[Federal Register Volume 89, Number 90 (Wednesday, May 8, 2024)]
[Rules and Regulations]
[Pages 39392-39437]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-09661]



[[Page 39391]]

Vol. 89

Wednesday,

No. 90

May 8, 2024

Part VII





Department of Health and Human Services





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Centers for Medicare and Medicaid Services





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42 CFR Parts 435, et al.

45 CFR Parts 152 and 155





Clarifying the Eligibility of Deferred Action for Childhood Arrivals 
(DACA) Recipients and Certain Other Noncitizens for a Qualified Health 
Plan Through an Exchange, Advance Payments of the Premium Tax Credit, 
Cost-Sharing Reductions, and a Basic Health Program; Final Rule

  Federal Register / Vol. 89 , No. 90 / Wednesday, May 8, 2024 / Rules 
and Regulations  

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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-F]
RIN 0938-AV23


Clarifying the Eligibility of Deferred Action for Childhood 
Arrivals (DACA) Recipients and Certain Other Noncitizens for a 
Qualified Health Plan through an Exchange, Advance Payments of the 
Premium Tax Credit, Cost-Sharing Reductions, and a Basic Health Program

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

ACTION: Final rule.

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SUMMARY: This final rule makes several clarifications and updates 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 
Medicaid and Children's Health Insurance Programs (CHIPs). 
Specifically, Deferred Action for Childhood Arrivals (DACA) recipients 
and certain other noncitizens will be included in the definitions of 
``lawfully present'' that are used to determine eligibility to enroll 
in a QHP through an Exchange, for Advance Payments of the Premium Tax 
Credit (APTC) and Cost-Sharing Reductions (CSRs), or for a BHP.

DATES: These regulations are effective on November 1, 2024.

FOR FURTHER INFORMATION CONTACT: Morgan Gruenewald, (301) 492-5141, 
Danielle Ojeda, (301) 492-4418, 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:

I. Background

    The Patient Protection and Affordable Care Act (ACA) \1\ generally 
\2\ requires that 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'' to 
be eligible for insurance affordability programs for their Exchange 
coverage 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'' 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 
requires an Exchange 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 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 newly eligible for Exchange coverage under the 
waiver remain ineligible for PTC for their Exchange coverage. While 
neither Colorado nor New York requested a waiver of the ``lawfully 
present'' framework, both States are permitted to use pass-through 
funding based on Federal savings from their 1332 waivers to support 
programs covering immigrants who are ineligible for PTC. Colorado 
provides premium and cost-sharing subsidies to individuals earning 
up to 300 percent of the Federal poverty level (FPL) who are 
otherwise ineligible for Federal premium subsidies, including 
undocumented individuals. Under New York's section 1332 waiver, some 
immigrants with household incomes up to 200 percent of FPL, 
including DACA recipients, will be eligible for coverage under the 
State's Essential Plan (EP) Expansion plan. Beginning August 1, 2024 
DACA recipients with incomes up to 250 percent of FPL will also be 
eligible for coverage under the State's EP Expansion. For more 
information on the Colorado, Washington, and New York section 1332 
waivers, see https://www.cms.gov/marketplace/states/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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    Consistent with our statutory authority under the ACA and 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 the proposed rule (88 
FR 25313), we proposed to amend these three regulations to update the 
definition of ``lawfully present'' currently 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.\11\ Exchange regulations apply this 
definition to the eligibility standards for APTC and CSRs by requiring 
an applicant to be eligible to enroll through an Exchange in a QHP to 
be eligible for APTC and CSRs.\12\ Accordingly, in the proposed rule, 
when we referred to the regulatory definition of ``lawfully present'' 
used to determine whether a consumer is eligible to enroll in a QHP 
through an Exchange, we were also referring to the regulatory 
definition used to determine whether a consumer is eligible for APTC 
and CSRs.
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    \11\ 42 CFR. Sec.  600.5.
    \12\ 45 CFR 155.305(f)(1)(ii)(A) and (g)(1)(i)(A).
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    In the proposed rule, we proposed a similar definition of 
``lawfully present'' applicable to eligibility for Medicaid and the 
Children's Health Insurance Program (CHIP) in States that elect to 
cover ``lawfully residing'' pregnant women and children under section 
214 of the Children's Health Insurance Program Reauthorization Act of 
2009 (CHIPRA) (hereinafter ``CHIPRA 214 option''), codified at section 
1903(v)(4) of the Social Security Act (the Act) for Medicaid (42 U.S.C. 
1396b(v)(4)) and section 2107(e)(1)(O) of the Act (42 U.S.C. 
1397gg(e)(1)(O)) 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

[[Page 39393]]

which they are applying under the State's Medicaid or CHIP residency 
rules.\13\ The definitions of ``lawfully present'' and ``lawfully 
residing'' used for Medicaid and CHIP are set forth in a 2010 State 
Health Official (SHO) letter (SHO #10-006, hereinafter ``2010 SHO'') 
and further clarified in a 2012 SHO letter (SHO #12-002, hereinafter 
``2012 SHO'').\14\
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    \13\ Centers for Medicare & Medicaid Services. (2010). SHO #10-
006: Medicaid and CHIP Coverage of ``Lawfully Residing'' Children 
and Pregnant Women. Available at: https://downloads.cms.gov/cmsgov/archived-downloads/smdl/downloads/sho10006.pdf.
    \14\ SHO #10-006, see footnote 13; Centers for Medicare & 
Medicaid Services. State Health Official letters (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 proposed 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 proposed 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. We noted in the proposed 
rule that if this proposal were finalized, DACA recipients would be 
considered lawfully present for purposes of eligibility for these 
insurance affordability programs \15\ based on a grant of deferred 
action, just like other similarly situated noncitizens who are granted 
deferred action. We also proposed 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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    \15\ See the definition of ``insurance affordability program'' 
at 45 CFR 155.300(a) and 42 CFR 435.4.
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    We received a large volume of comments, many in favor, and some 
opposed to a definition of ``lawfully present'' that includes DACA 
recipients. We are not finalizing a ``lawfully present'' definition for 
Medicaid and CHIP at this time. Rather, we are taking more time to 
evaluate and carefully consider the comments regarding our proposal 
with respect to Medicaid and CHIP, and specifically, to continue 
evaluating the potential impact of our proposed definition of 
``lawfully present'' on State Medicaid and CHIP agencies. We received 
comments noting the many urgent and competing demands on State 
resources, raising concerns that finalizing the proposal for Medicaid 
and CHIP would add to that burden and divert resources dedicated to 
other matters. For example, State Medicaid and CHIP agencies continue 
to experience a significant workload to ``unwind'' (that is, to return 
to regular eligibility renewal operations) following the expiration of 
the continuous enrollment condition in section 6008(b)(3) of the 
Families First Coronavirus Response Act (FFCRA) on March 31, 2023.\16\ 
During unwinding, States must, over time, process renewals, consistent 
with Federal requirements, for all individuals who were enrolled in 
their Medicaid program as of March 31, 2023. States must disenroll 
individuals who are no longer eligible for Medicaid, determine their 
potential eligibility for other insurance affordability programs, and 
as appropriate, transfer the individual's account to the other 
insurance affordability programs.\17\ We recognize, in addition to the 
concerns raised by the commenters, that States are dedicating 
significant additional resources to implement new statutory 
requirements, including mandatory 12-month continuous eligibility 
periods for children younger than 19 years old in Medicaid and CHIP in 
effect as of January 1, 2024 under the Consolidated Appropriations Act 
(CAA), 2023,\18\ new requirements for State Medicaid and CHIP programs 
related to justice-involved individuals under CAA, 2023,\19\ and 
several new requirements for State Medicaid and CHIP agencies regarding 
benefits, data collection, and eligibility under the Consolidated 
Appropriations Act, 2024 (CAA, 2024).\20\ Many States are implementing 
various systems modernization initiatives to address lessons learned 
from unwinding, and States may also need to make system changes 
necessary to comply with the statutory changes described above. Given 
the significant comments that CMS continues to consider, including 
comments regarding these competing State Medicaid and CHIP priorities, 
increased workload, and finite resources, we are not finalizing 
definitions for ``lawfully present'' and ``lawfully residing'' for 
Medicaid and CHIP in this rule at this time. The rulemaking process 
with regard to that portion of the proposal is ongoing.
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    \16\ See Centers for Medicare & Medicaid Services (CMS), State 
Health Official letter (SHO)# 23-002, ``Medicaid Continuous 
Enrollment Condition Changes, Conditions for Receiving the FFCRA 
Temporary FMAP Increase, Reporting Requirements, and Enforcement 
Provisions in the Consolidated Appropriations Act, 2023,'' January 
27, 2023, available at https://www.medicaid.gov/media/149291; 
additional guidance for State Medicaid and CHIP agencies is 
available at https://www.medicaid.gov/unwinding.
    \17\ CMS, SHO# 22-001, ``Promoting Continuity of Coverage and 
Distributing Eligibility and Enrollment Workload in Medicaid, the 
Children's Health Insurance Program (CHIP), and Basic Health Program 
(BHP) Upon Conclusion of the COVID-19 Public Health Emergency,'' 
March 3, 2022, available at https://www.medicaid.gov/media/135211.
    \18\ Title V, Subtitle B, Section 5112 of the Consolidated 
Appropriations Act, 2023 (CAA, 2023) amended titles XIX and XXI of 
the Act to require that States provide 12 months of continuous 
eligibility for children under the age of 19 in Medicaid and CHIP 
effective January 1, 2024. See also, CMS,SHO #23-004: Section 5112 
Requirement for all States to Provide Continuous Eligibility to 
Children in Medicaid and CHIP under the Consolidated Appropriations 
Act, 2023 (issued September 29, 2023). Available at: https://www.medicaid.gov/media/163771.
    \19\ Under Division FF, Title V, Section 5121 of the 
Consolidated Appropriations Act, 2023, starting January 1, 2025, 
State Medicaid and CHIP programs are required to have a plan in 
place and, in accordance with such plan, provide certain services to 
eligible juveniles within 30 days of their scheduled date of release 
from a public institution following adjudication, and CHIP programs 
are required to suspend, rather than terminate, CHIP coverage.
    \20\ Division G, Title I, Subtitle B of the Consolidated 
Appropriations Act (CAA), 2024 requires that State Medicaid agencies 
provide certain services for beneficiaries; that Medicaid and CHIP 
agencies engage in certain data collection and monitoring 
activities; and that Medicaid and CHIP agencies must no longer 
terminate eligibility for incarcerated adults, including targeted 
low-income pregnant individuals, and must instead suspend 
eligibility in Medicaid. States may also suspend eligibility in 
CHIP.
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    As a result, the definition of ``lawfully present'' used in 
determining eligibility for Medicaid and CHIP under the CHIPRA 214 
option, the current policy, based on the 2010 SHO and the 2012 SHO, 
continues to apply. Individuals, including DACA recipients, who are not 
considered ``lawfully present'' under the 2010 and 2012 SHOs for 
purposes of Medicaid and CHIP under the CHIPRA 214 option, will remain 
ineligible under that specific Medicaid and CHIP State option. DACA 
recipients, however, may continue to be eligible for limited Medicaid 
coverage for the treatment of an emergency medical condition consistent 
with 8 U.S.C. 1611(b)(1)(A) and the regulation at 42 CFR 435.406(b). 
Because we are continuing to evaluate and consider public comments and 
State burdens in connection with our proposal for Medicaid and CHIP for 
DACA recipients, the discussion on the definition of ``lawfully 
present'' in this final rule will focus exclusively on eligibility for 
enrollment through the Exchanges and BHP.
    The definitions finalized in this rule are solely for the purpose 
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. This rule does not 
provide any

[[Page 39394]]

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 (DOJ)'s purview.

II. Summary of the Provisions of the Proposed Rule and Analysis of and 
Responses to Public Comments

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

    We proposed 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 proposed 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 the 
proposed rule at 45 CFR 155.20. While we do not believe the definition 
at 45 CFR 152.2 is used for any other current CMS programs, we proposed 
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 sought comment on whether, alternatively, we 
should remove the definition of ``lawfully present'' currently at 45 
CFR 152.2 instead of replacing it with a cross-reference to 45 CFR 
155.20.
    We did not receive public comments on these proposals to remove the 
definition of ``lawfully present'' at 45 CFR 152.2, to insert a 
definition of ``lawfully present'' at 45 CFR 155.20, and to update 45 
CFR 152.2 and 42 CFR 600.5 to cross-reference the definition at 45 CFR 
155.20. We are finalizing these provisions as proposed.

