopt and maintain. In addition, Medicaid and CHIP costs are shared 
between the Federal Government and States, further mitigating the 
impacts of compliance with these new requirements. As such, the costs 
to States by our estimate do not rise to the level of specified 
thresholds for significant burden to States.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on April 6, 2023.

List of Subjects

42 CFR Part 435

    Aid to Families with Dependent Children, Grant programs--health, 
Medicaid, Reporting and recordkeeping requirements, Supplemental 
Security Income (SSI), Wages.

42 CFR Part 457

    Administrative practice and procedure, Grant programs--health, 
Health insurance, Reporting and recordkeeping requirements.

42 CFR Part 600

    Administrative practice and procedure, Health care, health 
insurance, Intergovernmental relations, Penalties, Reporting and 
recordkeeping requirements.

45 CFR Part 152

    Administrative practice and procedure, Health care, Health 
insurance, Penalties, Reporting and recordkeeping requirements.

45 CFR Part 155

    Administrative practice and procedure, Advertising, Aged, Brokers, 
Citizenship and naturalization, Civil rights, Conflicts of interests, 
Consumer protection, Grant programs--health, Grants administration, 
Health care, Health insurance, Health maintenance organizations (HMO), 
Health records, Hospitals, Indians, Individuals with disabilities, 
Intergovernmental relations, Loan programs--health, Medicaid, 
Organization and functions (Government agencies), Public assistance 
programs, Reporting and recordkeeping requirements, Sex discrimination, 
State and local governments, Taxes, Technical assistance, Women, Youth.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth 
below.

Title 42--Public Health

PART 435--ELIGIBILITY IN THE STATES, DISTRICT OF COLUMBIA, THE 
NORTHERN MARIANA ISLANDS, AND AMERICAN SAMOA

0
1. The authority citation for part 435 continues to read as follows:

    Authority:  42 U.S.C. 1302.

0
2. Part 435 is amended by--
0
a. Removing all instances of the words ``non-citizen'' and ``non-
citizens'' and adding in their places the words ``noncitizen'' and 
``noncitizens'', respectively; and
0
b. Removing all instances of the word ``Non-citizen'' and adding in its 
place the word ``Noncitizen''; and
0
c. Removing all instances of the words ``Qualified Non-Citizen'' and 
adding in its place the words ``qualified noncitizen''.
0
3. Section 435.4 is amended by adding the definitions of ``Lawfully 
present'' and ``Lawfully residing'' in alphabetical order to read as 
follows:


Sec.  435.4  Definitions and use of terms.

* * * * *
    Lawfully present means a noncitizen who--
    (1) Is a qualified noncitizen;
    (2) Is in a valid nonimmigrant status, as defined in 8 U.S.C. 
1101(a)(15) or otherwise under the immigration laws (as defined in 8 
U.S.C. 1101(a)(17));
    (3) Is paroled into the United States in accordance with 8 U.S.C. 
1182(d)(5) for less than 1 year, except for a noncitizen paroled for 
prosecution, for deferred inspection or pending removal proceedings;
    (4) Is granted temporary resident status in accordance with 8 
U.S.C. 1160 or 1255a;
    (5) Is granted Temporary Protected Status (TPS) in accordance with 
8 U.S.C. 1254a;
    (6) Is granted employment authorization under 8 CFR 274a.12(c);
    (7) Is a Family Unity beneficiary in accordance with section 301 of 
Public Law 101-649 as amended; or section 1504 of the LIFE Act 
Amendments of 2000, title XV of H.R. 5666, enacted by reference in 
Public Law 106-554 (see section 1504 of App. D to Pub. L. 106-554);
    (8) Is covered by Deferred Enforced Departure (DED) in accordance 
with a decision made by the President;
    (9) Is granted deferred action, including, but not limited to 
individuals granted deferred action under 8 CFR 236.22;
    (10) Has a pending application for adjustment of status;
    (11)(i) Has a pending application for asylum under 8 U.S.C. 1158, 
for

[[Page 25334]]

withholding of removal under 8 U.S.C. 1231, or for relief under the 
Convention Against Torture; and
    (ii) Is under the age of 14;
    (12) Has been granted withholding of removal under the Convention 
Against Torture;
    (13) Has a pending or approved petition for Special Immigrant 
Juvenile classification as described in 8 U.S.C. 1101(a)(27)(J);
    (14) Is lawfully present in American Samoa under the immigration 
laws of American Samoa; or
    (15) Is a Commonwealth of the Northern Mariana Islands (CNMI) 
resident as described in 48 U.S.C. 1806(e)(6).
    Lawfully residing means an individual who is a noncitizen who is 
considered lawfully present under this section and satisfies the State 
residency requirements, consistent with Sec.  435.403.
* * * * *
0
4. Section 435.12 is added to read as follows:


Sec.  435.12  Severability.

    (a) Any part of the definitions of ``lawfully present'' and 
``lawfully residing'' in Sec.  435.4 held to be invalid or 
unenforceable, including as applied to any person or circumstance, 
shall be construed so as to continue to give the maximum effect to the 
provision as permitted by law, along with other provisions not found 
invalid or unenforceable, including as applied to persons not similarly 
situated or to dissimilar circumstances, unless such holding is that 
the provision of this subpart is invalid and unenforceable in all 
circumstances, in which event the provision shall be severable from the 
remainder of this subpart and shall not affect the remainder thereof.
    (b) The provisions in Sec.  435.4 with respect to the definitions 
of ``lawfully present'' and ``lawfully residing'' are intended to be 
severable from one another and from the definitions of ``lawfully 
present'' established at 42 CFR 600.5 and 45 CFR 155.20.