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

1. DACA Recipients
    The ACA generally requires that 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.'' \21\ 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 the QHP, the ACA 
specifies that individuals who are not lawfully present are also not 
eligible for such insurance affordability programs for their Exchange 
coverage.\22\ The ACA does not include a definition of ``lawfully 
present.'' \23\
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    \21\ 42 U.S.C. 18032(f)(3).
    \22\ 26 U.S.C. 36B(e)(2), 42 U.S.C. 18082(d), 42 U.S.C. 
18071(e).
    \23\ 42 U.S.C. 18001(d)(1).
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    In a 2022 rulemaking, DHS discussed its definition of individuals 
who are considered ``lawfully present'' for purposes of applying for 
Social Security benefits 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, 53156) (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 53211). We discuss this authority in further detail later in 
this section.
    We first established a regulatory definition of ``lawfully 
present'' for purposes of the PCIP program in 2010 (75 FR 45013). In 
that 2010 rulemaking, we 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 the 
2010 SHO establishing eligibility for lawfully present individuals. The 
definition of ``lawfully present'' articulated in the 2010 SHO was also 
informed by DHS regulations now 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, we 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 
implemented, the definitions of ``lawfully present'' set forth in the 
2010 PCIP regulations and the 2012 QHP regulations did not explicitly 
reference DACA recipients. However, these definitions specified that 
individuals granted deferred action were considered lawfully present 
for purposes of eligibility to enroll in a QHP through an Exchange.
    In June 2012, DHS issued the memorandum ``Exercising Prosecutorial 
Discretion for Individuals Who Came to the United States as Children,'' 
announcing the DACA policy.\24\ DHS noted in this memorandum that DACA 
is a form of deferred action, and the forbearance of immigration 
enforcement action 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 stated that the DACA policy was ``necessary to ensure 
that [its] enforcement resources are not expended on these low priority 
cases.'' \25\ DHS did not address DACA recipients' ability to access 
any insurance affordability programs, as the statutory authority to 
address matters related to eligibility for such programs rests with 
HHS, not DHS.
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    \24\ U.S. 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.
    \25\ U.S. 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, we amended the 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 for purposes 
of qualifying for the PCIP program or to enroll in a QHP through an 
Exchange (77 FR 52614), thereby treating DACA recipients differently 
from other deferred action recipients for purposes of these benefit 
programs. We 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, we 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 Medicaid or CHIP under the CHIPRA 214 option because 
they are not considered lawfully present for purposes of these 
programs. In the August 2012 rulemaking that excluded

[[Page 39395]]

DACA recipients from CMS definitions of ``lawfully present,'' we 
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 proposed 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. As proposed, 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. We also proposed to establish rules in 
the Medicaid and CHIP programs to recognize that DACA recipients are 
``lawfully residing'' in the United States for purposes of the CHIPRA 
214 option. We are finalizing our proposal to consider DACA recipients 
to be lawfully present 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. We are not 
finalizing a definition for purposes of Medicaid and CHIP eligibility 
at this time, for the reasons detailed in section I.
    In previously excluding DACA recipients from the definition of 
``lawfully present,'' we had posited that other definitions of lawful 
presence should not be used as a touchstone for eligibility if the 
program 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 mandated by the ACA, and 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 relief that 
the DACA policy afforded. However, on further review and consideration, 
it is clear that the DACA policy is intended to provide recipients with 
a degree of stability and assurance that would allow them to obtain 
education and lawful employment, including because recipients remain 
lower priorities for removal. Extending eligibility to these 
individuals is consistent with those goals. There also was no statutory 
mandate to distinguish between recipients of deferred action under the 
DACA policy and other deferred action recipients.
    While HHS' administration of insurance affordability programs and 
DHS' administration of the DACA policy are separate matters, HHS has 
determined that changing its own definitions of ``lawfully present'' 
for purposes of Exchange and BHP eligibility is consistent with DHS' 
explanation of this definition in the DHS DACA final rule. In the DHS 
DACA Final Rule, DHS suggested that an individual ``whose temporary 
presence in the United States the Government has chosen to tolerate for 
reasons of resource allocation, administrability, humanitarian concern, 
agency convenience, and other factors'' could be lawfully present (87 
FR 53152, 53156).\26\ This rule's change to no longer exclude DACA 
recipients from definitions of ``lawfully present'' applicable to 
Exchanges and the BHP is consistent with DHS' stated conception of 
lawful presence. It also aligns with the longstanding DHS definition of 
lawful presence for purposes of applying for Social Security benefits 
under 8 CFR 1.3. We are not finalizing a definition for purposes of 
Medicaid or CHIP under the CHIPRA 214 option at this time, for the 
reasons detailed in section I.
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    \26\ See ``Deferred Action for Childhood Arrivals'' (87 FR 
53152). Specifically, see 87 FR 53206 for DHS's discussion of the 
rule's provisions regarding lawful presence. https://www.federalregister.gov/d/2022-18401/p-744
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    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 (87 FR 53152).\27\ Among other things, the DHS 
DACA final rule reiterated USCIS's longstanding policy that a 
noncitizen who has been granted deferred action is deemed ``lawfully 
present''--a specialized term of art that the Congress has used in 
other statutes, including in 8 U.S.C. 1611(b)(2) with respect to 
receipt of certain Social Security benefits. We are aware that DHS 
received public comments about the ``HHS exclusion of DACA recipients 
from participation in Medicaid, the Children's Health Insurance Program 
(CHIP), and the ACA health insurance marketplace'' (87 FR 53210). 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 53212). While review of the DHS DACA 
final rule in part prompted HHS to revisit its own interpretation of 
``lawfully present,'' HHS' administration of insurance affordability 
programs implicates separate statutory authority and policy 
considerations. HHS has independently decided that these changes 
reflect the best policy for the insurance affordability programs 
addressed in this rule, and also determined that the changes finalized 
in this rule align with longstanding DHS policy 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.
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    \27\ Current court orders prohibit DHS from fully administering 
the DACA final rule. However, a partial stay permits DHS to continue 
processing DACA renewal requests and related applications for 
employment authorization documents. See USCIS, DACA Litigation 
Information and Frequently Asked Questions (Nov. 3, 2022), https://www.uscis.gov/humanitarian/consideration-of-deferred-action-for-childhood-arrivals-daca/daca-litigation-information-and-frequently-asked-questions.
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    Further, since HHS first interpreted ``lawfully present'' to 
exclude DACA recipients in 2012, new information regarding DACA 
recipients' access to health insurance coverage has emerged. In the 
proposed rule, we cited a 2021 survey of DACA recipients that found 
while DACA may facilitate access to health insurance through employer-
based plans, 34 percent of DACA recipient respondents reported that 
they were not covered by health insurance.\28\ Since the proposed rule 
was published, an updated version of this survey has become available. 
According to 2022 survey data, 27 percent of DACA recipients are not 
covered by health insurance.\29\ While this represents a modest 
improvement in the uninsured rate among DACA recipients, it is 
important to note that DACA recipients are still more than three times 
more likely to be uninsured than the general U.S. population, which had 
a national uninsured rate of 7.7 percent.30 31
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    \28\ National Immigration Law Center. Tracking DACA Recipients' 
Access to Health Care (2022). https://www.nilc.org/wp-content/uploads/2022/06/NILC_DACA-Report_060122.pdf.
    \29\ National Immigration Law Center. Tracking DACA Recipients' 
Access to Health Care (2023). https://www.nilc.org/wp-content/uploads/2023/05/NILC_DACA-Report_2023.pdf.
    \30\ National Immigration Law Center. Tracking DACA Recipients' 
Access to Health Care (2023). https://www.nilc.org/wp-content/uploads/2023/05/NILC_DACA-Report_2023.pdf.
    \31\ U.S. Department of Health and Human Services. New HHS 
Report Shows National Uninsured Rate Reached All-Time Low in 2023 
After Record-Breaking ACA Enrollment Period (2023). https://www.hhs.gov/about/news/2023/08/03/new-hhs-report-shows-national-uninsured-rate-reached-all-time-low-2023-after-record-breaking-aca-enrollment-period.html.

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[[Page 39396]]

    Individuals without health insurance are less likely to receive 
preventive or routine health screenings and may delay necessary medical 
care, incurring high costs and debts.\32\ In the proposed rule, we 
noted that 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 stated that they or a family member were unable to pay 
medical bills or expenses.\33\ According to newly available 2022 survey 
data, both of these rates have increased, with 48 percent of 
respondents experiencing a delay in medical care due to their 
immigration status, and 71 percent of respondents unable to pay medical 
bills or expenses.\34\ These outcomes can have downstream impacts that 
further disrupt individuals' health and financial stability, and 
therefore their ability to work or study. Delays in care can lead to 
negative health outcomes including longer hospital stays and increased 
mortality, whereas being unable to pay medical bills puts individuals 
at higher risk of food and housing insecurity.35 36 37
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    \32\ Kaiser Family Foundation. Key Facts About the Uninsured 
Population (2023). https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/.
    \33\ National Immigration Law Center. Tracking DACA Recipients' 
Access to Health Care (2022). https://www.nilc.org/wp-content/uploads/2022/06/NILC_DACA-Report_060122.pdf.
    \34\ National Immigration Law Center. Tracking DACA Recipients' 
Access to Health Care (2023). https://www.nilc.org/wp-content/uploads/2023/05/NILC_DACA-Report_2023.pdf.
    \35\ Weissman JS, Stern R, Fielding SL, Epstein AM. (1991). 
Delayed access to health care: risk factors, reasons, and 
consequences. Ann Intern Med. 1991 Feb 15;114(4):325-31. https://doi.org/10.7326/0003-4819-114-4-325.
    \36\ Hanna, T.P., King, W.D., Thibodeau, S., Jalink, M., Paulin, 
G.A., Harvey-Jones, E., O'Sullivan, D.E., Booth, C.M., Sullivan, R., 
& Aggarwal, A. (2020). Mortality due to cancer treatment delay: 
systematic review and meta-analysis. BMJ (Clinical research ed.), 
371, m4087. https://doi.org/10.1136/bmj.m4087.
    \37\ Himmelstein, D. U., Dickman, S. L., McCormick, D., Bor, D. 
H., Gaffney, A., & Woolhandler, S. (2022). Prevalence and Risk 
Factors for Medical Debt and Subsequent Changes in Social 
Determinants of Health in the US. JAMA network open, 5(9), e2231898. 
https://doi.org/10.1001/jamanetworkopen.2022.31898.
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    The COVID-19 PHE 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 
PHE.\38\ 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.\39\ During the height 
of the pandemic, essential workers were disproportionately likely to 
contract COVID-19.40 41 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, as evidenced 
by a 2016 study finding that a worker with health insurance is 
estimated to miss 77 percent fewer days than an uninsured worker.\42\
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    \38\ 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 (2020). https://cmsny.org/daca-essential-workers-covid/.
    \39\ 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 (2020). https://cmsny.org/daca-essential-workers-covid/.
    \40\ 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.
    \41\ 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.
    \42\ 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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    Our proposal to include DACA recipients in the definition of 
``lawfully present'' for purposes of Exchange and BHP coverage aligns 
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. In the proposed rule, we noted that 
DACA recipients represent a pool of relatively young, healthy adults; 
at an average age of 30 per U.S. Citizenship and Immigration Services 
(USCIS) data, they are younger than the general Exchange 
population.\43\ Thus, there may be a slight positive effect on the 
Exchange or BHP risk pools as a result of this proposed change, 
discussed further in the Regulatory Impact Analysis in section V.C. of 
this final rule.
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    \43\ Count of Active DACA Recipients by Month of Current DACA 
Expiration as of September 30, 2023. U.S. Citizenship and 
Immigration Services. https://www.uscis.gov/sites/default/files/document/data/active_daca_recipients_fy23_q4.pdf.
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    As discussed above, HHS sees no reason to treat DACA recipients 
differently from other noncitizens who have been granted deferred 
action for purposes of eligibility for health insurance coverage 
through an Exchange or BHP. Accordingly, we proposed to amend our 
regulations at 42 CFR 600.5 and 45 CFR 152.2 and 155.20 so that DACA 
recipients would be considered lawfully present for purposes of 
eligibility for health insurance coverage through an Exchange or a BHP, 
just like other individuals granted deferred action (88 FR 25313). 
Specifically, we proposed 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 
the preamble of the proposed rule, we explained the proposal 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 align the Exchange regulations. In section II.B of preamble of the 
proposed rule, we also explained the proposal to remove the existing 
exception in 45 CFR 152.2 that excludes DACA recipients from the 
definition of ``lawfully present,'' and to clarify that references to 
noncitizens who are granted deferred action who are lawfully present 
for purposes of this provision include DACA recipients. Finally, in 
section II.E of preamble of the proposed rule, we explained the 
proposal to amend BHP regulations at 42 CFR 600.5 to cross-reference 
the definition of ``lawfully present'' proposed at 45 CFR 155.20. Under 
these proposed changes, we estimated that approximately 124,000 DACA 
recipients would enroll in a QHP through an Exchange or a BHP. We 
received public comments on these proposals. The following is a summary 
of the comments we received and our responses.
General Support
    Comment: Many commenters noted general support for CMS' proposal to 
include DACA recipients in the definition of ``lawfully present,'' such 
that DACA recipients may be eligible for CMS insurance affordability 
programs, including enrolling in a QHP and obtaining APTC and CSRs 
through an Exchange, or enrolling in a BHP.
    Response: We appreciate comments that we received in support of 
this rule's change to no longer exclude DACA recipients from 
definitions of ``lawfully present'' used to determine eligibility to

[[Page 39397]]

enroll in a QHP, for APTC and CSRs through an Exchange, and for a BHP.
    Comment: Commenters noted support for CMS' clarification that the 
provisions in the proposed rule only pertained to the definitions of 
``lawfully present'' to determine eligibility for certain health care 
benefits--including eligibility to enroll in a QHP or a BHP--and that 
nothing in the proposed rule provided any noncitizen relief or 
protection from removal, or conveyed 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 DHS' or DOJ's purview.
    Response: We reiterate that the provisions in this final rule, only 
apply to eligibility to enroll in a QHP and a BHP.
    Comment: Some commenters stated that the proposed rule was a lawful 
exercise of the Department's authority under the ACA to define 
``lawfully present'' for use in determining eligibility in HHS 
programs, and that the provisions in the proposed rule better 
effectuated the ACA's purposes than the current regulatory scheme. One 
commenter indicated that the rule corrects an error of CMS' 2012 
regulation, which treated DACA recipients as a sui generis class of 
deferred action recipients, rather than what the commenter described as 
one in a long line of deferred action policies in the nation's history.
    One commenter noted that the ACA uses the phrase ``lawfully 
present'' as an eligibility criterion in multiple provisions. The 
commenter believed that the Congress's policy directive, to consider 
individuals who are lawfully present, and only those lawfully present, 
as eligible for the ACA's benefits, was clear. The commenter noted that 
although the ACA did not define ``lawfully present,'' that this phrase 
was also used at 8 U.S.C. 1611(b)(2), which predates the ACA, as an 
eligibility criterion for Title II Social Security benefits. The 
commenter noted that 8 U.S.C. 1611(b)(2) grants authority to the 
Attorney General (now the Secretary of Homeland Security) to define who 
is lawfully present for purposes of Title II Social Security benefits. 
The commenter noted that when we changed course after DACA was 
announced, DHS did not change the definition of ``lawfully present'' 
used in their regulations.
    The commenter described the status quo as incongruous, particularly 
given how DHS treats DACA recipients for purposes of immigration law. 
The commenter noted that although DACA, and deferred action generally, 
is not a form of ``lawful status,'' DHS does not consider deferred 
action recipients to be unlawfully present in the United States as long 
as their deferred action is in effect. The commenter further noted that 
unlawful presence has serious ramifications, including inadmissibility 
to the United States. The commenter stated that DACA recipients are, 
due to decades-old DHS regulations, eligible for work authorization. As 
a result of CMS' prior rulemaking, this meant that although DACA 
recipients have been eligible to live and work in the United States and 
have been eligible to receive benefits like Social Security, they are 
barred from accessing crucial aspects of the health care system. The 
commenter supported the elimination of this inconsistency, which would 
``thereby harmonize the definition of a single statutory phrase across 
agencies and applications, following the lead of the Federal agency 
best suited to make immigration determinations--DHS.''
    Response: We agree that this rule is a lawful exercise of CMS' 
authority to interpret the statutes it is charged with implementing, as 
described in detail throughout this rule. We agree with commenters that 
the changes proposed in this rule better effectuate the goals of the 
ACA by expanding access to affordable health insurance coverage and are 
consistent with DHS' rules for Social Security defining ``lawfully 
present'' at 8 CFR 1.3. We further acknowledge that this rule will 
eliminate the discrepancy by which DACA recipients are currently 
treated differently from other recipients of deferred action for 
purposes of eligibility for enrollment in a QHP or a BHP.
    Because we are not finalizing a definition of ``lawfully present'' 
for purposes of Medicaid and CHIP eligibility under the CHIPRA 214 
option at this time, there will be differences between who is 
considered ``lawfully present'' for Medicaid and CHIP and who is 
considered ``lawfully present'' for Exchange coverage and the BHP. We 
acknowledge commenters' interest in having a uniform definition across 
our insurance affordability programs, as uniformity was a factor we 
considered in our proposals. However, we are not finalizing a 
definition of ``lawfully present'' for purposes of Medicaid and CHIP 
eligibility at this time due to the reasons detailed in section I. 
Accordingly, we will consider, along with the comments we received on 
the proposed amendments to the definitions for purposes of Medicaid and 
CHIP, the potential benefits of such uniformity in any future 
rulemaking on this topic.
    Comment: Many commenters stated that they agreed that DACA 
recipients should be treated the same as other recipients of deferred 
action, and that there is no reason for CMS to treat DACA recipients 
differently from other recipients of deferred action. One commenter 
stated that they believed deferred action recipients were eligible for 
QHP and BHP per the ACA, and that CMS' prior policy ``undermined this 
statutory eligibility'' and appreciated CMS updating the current policy 
of exclusion.
    A comment submitted by some State attorneys general referred to the 
current exclusion as a ``discrepancy in the current regulatory 
scheme.'' This commenter also noted that the Federal Government has a 
long history of granting deferred action, including 17 different 
deferred action policies prior to DACA, and that none of the deferred 
action recipients under any of these other policies were categorically 
denied access to health insurance affordability programs. The commenter 
noted that the current exclusion bars DACA recipients from health 
insurance affordability programs that their tax contributions help 
fund. Another commenter stated this would bring greater consistency to 
Federal policy in this area and would advance the goals of the ACA.
    Response: We agree with the commenters that DACA recipients should 
be treated the same as other recipients of deferred action for purposes 
of eligibility for Exchanges and the BHP. Commenters are correct that, 
up until now, DACA recipients have been the only category of deferred 
action recipients excluded from eligibility for these insurance 
affordability programs. We acknowledge that this policy did not best 
effectuate the ACA's directive to consider individuals who are 
``lawfully present'' to be otherwise eligible for coverage. We agree 
with the commenter who characterized this exclusion of DACA recipients 
as a ``discrepancy in the regulatory scheme.'' When this final rule is 
effective on November 1, 2024, this discrepancy between DACA 
recipients, who are deferred action recipients, and other deferred 
action recipients will be corrected with respect to Exchange and BHP 
coverage, and all noncitizens granted deferred action by DHS will be 
considered as lawfully present for the purposes of eligibility for 
these programs. We will consider the impacts of eliminating this 
discrepancy for purposes of Medicaid and CHIP eligibility under the 
CHIPRA 214 option in future rulemaking.

[[Page 39398]]

    Comment: Some commenters questioned whether the ACA provided an 
adequate legal basis for CMS to treat DACA recipients differently from 
other recipients of deferred action. Commenters further stated that 
they believed that CMS' 2012 IFR excluding DACA recipients from the 
definition of ``lawfully present'' was not aligned with the ACA's goal 
to expand access to affordable health coverage to the uninsured.
    Response: The ACA does not define the term ``lawfully present,'' 
but our regulations implementing the ACA have recognized that 
noncitizens with a currently valid period of deferred action were 
lawfully present. For the reasons stated above, we believe that the ACA 
supports our proposed change in policy for DACA recipients as these 
individuals will be treated as lawfully present just like other 
individuals granted deferred action for the purposes of eligibility for 
health insurance through an Exchange or a BHP.
    We agree with the comment that our prior policy did not fully align 
with the ACA's goal to expand access to affordable health coverage for 
the uninsured. We agree with commenters that the changes in this rule 
better effectuate the congressional intent in the ACA, given the ACA's 
broad aims to expand access to affordable health insurance coverage. As 
mentioned throughout this rule, new information regarding DACA 
recipients' difficulty in accessing health insurance coverage has 
become available since we adopted our prior policy. As mentioned 
previously in this rule, despite some DACA recipients being able to 
access health insurance coverage through their employers as a result of 
the employment authorization provided under the DACA policy, DACA 
recipients are still more than three times more likely to be uninsured 
than the general U.S. population, which had a national uninsured rate 
of 7.7 percent.44 45
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    \44\ National Immigration Law Center. Tracking DACA Recipients' 
Access to Health Care (2023). https://www.nilc.org/wp-content/uploads/2023/05/NILC_DACA-Report_2023.pdf.
    \45\ U.S. Department of Health and Human Services. New HHS 
Report Shows National Uninsured Rate Reached All-Time Low in 2023 
After Record-Breaking ACA Enrollment Period (2023). https://www.hhs.gov/about/news/2023/08/03/new-hhs-report-shows-national-uninsured-rate-reached-all-time-low-2023-after-record-breaking-aca-enrollment-period.html.
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    Comment: Some commenters noted that the current exclusion of DACA 
recipients from CMS definitions of ``lawfully present'' is inconsistent 
with other rules pertaining to public benefits eligibility for 
individuals with deferred action, including DHS regulations at 8 CFR 
1.3 for the purposes of eligibility for Title II Social Security 
benefits. Commenters supported CMS' proposal to better align with DHS' 
policies.
    Response: This rule would bring eligibility for health insurance 
through an Exchange and a BHP into alignment with DACA recipients' 
treatment under rules used by the Social Security Administration for 
Title II Social Security Benefits, as articulated in DHS regulations at 
8 CFR 1.3. As we are not finalizing a definition of ``lawfully 
present'' for purposes of eligibility for Medicaid or CHIP under the 
CHIPRA 214 option at this time, due to the reasons detailed in section 
I, the definition used for purposes of those programs will continue to 
differ from DHS regulations at 8 CFR 1.3 with respect to DACA 
recipients. We will consider the impacts of updating the Medicaid and 
CHIP definition of ``lawfully present'' in future rulemaking.
    Comment: Some commenters, including nonprofit advocacy 
organizations and State government agencies, stated the belief that no 
longer excluding DACA recipients from Exchange coverage could have a 
positive impact on Exchange risk pools. One government agency noted 
that improving the risk pool in this way will benefit insurers, and 
commenters further noted that improving risk pools in this way is 
expected to exert downward pressure on QHP premiums and to improve 
market stability. In support of the argument that allowing DACA 
recipients to access Exchange coverage could improve individual market 
risk pools, multiple commenters cited a study that found that DACA 
recipients had similar self-reported health status to U.S. born 
individuals, with 92 percent of survey respondents eligible for DACA 
reporting excellent, very good, or good health.\46\ Commenters noted 
that DACA recipients are also younger, on average, than current 
Exchange enrollees, with an average age of 30.\47\
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    \46\ Key Facts on Deferred Action for Childhood Arrivals (DACA) 
(2023), https://www.kff.org/racial-equity-and-health-policy/fact-sheet/key-facts-on-deferred-action-for-childhood-arrivals-daca/.
    \47\ Count of Active DACA Recipients by Month of Current DACA 
Expiration as of September 30, 2023. U.S. Citizenship and 
Immigration Services. https://www.uscis.gov/sites/default/files/document/data/active_daca_recipients_fy23_q4.pdf.
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    Response: While we are unable to quantify the potential impacts of 
this policy on Exchange risk pools, we believe it is reasonable to 
predict that allowing DACA recipients to enroll in Exchange coverage 
may have a positive impact. DACA recipients, whose average age is now 
30, are younger than the existing population of Exchange enrollees, of 
whom 64 percent are age 35 or older.48 49 As commenters 
noted, DACA recipients are also generally in good health, due in part 
to the fact that DACA recipients are a relatively young population. 
However, we note that there does exist a slight gap between DACA 
recipients who report they are in excellent or very good health (64 
percent) as compared to U.S. citizens (71 percent).\50\ We are not able 
to assess how DACA recipients' health status compares to that of the 
existing population of Exchange enrollees, or to predict any downstream 
impacts on Exchange risk pools as a result. However, we are hopeful 
that allowing DACA recipients to access Exchange coverage may help 
address these existing disparities due to the positive health impacts 
of having health insurance, which are detailed later in this section.
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    \48\ Count of Active DACA Recipients by Month of Current DACA 
Expiration as of September 30, 2023. U.S. Citizenship and 
Immigration Services. https://www.uscis.gov/sites/default/files/document/data/active_daca_recipients_fy23_q4.pdf.
    \49\ Centers for Medicare and Medicaid Services. 2024 Open 
Enrollment Report. https://www.cms.gov/files/document/health-insurance-exchanges-2024-open-enrollment-report-final.pdf.
    \50\ Key Facts on Deferred Action for Childhood Arrivals (DACA) 
(2023), https://www.kff.org/racial-equity-and-health-policy/fact-sheet/key-facts-on-deferred-action-for-childhood-arrivals-daca/.
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    Comment: One State government agency noted that extending QHP 
eligibility for DACA recipients is particularly important because DACA 
recipients may lose access to State-funded Medi-Cal during unwinding. 
Another commenter noted that extending QHP eligibility for DACA 
recipients is particularly important because even in the State of 
California, where DACA recipients may qualify for State-funded Medi-Cal 
if they are income-eligible, 57 percent of individuals likely eligible 
for DACA have incomes above 200 percent of the FPL. Allowing these DACA 
recipients to enroll in health coverage through a QHP provides an 
important source for affordable health insurance coverage that is not 
currently available.
    Response: We appreciate a commenter pointing out the importance of 
making Exchange coverage available to DACA recipients who may not be 
eligible for, or who may be losing, State-funded health coverage during 
unwinding. While we are not finalizing a definition for purposes of 
Medicaid and CHIP eligibility at this time, due to the reasons detailed 
in section I, we will take this comment into consideration as part of 
any future rulemaking on this topic.