PART 457--ALLOTMENTS AND GRANTS TO STATES

0
5. The authority citation for part 457 continues to read as follows:

    Authority:  42 U.S.C. 1302.

0
6. Section 457.320 is amended by adding paragraph (c) to read as 
follows:


Sec.  457.320  Other eligibility standards.

* * * * *
    (c) Definitions. (1) Lawfully present has the meaning assigned at 
Sec.  435.4 of this chapter.
    (2) Lawfully residing has the meaning assigned at Sec.  435.4 of 
this chapter, except that State residency requirements must be 
consistent with paragraph (e) of this section.
* * * * *

PART 600--ADMINISTRATION, ELIGIBILITY, ESSENTIAL HEALTH BENEFITS, 
PERFORMANCE STANDARDS, SERVICE DELIVERY REQUIREMENTS, PREMIUM AND 
COST SHARING, ALLOTMENTS, AND RECONCILIATION

0
7. The authority citation for part 600 continues to read as follows:

    Authority:  Section 1331 of the Patient Protection and 
Affordable Care Act of 2010 (Pub. L. 111-148, 124 Stat. 119), as 
amended by the Health Care and Education Reconciliation Act of 2010 
(Pub. L. 111-152, 124 Stat 1029).

0
8. Section 600.5 is amended by revising the definition of ``Lawfully 
present'' to read as follows:


Sec.  600.5  Definitions and use of terms.

* * * * *
    Lawfully present has the meaning given in 45 CFR 155.20.
* * * * *
    For the reasons set forth in the preamble, under the authority at 5 
U.S.C. 301, the Department of Health and Human Services proposes to 
amend 45 CFR subtitle A, subchapter B, as set forth below.

Title 45--Public Welfare

PART 152--PRE-EXISTING CONDITION INSURANCE PLAN PROGRAM

0
9. The authority citation for part 152 continues to read as follows:

    Authority:  Sec. 1101 of the Patient Protection and Affordable 
Care Act (Pub. L. 111-148).

0
10. Section 152.2 is amended by revising the definition of ``Lawfully 
present'' to read as follows:


Sec.  152.2  Definitions.

* * * * *
    Lawfully present has the meaning given the term at 45 CFR 155.20.
* * * * *

PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED 
STANDARDS UNDER THE AFFORDABLE CARE ACT

0
11. The authority citation for part 155 continues to read as follows:

    Authority: 42 U.S.C. 18021-18024, 18031-18033, 18041-18042, 
18051, 18054, 18071, and 18081-18083.

0
12. Section 155.20 is amended by revising the definition of ``Lawfully 
present'' to read as follows:


Sec.  155.20  Definitions.

* * * * *
    Lawfully present means a noncitizen who--
    (1) Is a qualified noncitizen as defined at 42 CFR 435.4;
    (2) Is in a valid nonimmigrant status, as defined in 8 U.S.C. 
1101(a)(15) or otherwise under the immigration laws (as defined in 8 
U.S.C. 1101(a)(17));
    (3) Is paroled into the United States in accordance with 8 U.S.C. 
1182(d)(5) for less than 1 year, except for a noncitizen paroled for 
prosecution, for deferred inspection or pending removal proceedings;
    (4) Is granted temporary resident status in accordance with 8 
U.S.C. 1160 or 1255a;
    (5) Is granted Temporary Protected Status (TPS) in accordance with 
8 U.S.C. 1254a;
    (6) Is granted employment authorization under 8 CFR 274a.12(c);
    (7) Is a Family Unity beneficiary in accordance with section 301 of 
Public Law 101-649 as amended; or section 1504 of the LIFE Act 
Amendments of 2000, title XV of H.R. 5666, enacted by reference in 
Public Law 106-554 (see section 1504 of App. D to Pub. L. 106-554);
    (8) Is covered by Deferred Enforced Departure (DED) in accordance 
with a decision made by the President;
    (9) Is granted deferred action, including but not limited to 
individuals granted deferred action under 8 CFR 236.22;
    (10) Has a pending application for adjustment of status;
    (11)(i) Has a pending application for asylum under 8 U.S.C. 1158, 
for withholding of removal under 8 U.S.C. 1231, or for relief under the 
Convention Against Torture; and
    (ii) Is under the age of 14;
    (12) Has been granted withholding of removal under the Convention 
Against Torture; or (13) Has a pending or approved petition for Special 
Immigrant Juvenile classification as described in 8 U.S.C. 
1101(a)(27)(J).
* * * * *
0
13. Section 155.30 is added to read as follows:


Sec.  155.30  Severability.

    (a) Any part of the definition of ``lawfully present'' in Sec.  
155.20 held to be invalid or unenforceable, including as applied to any 
person or circumstance, shall be construed so as to continue to give 
the maximum effect to the provision as permitted by law,

[[Page 25335]]

along with other provisions not found invalid or unenforceable, 
including as applied to persons not similarly situated or to dissimilar 
circumstances, unless such holding is that the provision of this 
subpart is invalid and unenforceable in all circumstances, in which 
event the provision shall be severable from the remainder of this 
subpart and shall not affect the remainder thereof.
    (b) The provisions in Sec.  155.20 with respect to the definition 
of ``lawfully present'' are intended to be severable from one another 
and from the definitions of ``lawfully present'' and ``lawfully 
residing'' that are established or cross-referenced in 42 CFR 435.4 and 
457.320.

    Dated: April 19, 2023.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-08635 Filed 4-24-23; 4:15 pm]
BILLING CODE 4150-28-P