[[Page 39399]]

General Opposition
    Comment: Some commenters noted general opposition to CMS' proposal 
to consider DACA recipients lawfully present for purposes of insurance 
affordability programs. Some commenters urged CMS to withdraw the rule, 
or alternatively, to remove the proposed changes that would no longer 
exclude DACA recipients from the definitions of ``lawfully present'' 
used to determine eligibility for CMS insurance affordability programs.
    Some commenters noted opposition to this rule on the basis that 
they believe DACA recipients entered the United States unlawfully, that 
they believe DACA recipients are undocumented, or that they believe 
DACA recipients have broken the law. Commenters stated that rules such 
as the one that CMS has proposed further incentivize illegal 
immigration, increase fraud and abuse of government systems, and 
encourage dependency on Federal programs.
    Response: We recognize that some of the public commenters are 
opposed to the change this rule would make, and there is significant 
public debate concerning the availability of some public benefits for 
noncitizens. Although we recognize that the Congress has made a general 
statement of the immigration policy of the United States at 8 U.S.C. 
1601, the Congress has provided some express exceptions that enable 
certain noncitizens to obtain certain public benefits under other 
authorities. For example, as noted in the proposed rule, individuals 
who are either U.S. citizens or nationals or lawfully present in the 
United States are eligible to enroll in a QHP and are eligible for 
PTCs, APTCs, and CSRs (88 FR 25313). We submit that our rule is 
consistent with the relevant statutory authorities.
    In addition, DHS has recognized that even individuals who did not 
enter the United States legally could become ``lawfully present'' under 
the statutes governing particular benefit programs (87 FR 53152, 
53156). DHS notes that ``the term `lawful presence' historically has 
been applied to some persons who are subject to removal (and who may in 
fact have no ``lawful status''), and whose immigration status affords 
no protection from removal, but whose temporary presence in the United 
States the Government has chosen to tolerate for reasons of resource 
allocation, administrability, humanitarian concern, agency convenience, 
and other factors. Lawful presence also encompasses situations in which 
the Secretary, under express statutory authorization, designates 
certain categories of noncitizens as lawfully present for particular 
statutory purposes, such as receipt of Social Security benefits'' (87 
FR 53152). As discussed throughout this rule, we have the authority to 
modify our definition of ``lawfully present'' used as an eligibility 
criterion for the programs we administer and for which we have 
oversight responsibilities.
    We reiterate in response to the public comments that this rule aims 
to establish eligibility criteria only for Exchanges and a BHP and does 
not address or revise immigration policy, including DHS' DACA policy. 
We also reiterate that other recipients of deferred action have long 
been considered lawfully present under our regulations and policies, 
and this rule is removing the exception for DACA recipients for the 
purposes of eligibility for Exchanges and a BHP. We note that while we 
are not addressing the definition of ``lawfully present'' for purposes 
of Medicaid and CHIP eligibility in this final rule, we will consider 
commenters' concerns about negative impacts of DACA recipients being 
considered eligible for Medicaid or CHIP under the CHIPRA 214 option in 
future rulemaking. The rulemaking process with regard to that portion 
of the proposal is ongoing.
    We also do not believe that this rule will encourage irregular 
migration, fraud or abuse of government systems, or encourage 
dependency on Federal programs. While the factors contributing to 
irregular migration are complex and multifaceted, DHS has clearly 
indicated from the beginning of the DACA policy that only certain 
noncitizens continuously residing in the United States since June 15, 
2007 can be considered for deferred action under DACA.\51\ We do not 
believe it is reasonable to conclude that no longer excluding DACA 
recipients from eligibility for insurance through an Exchange or a BHP 
will have any material impact on rates of illegal immigration. 
Individuals must have their lawful presence electronically verified by 
DHS to enroll in our insurance affordability programs, which ensures 
that noncitizens who are not lawfully present, as defined in this final 
rule, will not be able to enroll in health insurance through an 
Exchange and a BHP.
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    \51\ See U.S. 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, and 8 CFR 236.22(b)(2).
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    Comment: A few commenters stated their belief that DACA recipients 
should not be able to access the insurance affordability programs 
discussed in this rule because they do not pay into the U.S. health 
care system via taxes.
    Response: Contrary to the commenter's assertion, we note that DACA 
recipients do pay Federal, State, and local taxes. One analysis 
estimated that DACA recipients contribute $6.2 billion in Federal taxes 
and $3.3 billion in State and local taxes each year.\52\ In addition, 
we note that only DACA recipients who attest that they will file a 
Federal income tax return will be eligible for APTCs for Exchange 
coverage.
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    \52\ Center for American Progress. The Demographic and Economic 
Impacts of DACA Recipients: Fall 2021 Edition. (2022). https://www.americanprogress.org/article/the-demographic-and-economic-impacts-of-daca-recipients-fall-2021-edition/.
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    Comment: A few commenters stated their belief that DACA recipients 
should not be able to access the insurance affordability programs 
addressed in this rule unless they become U.S. citizens, or that DACA 
recipients and other noncitizens should not be able to access more 
benefits than U.S. citizens. A few commenters expressed their belief 
that DACA recipients should use employer sponsored coverage or other 
private coverage. One commenter indicated that they would be in favor 
of making subsidized health insurance coverage available to DACA 
recipients only if they are employed.
    Response: Limiting access to the insurance affordability programs 
addressed in this rule to U.S. citizens, as some commenters suggested, 
is beyond our authority under the ACA. Further, the changes in this 
rule result in DACA recipients becoming potentially eligible for health 
insurance through an Exchange or a BHP for which U.S. citizens, U.S. 
nationals, and other noncitizens determined to be lawfully present are 
already considered eligible. Nothing in this rule restricts or changes 
the insurance affordability programs available to U.S. citizens, U.S. 
nationals, or other such lawfully present noncitizens.
    Finally, we do not have authority under the ACA to limit the 
availability of coverage to individuals who are employed, although 
there is evidence that the majority of DACA recipients are 
employed.\53\
---------------------------------------------------------------------------

    \53\ Center for American Progress. Results from Tom K. Wong et 
al., 2022 National DACA Study. https://www.americanprogress.org/wp-content/uploads/sites/2/2023/04/DACA-Survey-2022-Toplines.pdf.
---------------------------------------------------------------------------

    Comment: One nonprofit organization opposed the proposal stating 
that by expanding the definition of ``lawfully present,'' DACA 
recipients would rely

[[Page 39400]]

on Federal and State benefits that might be taken away if a court rules 
against DHS' DACA policy as codified in its 2022 DACA final rule (87 FR 
53152).
    Response: An individual could cease to be ``lawfully present'' for 
a number of reasons, including because DHS terminates an individual's 
grant of deferred action on a case-by-case basis, because the Congress 
enacts a statute that makes changes to current law, or, as the 
commenter suggests, because of a judicial decision. Regardless of 
whether any of these situations may come to pass in the future, we see 
no compelling reason not to update our regulations, consistent with our 
statutory and regulatory authority, as we have found that our current 
regulations do not best effectuate the ACA. As is detailed throughout 
this rule, we believe there are significant physical health, mental 
health, and financial benefits associated with having access to health 
insurance coverage. For both DACA recipients and other noncitizens who 
may no longer be considered ``lawfully present'' under our regulations 
at some point in the future, we do not believe that the potential risk 
of losing coverage in the future outweighs the potential benefit of 
increasing access to coverage at present.
    Comment: Some commenters noted general opposition to this proposed 
rule stating that they believe more resources should go towards 
ensuring that U.S. citizens have access to the health insurance 
coverage and health care services that they need, before directing 
funds towards DACA recipients and other noncitizens. A few commenters 
stated frustration that the cost of health insurance for U.S. citizens, 
especially those who work, who have families, who are low income, or 
who own small businesses is too high, and they are suffering without 
access to affordable health care. Commenters requested that more work 
should go to fixing the current health care system and that American 
citizens or those who entered the United States legally should be 
receiving better care.
    Response: We are committed to ensuring access to quality, 
affordable health insurance coverage and health care for everyone who 
is eligible for programs we regulate or administer. The insurance 
affordability programs being made available to DACA recipients in this 
rule--Exchange coverage and the BHP, specifically--have been and will 
continue to be available to eligible U.S. citizens, U.S. nationals, and 
other lawfully present noncitizens. The purpose of this rule is to 
establish eligibility requirements for health insurance through an 
Exchange and a BHP rather than dictate where tax dollars are directed. 
We note that nothing in this rule will restrict or eliminate the 
availability of these insurance affordability programs to U.S. 
citizens. In fact, it is possible that allowing DACA recipients to 
enroll in QHPs through an Exchange could lower QHP premiums for all 
enrollees. Given that DACA recipients are, on average, younger than 
current Exchange enrollees, having DACA recipients in the QHP risk 
pools may lower the associated premiums of such plans.
    Comment: Some commenters believe the policies in this proposed rule 
are outside of the President's purview, are not permitted under the 
ACA, and should be policies established by the Congress. Some 
commenters noted that the ACA was passed after extensive discussions 
within the Congress and specific statements were made regarding 
``lawful presence'' and who would receive ACA benefits. A few 
commenters further noted that the DACA policy was implemented to 
prevent deportation, and to provide work permits for those individuals, 
not to extend government benefits to them. Additional commenters 
expressed their belief that whether to provide health insurance to 
individuals who are DACA recipients falls to the Congress, and the 
President has no legal authority. A few commenters also pointed out 
that a prior administration originally prevented DACA recipients from 
accessing ACA coverage.
    Response: We do not agree with the suggestion that the proposed 
rule exceeds our legal authority. We have identified the relevant 
statutory authority that supports our proposed and final rule. 
Moreover, we have identified specific reasons for proposing a change of 
policy and have sought public comments consistent with the requirements 
of the Administrative Procedure Act (APA). We have demonstrated that 
the rule is consistent with our existing authority under the law.
    Comment: Commenters stated their view that the DACA policy is 
unlawful, and that this rule runs counter to immigration laws including 
statute, case law, and ongoing litigation in the Fifth Circuit Court of 
Appeals. One commenter stated that CMS was correct in its initial 
judgment that there was good reason to treat DACA recipients 
differently from other recipients of deferred action. The commenter 
further asserted that unlike other forms of prosecutorial discretion, 
DACA was ``plainly unlawful,'' as it was not authorized by the 
Congress, conflicted with other statutes, and did not originally 
undergo notice and comment rulemaking.
    One nonprofit organization cited the Fifth Circuit's ruling in 
which the court found that DHS does not have authority to ``broaden the 
categories of aliens who are entitled to lawful presence in the United 
States.'' \54\ The commenter also cited the court's findings that the 
DACA Memorandum ``contradicts significant portions of the Immigration 
and Nationality Act (INA),'' and that the 2012 Memorandum by then-DHS 
Secretary Janet Napolitano which announced the DACA policy violated the 
procedural requirements of the APA. One commenter further stated that 
the Congress identified in the INA several discrete categories of 
noncitizens that may be eligible for deferred action, nowhere granting 
the executive branch authority to unilaterally expand on those 
categories. One nonprofit organization cited the court's finding that 
the DACA policy ``failed under step one of the Chevron framework.'' One 
nonprofit organization noted that the Supreme Court has consistently 
held that the Congress holds plenary authority over immigration. The 
commenter cited Kleindienst v. Mandel,\55\ in which the Court noted 
that the Congress has ``plenary power to make rules for the admission 
of aliens and to exclude those who possess those characteristics which 
the Congress has forbidden.''
---------------------------------------------------------------------------

    \54\ Texas et al. v. United States et al., 50 F.4th 498 (5th 
Cir. 2022).
    \55\ 408 U.S. 753, 766 (1972).
---------------------------------------------------------------------------

    One commenter further stated that they believed that by including 
DACA recipients in CMS' definition of ``lawfully present,'' CMS was 
``reinforcing'' DACA, which they viewed to be an ``unlawful program.'' 
One nonprofit research organization stated that because the DACA policy 
is not a lawful exercise of deferred action, and because the DACA 
policy violates procedural and substantive Federal law, that CMS must 
exclude DACA recipients from its definitions of ``lawfully present.''
    Response: We believe that the DACA final rule is lawful. As DHS 
articulates in detail in their final rule, the DACA final rule 
represents a lawful exercise of the Secretary of Homeland Security's 
authority and discretion regarding deferred action (87 FR 53152).
    Perhaps more importantly, this rule does not in any way change 
existing immigration policy, nor does it confer lawful immigration 
status. As we explained in the proposed rule, ``[t]hese proposed 
definitions are solely for the purposes of determining eligibility for

[[Page 39401]]

specific HHS health programs and are not intended to define lawful 
presence for purposes of any other law or program.'' We also noted that 
the 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 DHS's or DOJ's purview.
    The ACA uses the term ``lawfully present'' as an eligibility 
criterion for health insurance through an Exchange or a BHP. As noted 
previously in this final rule, those terms were not defined in the 
operative statute, and we have the authority to define these terms for 
the purposes of determining eligibility for health insurance through an 
Exchange and a BHP.
    Comment: One commenter, a nonprofit research organization, stated 
that because CMS' proposed change in policy is not based on a 
reasonable rationale, that extending benefits to DACA recipients is 
ultra vires and violates the APA. The commenter further stated that it 
believed that CMS' rationale for changing its interpretation is not 
justified by the facts and is therefore unlawful under the APA. The 
commenter asserted that CMS has failed to meet the standards of the APA 
by proposing to consider DACA recipients as ``lawfully present'' 
despite the DACA policy's ``serious legal deficiencies.'' The commenter 
specifically stated that CMS' explanation that, upon further review, 
the DACA policy ``was intended to provide recipients with the stability 
and assurance that would allow them to obtain education and lawful 
employment, and to integrate as productive members of society'' is 
inconsistent with the inherent nature of deferred action, which DHS has 
specified can be ``terminated at any time, in its discretion.'' The 
commenter noted that if DACA is truly a form of prosecutorial 
discretion, then DACA grants must be case-by-case and based on 
prioritization of cases, rather than a class-based benefits program 
intended to provide stability to a specific class of beneficiaries in a 
manner similar to standard immigration benefits. The commenter stated 
that any stability DACA recipients may receive as a part of the policy 
is unwarranted, and that deferred action does not provide lawful status 
or a right to remain in the United States nor does it excuse past or 
future periods of unlawful presence.
    Response: We have met our obligations under the APA to explain our 
proposed policy change to no longer exclude DACA recipients from the 
group of individuals with deferred action in our definitions of lawful 
presence for purposes of eligibility for health insurance through an 
Exchange and a BHP. As noted above, we have the authority to define the 
term ``lawfully present'' as an eligibility criterion for health 
insurance through an Exchange or a BHP as the term was previously not 
defined in the operative statute.
    Additionally, as discussed in this final rule and in the proposed 
rule, new information regarding DACA recipients' difficulty accessing 
health insurance coverage and health care has become available since we 
first excluded DACA recipients from our definitions of ``lawfully 
present'' in 2012. In this rule, we are adopting a policy that better 
effectuates the goals of the ACA to promote access to affordable health 
insurance coverage through Exchanges and BHPs. Further, we disagree 
with the commenter's characterization that any stability that DACA 
recipients receive related to the DACA policy is unwarranted. While 
deferred action does not confer legal immigration status or a right to 
remain in the United States, it does provide a degree of stability to 
recipients, including through providing eligibility to request 
employment authorization.
    Comment: One government agency stated that it is illogical to 
consider DACA recipients and other deferred action recipients to be 
``lawfully present'' because the ``action'' that is deferred under DACA 
and other deferred action policies is action on their recipients' 
unlawful presence. In support of this argument, the commenter cited an 
Eleventh Circuit opinion, which has noted that DACA recipients are 
``given a reprieve from potential removal; that does not mean they are 
in any way `lawfully present' under the [INA].'' \56\
---------------------------------------------------------------------------

    \56\ Estrada v. Becker, 917 F.3d 1298, 1305 (11th Cir. 2019) 
(citing Ga. Latino All. for Human Rights v. Governor of Ga., 691 
F.3d 1250, 1258 n.2 (11th Cir. 2012).
---------------------------------------------------------------------------

    Response: As DHS explained in their DACA final rule, the concept of 
``lawful presence'' is a term of art used in certain benefit statutes 
and without a single controlling statutory definition. Still, we 
acknowledge that lawful presence is not an immigration status and does 
not connote a ``lawful immigration status.'' As DHS states in its DACA 
final rule, ``[a]n individual's lawful presence can include situations 
in which the executive branch tolerates an individual being present in 
the United States at a certain, limited time or for a particular, well-
defined period. The term is reasonably understood to include someone 
who is (under the law as enacted by the Congress) subject to removal, 
and whose immigration status affords no protection from removal, but 
whose temporary presence in the United States the Government has chosen 
to tolerate, including for reasons of resource allocation, 
administrability, humanitarian concern, agency convenience, and other 
factors.'' (87 FR 53152).
    Deferred action recipients have been considered lawfully present 
under regulations for many years for purposes of eligibility for Social 
Security, the Exchange, BHP, and under existing CMS policy outlined in 
the 2010 SHO for Medicaid and CHIP under the CHIPRA 214 option, and 
thus may be receiving benefits if they meet all other eligibility 
requirements for those programs.
    The INA does not include a definition of ``lawfully present.'' As 
noted by DHS in their DACA final rule, there is no singular definition 
of ``lawfully present'' for all purposes and the term is not a legal 
immigration status. Similar to how DHS considers deferred action 
recipients lawfully present for purposes of Title II Social Security 
benefits under 8 CFR 1.3, this rule only addresses eligibility for 
specific programs. Under the authority granted the HHS Secretary by the 
ACA, we are defining ``lawfully present'' for purposes of Exchanges and 
BHP programs and believe we have adopted a reasonable approach in doing 
so.
    Comment: A few commenters stated that CMS' changes to consider DACA 
recipients as ``lawfully present'' for purposes of its programs should 
go through the Congress, and that this rule reaches beyond the 
jurisdiction of the Executive branch. Commenters further indicated that 
they believed that bypassing the Congress was inappropriate because of 
the Congress's role in appropriating funding.
    Response: Where the Congress uses a term like ``lawfully present'' 
but does not define the term, the agency is required to interpret the 
statute, particularly where the Congress grants the agency broad 
rulemaking authority to implement the statute, as it has done in the 
ACA.\57\ We do not agree with the commenters' suggestion that we have 
acted beyond our statutory authority by proposing to include DACA 
recipients within the term ``lawfully present'' for purposes of 
eligibility for health insurance through an Exchange or a BHP as 
addressed in this rule. After review, we believe that the revised 
definition of ``lawfully present'' for

[[Page 39402]]

purposes of eligibility for health insurance through an Exchange or BHP 
is the most accurate interpretation of the ACA's text and better 
effectuates the Congressional intent in the ACA.
---------------------------------------------------------------------------

    \57\ 42 U.S.C. 18041(a)(1).
---------------------------------------------------------------------------

Access to Care
    Comment: Many advocacy organizations, government agencies, and 
health insurers noted that despite DACA recipients' relatively high 
rates of employment, DACA recipients continue to face barriers to 
accessing health insurance coverage and health care. Some commenters 
cited a 2021 study that found that over one-third of DACA recipients 
were uninsured, and others cited an analysis of 2022 Current Population 
Survey Annual Social and Economic Supplement data that found that 
nearly half of individuals likely eligible for DACA are uninsured. 
Commenters noted that high proportions of DACA recipients reported 
being unable to pay medical bills. Another commenter noted that while 
DACA recipients initially realized some health improvements when the 
2012 DACA policy was established, that those improvements slowed as 
uncertainty surrounding the policy grew. Commenters stated that this 
rule was urgently necessary to help DACA recipients gain access to 
needed health insurance coverage and close the insurance gap, in line 
with the goals of the ACA.
    One nonprofit organization noted that individuals who would benefit 
from this rule likely have limited incomes and it is very unlikely that 
these individuals can afford health insurance. Another commenter cited 
data showing that in the State of New York, approximately two-thirds of 
DACA recipients have incomes below 100 percent of the FPL. By gaining 
access to insurance affordability programs, the commenter noted that 
this population would have an opportunity to enroll that is currently 
not available.
    Several commenters noted that a significant proportion of DACA 
recipients are parents, citing estimates ranging from 30 percent to 48 
percent of DACA recipients, and noted that 250,000 to 300,000 U.S.-born 
children have a parent who is a DACA recipient. Commenters cited 
studies showing that children are more likely to be insured when their 
parents have health insurance, and that therefore, expanding the health 
insurance options available to DACA recipients through this rule would 
also likely improve access to insurance for their children. One 
commenter noted U.S. citizen children with at least one noncitizen 
parent are twice as likely to be uninsured as those with two U.S. 
citizen parents.
    Response: We agree with commenters' view that DACA recipients face 
disproportionately high rates of uninsurance, which has negative 
downstream health and economic impacts, discussed in further detail 
below. We believe that no longer barring DACA recipients from accessing 
health insurance through an Exchange or a BHP will enable previously 
uninsured DACA recipients to enroll in affordable and quality health 
insurance coverage and ultimately improve health outcomes for 
communities that have faced historical inequities.
    We note that, in line with 26 U.S.C. 36B(c)(1)(B) and 42 U.S.C. 
18071(b)(2), under the policy outlined in this rule, DACA recipients 
would generally be considered eligible for APTC and CSRs even if their 
household income is below 100 percent of the FPL, as individuals who 
are lawfully present but are ineligible for Medicaid due to their 
``alien status.'' Under the enhanced subsidies made available through 
the American Rescue Plan Act and the Inflation Reduction Act, DACA 
recipients with household incomes up to 150 percent of the FPL would be 
eligible for zero-dollar premium silver plans, if otherwise eligible 
for APTC.\58\ While we are not finalizing a definition of ``lawfully 
present'' for purposes of eligibility for Medicaid or CHIP under the 
CHIPRA 214 option at this time, we believe that most DACA recipients 
who may have been eligible for Medicaid or CHIP under the CHIPRA 214 
option under our proposed rule will be eligible to enroll in a QHP with 
generous APTC and CSRs, or in the BHP, under this final rule. Because 
of this, we believe that this final rule will still decrease rates of 
uninsurance among DACA recipients.
---------------------------------------------------------------------------

    \58\ See Section 9661 of the American Rescue Plan Act of 2021, 
Public Law 117-2 (March 11, 2021), and Section 12001 of the 
Inflation Reduction Act of 2022, Public Law 117-169 (August 16, 
2022), which established enhanced premium tax credits for Exchange 
coverage through 2025.
---------------------------------------------------------------------------

    Finally, we appreciate commenters' illustrations of how this rule 
may not only increase access to insurance coverage for DACA recipients 
and other individuals who would be newly considered lawfully present as 
a result of the final rule, hereinafter ``impacted noncitizens,'' but 
also for their children. We agree with commenters who noted that 
addressing the needs of DACA recipients and their families' need for 
access to affordable health insurance coverage through an Exchange or a 
BHP is in line with the goals of the ACA.
    Comment: Some commenters noted the negative impacts of the COVID-19 
pandemic on DACA recipients. Commenters provided a range of estimates 
of the number of DACA recipients working as essential employees during 
the COVID-19 pandemic. One nonprofit organization cited a study by the 
Center for American Progress that found that more than three quarters 
of DACA recipients in the workforce worked in ``essential'' occupations 
during the public health emergency, and other commenters cited 
estimates ranging from around 200,000 to 343,000 workers at the height 
of the pandemic. Commenters further cited a range of estimates of the 
number of DACA recipients who worked in health care occupations during 
the pandemic, ranging from 30,000 to about 45,000. As essential 
workers, these DACA recipients often put their own and their families' 
health at risk.
    One commenter noted that the COVID-19 pandemic exacerbated deep-
seated disparities in health equity, particularly among communities of 
color, and that systemic barriers have amplified high uninsurance rates 
and the frequency of postponed medical care among communities of color. 
Commenters noted that DACA recipients are much more likely than the 
general population to have coverage through an employer or union. 
Commenters stated that of those with health insurance, 80 percent of 
DACA recipients had coverage through an employer or union, as compared 
to about 50 percent of the general population. As a result, DACA 
recipients' access to health insurance coverage was very directly tied 
to their employment status, and losing their job likely meant losing 
access to health insurance coverage. Commenters cited a 2021 survey of 
DACA recipients that found that nearly one in five had lost employer 
health coverage during the COVID-19 pandemic and noted that DACA 
recipients who lose employer coverage had very limited alternative 
options for obtaining health insurance coverage.
    Response: We agree with the commenters' perspectives on the 
negative impacts that the COVID-19 pandemic had on DACA recipients, 
especially as essential workers. Additionally, we recognize the burden 
that DACA recipients faced when they lost employer-sponsored coverage 
in the midst of a pandemic. We believe that this rule's change to no 
longer exclude DACA recipients from the definition of ``lawfully 
present'' will enable this population to access health insurance 
through an Exchange or a BHP, options

[[Page 39403]]

that were previously unavailable. We believe that by updating the 
eligibility requirements for DACA recipients to enroll in a QHP through 
an Exchange or a BHP, some of the deep-seated disparities in health 
equity that commenters referenced may be reduced.
    Comment: Several commenters encouraged CMS to invest in outreach 
and to create and maintain partnerships with assisters, who are 
certified and trusted community partners who provide free and impartial 
enrollment assistance to consumers (hereinafter ``assisters''), and 
community-based organizations to spread awareness about DACA 
recipients' access to care. One commenter suggested considering the 
geographic density of DACA recipients when determining the allocation 
of marketing resources in media markets.
    Some commenters also urged CMS to provide adequate funding to 
community-based organizations so that they are able to contribute to 
the important work required to implement this rule. Commenters 
articulated how community-based organizations have worked for years to 
build relationships with DACA recipients and urged CMS to leverage 
these organizations' expertise when implementing this rule to ensure 
the maximum benefit for consumers. Commenters noted the importance of 
multilingual materials when conducting outreach and education related 
to this rule.
    A few commenters further noted that targeted outreach is necessary 
to address DACA recipients' fears that accessing health care coverage 
and services could negatively affect their immigration status, given 
persistent fears related to the DHS 2019 public charge rule (84 FR 
41292).\59\
---------------------------------------------------------------------------

    \59\ In 2022, DHS issued the rule ``Public Charge Ground of 
Inadmissibility'' (87 FR 55472), which is applicable to applications 
for adjustment of status postmarked or electronically filed on or 
after December 23, 2022; DHS' 2019 Public Charge final rule (84 FR 
41292) is no longer applicable.
---------------------------------------------------------------------------

    Response: We are committed to conducting outreach and education to 
reach individuals impacted by this rule. We plan to analyze the 
population impacted by this rule and build strategies and tactics to 
educate them that they may be eligible for health insurance through an 
Exchange or a BHP. As noted previously in this final rule, we also plan 
to leverage existing channels for outreach and education utilized 
during the individual market Exchange Open Enrollment Period, including 
multilingual channels, to ensure that impacted noncitizens are aware 
that they may be newly eligible for coverage. We agree with commenters' 
view that to ensure maximization of DACA recipients' ability to access 
coverage, we should partner with assisters and community-based 
organizations.
    Comment: Many commenters detailed how increasing access to health 
insurance coverage has positive impacts on individual and population 
health. Many commenters stated that they expected the provisions in the 
proposed rule would result in increased health and well-being for DACA 
recipients and other impacted noncitizens and would provide more 
equitable access to sources of health care on an individual level. 
Commenters noted that individuals who are insured are more likely to 
have a regular source of care, to receive timely and appropriate 
preventive care, and are less likely to experience certain health 
complications than those who are uninsured. A medical society noted 
that when uninsurance rates increase, worse health outcomes result at a 
population level, including reduced prescription adherence and 
increased prevalence of obesity and malnutrition, especially for 
pregnant or breastfeeding women, infants, or children. Similarly, one 
commenter noted that in States where health benefits are extended to 
all individuals regardless of immigration status, there are lower rates 
of foregoing medical, dental, and preventive care at a population 
level. One commenter noted that expanding access to health insurance 
coverage is particularly critical as the DACA population ages and faces 
new and different health challenges.
    Response: We appreciate commenters' recognition of the many ways 
that this rule has the potential to improve health and decrease 
mortality for impacted noncitizens. While we are unable to quantify 
these potential impacts, we are hopeful that the coverage gains 
facilitated by this rule will positively impact the health and 
wellbeing of DACA recipients and other impacted noncitizens who will be 
newly considered ``lawfully present'' as a result of this rule's 
changes to the ``lawfully present'' definition for the purposes of 
eligibility for health insurance through an Exchange or a BHP.
    Comment: Some commenters provided detailed analysis of the ways in 
which increased access to health insurance can contribute to 
individuals' financial stability. One commenter cited a study that 
found that when an uninsured individual becomes hospitalized, negative 
financial outcomes, including reduced access to credit and higher risk 
of filing for bankruptcy, persist for the following four years. Another 
commenter mentioned that without consistent access to care, costs of 
treatment are higher not only for the individual, but for society as a 
whole.
    Some commenters expected that increased access to health insurance 
would help reduce medical debt for DACA recipients. Commenters noted 
that individuals with medical debt often have to cut spending on basic 
necessities. Because medical debt can threaten individuals' food and 
housing security, it has detrimental effects on social determinants of 
health associated with adverse health outcomes. Some commenters also 
noted that medical debt can have significant financial consequences, 
including having bills going to collections, lower credit scores, 
bankruptcy, home foreclosures, or evictions. Commenters cited a 2022 
survey in which 71 percent of DACA recipient respondents reported being 
unable to pay medical bills or expenses in the past. Commenters further 
noted that the financial stability provided by the provisions in this 
rule may enable DACA recipients to seek education and employment 
opportunities they may not have otherwise been able to access.
    Response: We appreciate commenters' analysis of the many ways that 
this rule has the potential to improve economic stability for impacted 
noncitizens. While we are unable to quantify these potential impacts, 
we are hopeful that the coverage gains facilitated by this rule, via 
the Exchange or a BHP, will positively impact the financial stability 
of DACA recipients, other impacted noncitizens and their families.
    Comment: Several commenters further outlined how increasing access 
to health insurance coverage, or extending it to those who are 
uninsured, has positive impacts not only on individual financial well-
being, but also on community-level economic health. One commenter 
stated that increasing access to affordable health coverage is expected 
to benefit communities, workforce, education systems, arts and culture, 
and many sectors of the economy. One commenter noted agreement with 
CMS' discussion in the proposed rule preamble of the positive impacts 
that the rule is expected to have on the workforce, given that insured 
individuals miss 77 percent fewer workdays than those who are 
uninsured. One nonprofit organization cited studies illustrating that 
access to affordable coverage allows individuals to spend more 
disposable income on essential goods and services, which increases tax 
revenues and produces a ``multiplier effect'' where increased business 
revenues benefit both suppliers

[[Page 39404]]

and employees. This study found that the ``multiplier effect'' of 
Medicaid expansion was as much as 1.5 to 2 times as great as the amount 
of new Federal Medicaid spending. Similarly, one commenter cited a 
study finding that every $100,000 of additional Medicaid spending 
resulted in 3.8 net job-years (that is, one job that lasts one year), 
demonstrating that expanding health benefits creates jobs. One 
nonprofit organization stated that expanding eligibility for DACA 
recipients will continue to pay dividends for years to come at the 
community and national level.
    Some members of the Congress, in their public comment, noted that a 
large portion of DACA recipients are medical and health professional 
students who will play a critical role in the U.S. health care system 
in the future, and they deserve the same access to health care. They 
noted that DACA recipients' access to health care during their 
education is vital to growing the health care workforce.
    Response: We appreciate commenters' analysis of the many ways that 
this rule has the potential to benefit the economies and other social 
systems and institutions in impacted noncitizens' communities. We also 
appreciate the point that ensuring that DACA recipients who are medical 
and health professional students have access to health insurance 
coverage during their training is crucial to growing the health care 
workforce, which benefits communities' health and helps drive down 
health care costs. While we are unable to quantify these potential 
benefits, we believe it is reasonable to predict that the improvements 
in access to health insurance coverage through Exchanges and the BHP 
that will be facilitated by this rule would produce similar positive 
impacts to those we have seen with other expansion efforts.
    Comment: Many commenters noted that excluding DACA recipients from 
definitions of ``lawfully present'' used to determine eligibility for 
CMS programs contributed to health disparities. Commenters further 
noted that because more than 90 percent of DACA recipients are Latino, 
it is likely that the current exclusion of DACA recipients from CMS 
definitions of ``lawfully present'' has contributed to 
disproportionately high uninsurance rates among Latino individuals. 
Specifically, the commenter cited that Latinos have an uninsurance rate 
of 18 percent, as compared to 8.4 percent for non-Hispanic whites. 
Commenters similarly noted persistent disparities in insurance rates 
between immigrants as compared to U.S. citizens. Commenters noted that 
while the ACA resulted in larger reductions in the uninsurance rate 
among Latinos than among any other racial or ethnic population, that 
DACA recipients have been excluded from these gains. Commenters stated 
that they expected that this rule would help mitigate these disparities 
and increase health equity and economic outcomes in the United States. 
One commenter noted that health disparities related to lack of 
insurance coverage were highlighted by recent infectious disease 
outbreaks including COVID-19 and Mpox. In the context of these 
outbreaks, lack of insurance often resulted in delays in seeking care, 
which can exacerbate outbreaks and hobble response efforts.
    Response: We appreciate commenters' assessments of the ways the 
current exclusion of DACA recipients from definitions of ``lawfully 
present'' can contribute to health disparities, particularly for and 
within the Latino population. Studies have long demonstrated the impact 
of health coverage on health outcomes,60 61 62 63 64 and the 
negative health consequences of even relatively short gaps in 
coverage.\65\ Moreover, DACA recipients, with an uninsurance rate of 27 
percent, are more than three times more likely to be uninsured than the 
general U.S. population, which had a national uninsured rate of 7.7 
percent.66 67
---------------------------------------------------------------------------

    \60\ Institute of Medicine (U.S.) Committee on Health Insurance 
Status and Its Consequences. (2009). America's uninsured crisis: 
Consequences for health and health care. https://www.ncbi.nlm.nih.gov/books/NBK214966/ National Academies Press.
    \61\ Barker AR, Li L. The cumulative impact of health insurance 
on health status. Health Serv Res. 2020 Oct;55 Suppl 2(Suppl 2):815-
822. doi: 10.1111/1475-6773.13325.
    \62\ American Hospital Association. Report: The Importance of 
Health Coverage. https://www.aha.org/guidesreports/report-
importance-health-
coverage#:~:text=Impact%20of%20Coverage&text=Studies%20confirm%20that
%20coverage%20improves,on%20individuals%2C%20families%20and%20communi
ties.
    \63\ Woolhandler S, Himmelstein, D. 2017, Sept. The Relationship 
of Health Insurance and Mortality: Is Lack of Insurance Deadly? 
Annals of Internal Medicine. https://doi.org/10.7326/M17-1403.
    \64\ Kaiser Family Foundation. Key Facts About the Uninsured 
Population. (2023). https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/.
    \65\ Gabrielle H, Amber G, Dmitry T. 2022; 25:3, 399-406. Short- 
and Long-Term Health Consequences of Gaps in Health Insurance 
Coverage among Young Adults. Population Health Management. doi: 
10.1089/pop.2021.0211.
    \66\ National Immigration Law Center. Tracking DACA Recipients' 
Access to Health Care (2023). https://www.nilc.org/wp-content/uploads/2023/05/NILC_DACA-Report_2023.pdf.
    \67\ U.S. Department of Health and Human Services. New HHS 
Report Shows National Uninsured Rate Reached All-Time Low in 2023 
After Record-Breaking ACA Enrollment Period (2023). https://www.hhs.gov/about/news/2023/08/03/new-hhs-report-shows-national-uninsured-rate-reached-all-time-low-2023-after-record-breaking-aca-enrollment-period.html.
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    By including DACA recipients in the definition of ``lawfully 
present'' for the purposes of eligibility for health insurance through 
an Exchange or a BHP, we anticipate DACA recipients will have improved 
access to coverage through a QHP or BHP which should, in turn, improve 
consumers' ability to access a range of important health services, 
thereby improving health outcomes and reducing health disparities for 
this population.
    Comment: Some commenters noted that while DACA recipients who are 
uninsured face barriers to accessing care that are similar to other 
uninsured individuals, DACA recipients face additional barriers due to 
concern that using health care services could negatively affect their 
own or their family's immigration status. Commenters cited a survey 
conducted in 2022 that found that nearly half (48 percent) of DACA 
recipient respondents reported delaying getting needed medical care 
because of their immigration status. One commenter stated that over 20 
percent of DACA recipients were concerned that using health care 
services would negatively affect their or their family members' 
immigration status.
    One commenter cited polling conducted in 2018 that found one in 
four Latino voters surveyed (24 percent) had a close family member or 
friend delay or avoid health care because of fear related to 
immigration policies, and one in five (19 percent) stated the same 
about reproductive health care.
    Some commenters urged CMS to clarify in this rule and in outreach 
and education materials that accessing the programs discussed in this 
rule does not make someone a public charge.
    Response: We recognize that some previous governmental policies may 
have caused people to not seek certain benefits. We note, however, that 
the DHS public charge policy has now been significantly changed with 
the publication of the 2022 Public Charge final rule (87 FR 55472). 
DHS' public charge policy from 2019 (84 FR 41292) has been vacated and 
is no longer in effect. When developing outreach and education 
materials related to this rule, we are committed to including content 
making it clear to DACA recipients and other noncitizens that accessing 
coverage through an Exchange or a BHP will not impact their grant of 
DACA, immigration status, or their future ability to adjust their 
status. Enrolling in

[[Page 39405]]

health insurance through the Exchanges, receipt of APTC or PTC, and 
CSRs are not considered in a public charge determination in any 
circumstance.
    Comment: One commenter noted that the provisions in this rule will 
expand access to care for those DACA recipients who may be victims of 
child abuse, domestic violence, sexual assault, and human trafficking. 
The commenter noted that DACA recipients who are survivors of family 
violence and sexual assault may qualify for certain types of 
immigration relief as survivors of crime and abuse, and that ensuring 
that these individuals have access to health care providers who can 
screen for such abuse is critical for both their health and wellbeing 
and for ensuring that they have access to appropriate immigration 
relief.
    Response: We appreciate this commenter's illustration of how access 
to health insurance coverage through an Exchange or a BHP may help 
ensure that DACA recipients and other impacted noncitizens who may have 
been victims of child abuse, domestic violence, sexual assault, and 
human trafficking are able to access the immigration benefits for which 
they may be eligible. We agree that this is yet another illustration 
supporting the goal of ensuring access to health insurance coverage and 
health care through an Exchange or a BHP for the underserved and 
vulnerable noncitizen populations.
    Comment: One commenter noted that despite recent expansions of 
health insurance coverage, low-income Americans still have poor life 
expectancy outcomes.
    Response: We do not agree that disparities in life expectancy rates 
between low-income and high-income Americans demonstrate that 
increasing access to health insurance coverage is not a worthwhile 
endeavor, or that it does not improve health outcomes for low-income 
populations. On the contrary, as other commenters have pointed out, 
increasing access to health insurance coverage is associated with 
improved health outcomes at both the individual and population levels.
Preventive Care
    Comment: Many commenters stated that allowing DACA recipients to 
access QHPs, Medicaid, and CHIP would improve access to preventive 
care. Commenters noted that QHPs are required to cover certain 
essential health benefits, which include preventive services such as 
maternity and newborn care, contraception, and certain cancer 
screenings. Commenters cited studies finding that insured individuals 
are more likely to access preventive care for major health conditions 
and chronic diseases, including cancer.
    One commenter noted that while DACA recipients may be able to 
access certain safety-net health care providers if they do not have 
insurance, expanding access to comprehensive health insurance coverage 
will result in better individual and community health outcomes. 
Commenters further noted that many of the safety net providers that 
uninsured DACA recipients may rely on often have limited resources and 
capacity.
    Response: We appreciate commenters' detailed analysis of the many 
ways in which this rule will, by increasing access to health insurance 
through an Exchange or a BHP, improve impacted noncitizens' ability to 
access critical preventive care. We agree with commenters' perspectives 
that having health insurance coverage should improve consumers' ability 
to access a range of important health services and, in turn, improve 
health outcomes and reduce health disparities for this population. 
While we acknowledge that some of the studies that commenters cited 
referred specifically to the benefits of Medicaid coverage, many of the 
studies cited pertained to the benefits of QHP coverage or health 
insurance coverage more generally, and we expect that this rule will 
result in increased access to preventive care for DACA recipients and 
other impacted noncitizens through Exchanges and the BHP. Comments 
pertaining to the potential health benefits of Medicaid and CHIP 
coverage specifically will be addressed in future rulemaking.
    We also appreciate commenters' illustration of how lack of access 
to preventive care can increase strain on the health care system. While 
safety net providers are an important source of care for uninsured 
individuals, helping more people access coverage that enables them to 
utilize a fuller range of providers both improves health outcomes and 
reduces the strain on safety-net provider resources.
    Comment: Some commenters stated that the provisions in this rule 
will expand access to sexual and reproductive health care and women's 
health care services for DACA recipients. Commenters noted that the 
need for such services is high among DACA recipients, 53 percent of 
whom are women and the majority of whom are of reproductive age. 
Commenters detailed gaps in access to sexual and reproductive health 
care for noncitizens; one commenter cited a study that found that one 
in five noncitizens had not seen sexual and reproductive health 
services provider in the past year and that 30 percent had not had a 
Papanicolaou (Pap) test in the past 3 years. One commenter noted that 
uninsured pregnant individuals receive fewer prenatal care visits and 
have increased rates of harmful maternal and fetal outcomes.
    A few commenters noted that women who are immigrants experience 
higher breast and cervical cancer incidence and mortality rates and 
lower screening rates compared to U.S.-born women, and that lack of 
health insurance coverage is associated with more advanced-stage cancer 
diagnoses. Commenters stated that they expected this rule would help 
mitigate existing racial and ethnic disparities related to sexual and 
reproductive health care outcomes.
    A few commenters further noted that QHPs are required to cover a 
range of sexual and reproductive health care services without cost-
sharing, including well-woman visits, contraceptive services, and 
breast and cervical cancer screenings.
    A few commenters noted the importance of expanding access to sexual 
and reproductive health care services in light of the Supreme Court's 
ruling in Dobbs v. Jackson Women's Health Organization, 597 U.S. 215 
(2022), which overturned Roe v. Wade, 410 U.S. 113 (1973) and Planned 
Parenthood of Southeastern Pennsylvania v. Casey 505 U.S. 833 (1992). 
One commenter noted that in 2022, nearly 40 percent of the Latina women 
who lived in States that were likely to ban abortion were born outside 
of the United States, and that this group likely includes many DACA 
recipients.
    Response: We acknowledge commenters' notes on the importance of 
expanding access to sexual and reproductive health care services, and 
we agree that it is critically important to close gaps in access to 
insurance coverage and care and to drive down existing disparities in 
sexual and reproductive health and improve maternal and child health 
outcomes.
    We agree with commenters' perspectives that insurance coverage 
provides enrollees with access to a range of reproductive health 
services to the benefit of their own and their families' health and 
financial security. We believe this rule will result in increased 
access to sexual and reproductive health care for previously uninsured 
DACA recipients and other impacted noncitizens by increasing coverage 
through Exchanges and the BHP.
    Comment: Some commenters noted that the rule would meaningfully 
expand access to mental and behavioral

[[Page 39406]]

health care services for DACA recipients. Commenters stated that the 
need for mental health care services is high among DACA recipients, who 
may experience feelings of depression, anxiety, and fear related to the 
future of their immigration status. Commenters cited a 2022 survey in 
which 48 percent of DACA recipient respondents indicated they were not 
receiving any health care services for their mental or behavioral 
health issues. Commenters stated that expanding access to health 
insurance coverage for DACA recipients would likely improve DACA 
recipients' mental and behavioral health outcomes. One nonprofit 
organization noted that access to behavioral health services is 
protective against intimate partner violence, child abuse and neglect, 
and suicidality. Another commenter mentioned that a 2022 survey found 
that half of DACA recipients who were uninsured wanted to access mental 
health services but were not doing so because of the associated cost.
    Response: We appreciate commenters' description of the many ways in 
which allowing DACA recipients and other impacted noncitizens to access 
health insurance is expected to promote access to mental and behavioral 
health care services and to improve health care outcomes. We expect 
that this rule will result in increased access to mental and behavioral 
health services for DACA recipients and other impacted noncitizens by 
increasing coverage through Exchanges and the BHP.
Emergency Care
    Comment: Several commenters suggested that the final rule will help 
shift health care visits made by noncitizens from emergency department 
(ED) care to preventive care. Commenters noted that uninsured 
individuals may delay or avoid seeking vital care, which can result in 
needing to utilize a hospital ED. Commenters further noted that 
uninsured individuals are more likely to seek care both non-emergency 
care and emergency care in a hospital ED, where they often receive more 
costly care, fewer services, and have higher mortality rates compared 
to individuals with insurance or individuals who routinely seek 
preventive care. Additionally, commenters noted that routine ED visits 
have the potential to divert resources from patients with more urgent 
health needs. A few commenters noted that visits to the ED by uninsured 
individuals are often more costly than preventive care visits and 
institutions often absorb the cost for uninsured individuals. 
Commenters suggested that by providing DACA recipients with more health 
insurance options, ED costs can shift from institutions to insured 
individuals, which can ultimately reduce costs to taxpayers. Commenters 
expressed their belief that expanding coverage to DACA recipients would 
promote a more efficient health care system. Commenters further 
suggested that the proposed rule would help decrease the amount of 
uncompensated care that EDs provide and would help maintain the 
emergency care safety net by mitigating existing financial risks. One 
commenter noted that emergency care providers face unique costs related 
to staffing EDs 24 hours per day, 7 days per week. The commenter 
further stated that by lessening barriers to enrollment in health 
insurance programs, uncompensated care costs could decline, leading to 
better financial sustainability for emergency care safety net 
providers.
    Response: We appreciate commenters' analysis of the many ways in 
which this rule will shift the opportunity for impacted noncitizens to 
seek health care from EDs to more comprehensive health care that 
includes preventive care. Uninsured populations are more likely than 
those who are insured to postpone seeking care due to cost, which can 
increase the complexity and cost of care that they eventually 
require.\68\ We agree with commenters' analysis that emergency care 
tends to be more costly and complex and that this rule could help 
decrease the amount of uncompensated care that EDs provide which could 
lead to better financial sustainability for emergency care safety net 
providers.69 70
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    \68\ Kaiser Family Foundation. Key Facts About the Uninsured 
Population (2023) https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/.
    \69\ United Health Group. 18 Million Avoidable Hospital 
Emergency Department Visits Add $32 Billion in Costs to the Health 
Care System Each Year. (2019) https://www.unitedhealthgroup.com/content/dam/UHG/PDF/2019/UHG-Avoidable-ED-Visits.pdf.
    \70\ Center on Budget and Policy Priorities. Uncompensated Care 
Costs Fell in Nearly Every State as ACA's Major Coverage Provisions 
Took Effect. (2018) https://www.cbpp.org/research/health/uncompensated-care-costs-fell-in-nearly-every-state-as-acas-major-coverage.
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    We agree with commenters who pointed out that uninsured individuals 
might delay seeking vital care, which can result in ED use. We are 
hopeful that expanding access to QHPs and the BHP to previously 
uninsured DACA recipients and other impacted noncitizens may similarly 
drive down emergency department use. As noted by commenters, we believe 
this rule could promote a lower cost and more efficient health care 
system by reducing high-cost emergency care, increasing lower-cost 
preventive care, and ultimately decreasing the number of DACA 
recipients and other impacted noncitizens who qualify only for the 
treatment of an emergency medical condition under Medicaid due to their 
immigration status, rather than more comprehensive coverage that may be 
available through the Exchange or a BHP.
    After thorough consideration of public comments, we are finalizing 
the inclusion of DACA recipients in the definition of ``lawfully 
present'' at 45 CFR 155.20(9) as proposed.
Out of Scope
    Comment: Several commenters stated general opposition to the 
current administration for its handling of both immigration and health 
care policy and reform, but without referring to the proposed rule at 
all. Some commenters stated direct opposition to specific political 
parties, and some stated they believe that this rule is a political 
maneuver to garner votes.
    Response: We appreciate these comments but note that these comments 
are out of scope as related to the provisions laid out in this rule and 
no response is required.
    Comment: Some commenters shared perspectives on DACA recipients' 
contributions to the workforce and economy and requests to create 
pathways for citizenship.
    Response: We appreciate these comments. This rule does not address 
the DACA policy itself, only the eligibility of DACA recipients for 
coverage under an Exchange or BHP. While these comments are related to 
the DACA policy broadly, they do not seek to support or change specific 
provisions set forth in the proposed rule and no response is required.
    Comment: Multiple commenters shared the challenges they faced 
seeking affordable health insurance, including as small business owners 
or low-income families, without referring to the substance of this 
rulemaking. Many commenters proposed other changes to the United States 
health care system or to other benefit programs such as the 
Supplemental Nutrition Assistance Program (SNAP).
    Response: We appreciate these comments and note commenter concerns 
and requests, but these topics are out of scope for this final rule.
    Comment: One public health system provider stated that they 
supported the rule's measures to enhance consumer protections, such as 
establishing an appeals process and extending the grace period for 
premium payments,

[[Page 39407]]

safeguarding the rights of consumers who face unforeseen circumstances.
    Response: We appreciate this comment but there were no specific 
proposals about an appeals process, grace periods for premium payments, 
or rights of consumers in unforeseen circumstances, so the comment is 
outside the scope of this rulemaking and no response is required.
2. Other Changes to the ``Lawfully Present'' Definition
    In addition to including DACA recipients in the definition of 
``lawfully present'' for the purposes of eligibility to enroll in a QHP 
through an Exchange and a BHP, we proposed 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 proposed 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 PRWORA at 8 U.S.C. 1641, are 
lawfully present. Throughout the proposed definition at 45 CFR 155.20, 
we proposed 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 proposed 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 noted in the preamble of the proposed rule 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, were 
not considered qualified noncitizens because the statutory provision at 
8 U.S.C. 1641(b)(8) making such individuals qualified noncitizens only 
applied with respect to the Medicaid program (88 FR 25317). Instead, 
COFA migrants were considered lawfully present under a different 
category, 45 CFR 152.2(2), that applied to noncitizens in a valid 
nonimmigrant status. After the proposed rule was issued, the Congress 
amended 8 U.S.C. 1641(b)(8) to eliminate the language restricting COFA 
migrants as qualified noncitizens only for purposes of the Medicaid 
program. The CAA, 2024,\71\ effective March 9, 2024, recognizes that 
COFA migrants would be qualified noncitizens, and, therefore, lawfully 
present for the purposes of our regulation as qualified noncitizens at 
45 CFR 152.2(1). COFA migrants will be considered lawfully present 
based on both sections 155.20(1) and 155.20(2) of this final rule.
---------------------------------------------------------------------------

    \71\ Div G, Title II, sec. 209(f), Public Law 118-42 (March 9, 
2024).
---------------------------------------------------------------------------

    In section II.D.2 of the proposed rule, we discussed whether to 
provide a more detailed definition of ``qualified noncitizen'' at 42 
CFR 435.4. Pending such comments, and to ensure alignment across our 
programs, we proposed 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.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters supported this proposal, noting that it aligned 
with CMS' effort to replace instances of ``alien'' in its current 
regulatory definition of ``lawfully present'' with ``noncitizen.''
    Response: We appreciate commenters' support for this proposal and 
note that no comments opposed this proposal. We understand that the 
term ``alien'' is outdated and has been ascribed with a negative, 
dehumanizing connotation, and we agree with commenters that the 
proposal to cross-reference the definition of ``qualified noncitizen'' 
at 42 CFR 435.4 aligns with our efforts to replace the term ``alien'' 
with ``noncitizen'' in our regulations. This is also consistent with 
DHS' replacement of the term ``alien'' with ``noncitizen'' wherever 
possible. Given that we are finalizing a more detailed definition of 
``qualified noncitizen'' at 42 CFR 435.4, CMS also believes that 
providing this cross-reference helps to promote transparency and 
maintain consistency across programs.
    Comment: One commenter noted that they supported cross-referencing 
to DHS regulations to the extent that it clarifies definitions and 
verifications but did not support cross-referencing if there is 
potential that the cross-reference changes the HHS definition of 
``lawfully present.'' The commenter stated that it should be made clear 
in any phrasing surrounding the cross-reference that DHS defines and 
regulates immigration statuses, which HHS uses and references, but that 
``lawful presence'' for the purpose of HHS regulation is determined by 
HHS, not DHS.
    Response: We generally agree with the commenter. We wish to clarify 
that we are not cross-referencing DHS' definition of ``lawfully 
present'' at 8 CFR 1.3 in the final rule. After considering public 
comments, we are adopting our own regulatory definition of ``lawfully 
present'' for purposes of eligibility to enroll in a QHP through an 
Exchange and the BHP.
    After consideration of public comments, we are finalizing 45 CFR 
155.20(1), which cross-references the definition of ``qualified 
noncitizen'' at 42 CFR 435.4, as proposed.
    In the current definition of ``lawfully present'' at 45 CFR 152.2, 
we include 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 the 
proposed rule, we proposed, in paragraph (2) of 45 CFR 155.20, to 
modify this language such that a noncitizen in a valid nonimmigrant 
status would be deemed lawfully present. We noted that determining 
whether an individual has violated the terms of their status is a 
responsibility of DHS, not CMS or States. Accordingly, as proposed, the 
change would ensure coverage of noncitizens in a nonimmigrant status 
that has not expired, as long as DHS has not determined those 
noncitizens have violated their status.
    Under the proposed change, Exchanges and BHPs would continue to 
submit requests to verify an applicant's nonimmigrant status through a 
data match with DHS via the Hub using DHS' Systematic Alien 
Verification for Entitlements (SAVE) system. If SAVE indicated that the 
applicant did not have an eligible immigration status, the applicant 
would not be eligible for coverage. This modification will simplify the 
eligibility verification process, so that a nonimmigrant's immigration 
status can be verified solely using the existing SAVE process, which 
can often provide verification in real time when an application is 
submitted and reduce the number of individuals for whom an Exchange or 
a BHP may need to request additional information. We note that 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 complexities of the various immigration statuses and 
regulations.
    We received public comments on this proposal. The following is a 
summary of

[[Page 39408]]

the comments we received and our responses.
    Comment: We received several comments in support of this change, 
with commenters noting that the existing language regarding whether a 
nonimmigrant has violated the terms of their status is confusing and 
that the changes proposed to this regulation will promote efficiency 
and consistency in eligibility determinations and verification 
processes. Commenters further noted that this would clarify that an 
individual's nonimmigrant status can be verified through DHS SAVE, 
streamlining eligibility verification processes and promoting program 
administration and integrity through alignment with DHS processes.
    Response: We appreciate commenters' perspectives on this proposal 
and agree that the wording changes will promote more efficient and 
consistent eligibility determinations.
    Comment: One commenter noted that CMS' proposal to adjust the 
language regarding nonimmigrant visa-holders to remove language 
relating to nonimmigrants not having violated the terms of their status 
would streamline eligibility determinations and verifications for COFA 
migrants who are otherwise eligible for Exchange coverage. Commenters 
stated that they supported proposed changes that would enable migrants 
under the COFA who are lawfully present as ``nonimmigrants'' to enroll 
in Exchange coverage.
    Response: We appreciate commenters' feedback on how this change may 
streamline immigration status verifications and benefit eligibility 
determinations for COFA migrants, who are and will continue to be 
considered ``lawfully present'' for purposes of health insurance 
coverage through an Exchange or a BHP as addressed in this rule, as 
COFA migrants are nonimmigrants under current regulations at 42 CFR 
152.2(2), and are both qualified noncitizens and nonimmigrants under 
the provisions finalized in this rule at 45 CFR 155.20(1) and (2), 
respectively. We agree that the change to remove language regarding 
whether a nonimmigrant has violated the terms of their status will 
streamline the eligibility and enrollment process for COFA migrants and 
other nonimmigrants, increasing access to health insurance through an 
Exchange or a BHP.
    We wish to further clarify that under our existing regulations, 
COFA migrants are considered ``lawfully present'' by virtue of their 
nonimmigrant status and are therefore currently eligible to enroll in a 
QHP or BHP. While the changes in this rule may provide additional 
clarity for COFA migrants and streamline the ability of CMS to verify 
their immigration status and determine benefit eligibility, nothing in 
this rule changes whether COFA migrants are considered eligible for the 
insurance affordability programs addressed in this rule.
    After consideration of public comments, we are finalizing 45 CFR 
155.20(2), pertaining to noncitizens in a valid nonimmigrant status, as 
proposed.
    We proposed 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) of 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 proposed 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) of 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.
    We did not receive public comments on these provisions, and 
therefore, we are finalizing 45 CFR 155.20(4) and 45 CFR 155.20(5) as 
proposed.
    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 
proposed to cross reference 8 CFR 274a.12(c) in its entirety to 
simplify the regulatory definition and verification process. We 
proposed this modification to the regulatory text to include all 
noncitizens who have been granted employment authorization 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 category, an application for such 
status or other immigration relief, or other basis. Almost all 
noncitizens granted employment authorization under 8 CFR 274a.12(c) are 
already considered lawfully present under existing regulations, either 
in paragraph (4)(iii) of the definition at 45 CFR 152.2 or within 45 
CFR 152.2 more broadly. We noted in the proposed rule that this 
modification would add 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 
categories act as a ``bridge'' to allow these noncitizens to maintain 
employment 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 
employment authorization under 8 CFR 274a.12(c) is beneficial because 
Exchanges and BHPs can verify that an individual has been granted 
employment authorization 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 will help to streamline and 
expedite verification of status for individuals who have been granted 
employment authorization under this regulatory provision.
    Further, to reduce duplication and confusion, we proposed to remove 
the clause currently in paragraph (4)(ii) of the definition at 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 received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: We received several comments in support of this change, 
with commenters agreeing that all individuals granted employment 
authorization under 8 CFR 274a.12(c) should be considered lawfully 
present, and that this change should simplify verification of lawful 
presence for impacted consumers.
    Response: We appreciate commenters' feedback and agree that this

[[Page 39409]]

modification will simplify the agency's benefit eligibility 
determinations and verification of lawful presence for individuals 
granted employment authorization.
    Comment: One commenter encouraged CMS to consider all individuals 
who are eligible to apply for employment authorization as ``lawfully 
present'' for the purposes of the programs addressed in this rule. The 
commenter suggested that a noncitizen's lawful presence should not 
depend on whether they have been granted employment authorization, as 
eligibility for employment authorization should signify lawful presence 
regardless of whether employment authorization has actually been 
granted. The commenter noted that considering individuals who are 
eligible for employment authorization would reduce administrative 
burden on eligibility determination agencies by no longer requiring 
agencies to determine whether an individual had applied for employment 
authorization and how long their application had been pending. The 
commenter noted that the current requirement to obtain employment 
authorization imposes burdens on individuals who may not otherwise need 
employment authorization, such as children and individuals with 
disabilities, who may also face accessibility barriers when applying 
for employment authorization. The commenter also pointed out that low-
income noncitizens may not be able to afford the fees required to apply 
for and obtain employment authorization, and that the waiting periods 
required before certain noncitizens can obtain employment authorization 
result in coverage and care delays.
    Response: We believe that the authority to determine whether an 
individual is eligible to apply for employment authorization rests with 
DHS, not CMS, Exchanges, or BHP agencies. We do not believe that it is 
appropriate or possible for Exchanges or BHP agencies to evaluate 
whether someone may be eligible to apply for employment authorization. 
We outline elsewhere in the rule why it is not appropriate for CMS, 
Exchanges, or BHP agencies to evaluate whether a nonimmigrant has 
violated the terms of their status, and that this is within DHS' 
purview. We believe that evaluating an individual's eligibility to 
apply for employment authorization is similarly within DHS' purview.
    Additionally, we do not agree that including individuals who are 
eligible to apply for employment authorization, but have not been 
granted employment authorization, in our definitions of ``lawfully 
present'' would reduce administrative burden. Requestors are not able 
to verify through SAVE whether an individual is eligible to apply for 
employment authorization in the same way that they can verify that an 
individual has been granted employment authorization through the SAVE 
system, which can be provided as a real-time step 1 response. 
Therefore, verifying that an individual is eligible to apply for 
employment authorization would require CMS, Exchanges, and BHP agencies 
to develop complex manual processes to evaluate eligibility on this 
basis.
    Furthermore, while having employment authorization can help 
facilitate verification, as we discussed above, virtually all 
noncitizens eligible for employment authorization under 8 CFR 
274a.12(c) are already lawfully present because of their underlying 
immigration category (e.g., deferred action), whether or not they 
obtain employment authorization. That underlying category can be 
determined for purposes of eligibility for the CMS programs, without 
the additional significant complexity of further trying to determine 
whether the noncitizen's category authorized them to apply for 
employment authorization on a case-by-case basis, and then trying to 
verify that. Therefore, this suggestion would add little substantive 
value in terms of actual expanded access to these programs, compared to 
the significant burden of trying to implement it by revising our 
definitions of ``lawfully present'' for purposes of health insurance 
through an Exchange or a BHP. While we have the authority to define 
``lawfully present'' for the purposes of our programs, we also intend 
to codify a definition of ``lawfully present'' that is aligned with 
DHS' conceptions of lawful presence as articulated at 8 CFR 1.3 to the 
extent practicable and appropriate for our programs, given DHS' deep 
expertise in this area.
    For these reasons, we are not finalizing a provision to include 
individuals who are eligible to apply for employment authorization in 
CMS definitions of ``lawfully present.''
    Comment: One commenter stated that CMS' proposal ran counter to the 
Congress's statutory scheme because the proposal considers noncitizens 
who are granted employment authorization under 8 CFR 274a.12(c) to be 
``lawfully present.'' The commenter noted that the Congress's 
definition of a ``qualified alien'' does not depend on whether an 
individual has been granted employment authorization by DHS. The 
commenter further noted that a grant of employment authorization does 
not confer lawful presence under either the INA or PRWORA, and that 
CMS' proposal is therefore contrary to law and should be withdrawn.
    Response: As previously stated, we are required under the ACA to 
consider individuals who are ``lawfully present'' as eligible to enroll 
in a QHP or a BHP, and the ACA, like the INA and PRWORA, does not 
provide a definition of ``lawfully present.''
    We agree that a grant of employment authorization does not result 
in an individual being considered a ``qualified alien'' under 8 U.S.C. 
1641(b) or (c). However, we are not proposing in this rule that an 
individual should be considered a ``qualified alien'' if they are 
granted employment authorization under 8 CFR 274a.12(c). Eligibility 
for enrollment in a QHP and for APTC and CSRs as well as BHP does not 
depend entirely on whether an individual is a ``qualified alien'' under 
PRWORA. This issue is discussed in further detail later in this 
section.
    We are acting consistent with our statutory authority by codifying 
a regulatory definition of ``lawfully present''' for use in determining 
eligibility for QHP and BHP coverage. We note that individuals granted 
employment authorization under 8 CFR 274a.12(c) are permitted to accept 
employment because DHS has determined that the individual has an 
immigration status or category that qualifies them for employment 
authorization under this subsection. Thus, we believe it is appropriate 
to include all individuals with such employment authorization because 
DHS has made an affirmative determination that the individual has an 
underlying immigration status or category that authorizes them to work 
legally in the United States.
    After consideration of public comments, we are finalizing the 
proposal at 45 CFR 155.20(6) to consider individuals granted employment 
authorization under 8 CFR 274a.12(c) as lawfully present, as proposed.
    We proposed a minor technical modification to the citation in 
paragraph (7) of the definition of ``lawfully present'' to describe 
Family Unity beneficiaries more accurately. Family Unity beneficiaries 
are individuals who entered the United States, 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.'' \72\

[[Page 39410]]

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 the proposed rule, we 
proposed to amend the ``lawfully present'' definition to include 
individuals who are granted benefits under section 1504 of the LIFE Act 
Amendments for consistency with DHS' policy to consider such 
individuals Family Unity beneficiaries.
---------------------------------------------------------------------------

    \72\ 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 and https://www.uscis.gov/sites/default/files/document/forms/i-817instr.pdf.
---------------------------------------------------------------------------

    We did not receive public comments on this provision, and 
therefore, we are finalizing 45 CFR 155.20(7) as proposed.
    As discussed previously, in paragraph (9) of the proposed 
definition of ``lawfully present'' at 45 CFR 155.20, we proposed 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. Please see section II.B.1 for a detailed discussion of the 
comments we received on this proposal.
    In paragraph (10) of the proposed definition of ``lawfully 
present'' at 45 CFR 155.20, we proposed to clarify that individuals 
with a pending application for adjustment of status to LPR are not 
required to have an approved immigrant visa petition to be considered 
lawfully present. We proposed 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 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. As proposed, the modification would 
simplify verification for these noncitizens, reduce the burden on 
States and individual applicants, and align with current DHS 
procedures.
    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: We received several comments in support of this change, 
with commenters noting that the existing requirement that individuals 
with a pending application for adjustment of status also have an 
approved visa petition unnecessarily includes family-based and other 
immigrants who are not required to have an approved visa petition when 
they apply to adjust their status. Commenters also noted that the 
proposed simplification will simplify eligibility verification 
processes, reduce administrative burden, and align with DHS procedures.
    Response: We agree that the current requirement that individuals 
with a pending application for adjustment of status also have an 
approved visa petition does not align with DHS policy or practice and 
believe that lifting this requirement will simplify verification of 
lawful presence for these consumers. We received no comments opposing 
this proposal.
    After consideration of public comments, we are finalizing 45 CFR 
155.20(10) as proposed.
    Paragraph (5) of the current definition of ``lawfully present'' 
pertains to applicants for asylum, withholding of removal, or 
protection under the regulations implementing U.S. obligations under 
the Convention Against Torture and Other Cruel, Inhuman, or Degrading 
Treatment or Punishment (hereinafter ``CAT''). In the proposed rule, we 
proposed 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. We noted that the proposed change was 
intended to reduce duplication and would not have a substantive impact 
on the definition of ``lawfully present.''
    We further proposed to remove the requirement in the current 
definition that individuals under age 14 who have filed an application 
for asylum, withholding of removal, or protection under CAT 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 employment authorization. We 
proposed to change this so that children under 14 are considered 
lawfully present without linking their eligibility to the 180-day 
waiting period for employment authorization. We noted in the proposed 
rule that children under age 14 generally are not permitted to work in 
the United States under the Fair Labor Standards Act,\73\ and 
therefore, the employment authorization 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 
\74\ pending application for asylum or related protection using DHS' 
SAVE system. As proposed, the modification captures the same population 
of children that was previously covered as lawfully present, without 
respect to how long their applications have been pending.
---------------------------------------------------------------------------

    \73\ See 29 CFR 570.2.
    \74\ See 8 U.S.C. 1101(b)(2) (definition of ``parent'').
---------------------------------------------------------------------------

    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: We received several comments in support of this change, 
with commenters supporting CMS' proposal to no longer require children 
under the age of 14 who are applicants for asylum, withholding of 
removal, or protection under CAT, to have had their application pending 
for 180 days before they can be considered ``lawfully present'' under 
CMS regulations. Commenters agreed with CMS' reasoning that while this 
waiting period was initially meant to parallel the amount of time an 
applicant must wait before pursuing employment authorization based on a 
pending asylum application, the waiting period held little significance 
for children who generally are not legally able to work and presented 
an unnecessary barrier to health coverage access.
    Commenters further cited significant physical and mental health 
care needs faced by children seeking asylum or humanitarian protection. 
Commenters cited studies finding that as many as 64 percent of child 
asylum seekers are

[[Page 39411]]

diagnosed with post-traumatic stress disorder (PTSD), as many as 75 
percent of child asylum applicants are suspected or diagnosed to have 
at least one significant mental health diagnosis, and children seeking 
asylum experience delays in obtaining basic preventive medical care 
like vaccines.
    Response: We agree with commenters that, in the context of 
eligibility for Exchange and BHP coverage, the 180-day waiting period 
for individuals who are lawfully present based on an application for 
asylum, withholding of removal, or protection under CAT, is not 
significant for children under the age of 14 because they would 
generally not be permitted to work in the United States. We agree with 
commenters that the 180-day waiting period could delay access to health 
coverage and care for this population.
    Comment: Some commenters further urged CMS to eliminate the 
requirement that applicants for asylum, withholding of removal, or 
protection under CAT who are age 14 and older obtain employment 
authorization to be considered lawfully present. Commenters noted that 
these applicants for humanitarian relief often have significant 
physical and mental health needs, and that eliminating this requirement 
would have a positive impact on access to health care, primarily for 
children and pregnant individuals. Commenters noted that this change 
could help reduce barriers for individuals who already may have limited 
access to Exchange coverage due to requirements to commit to filing a 
Federal income tax return and to project their income based on limited 
or no work experience.
    Response: We understand that some individuals who are age 14 and 
older obtain employment authorization for purposes beyond employment, 
such as for identification purposes. We are taking more time to 
evaluate and consider comments suggesting that the age at which 
applicants for these forms of humanitarian protection are required to 
have employment authorization be raised or eliminated. Specifically, we 
are evaluating the potential impacts of a change to the age 14 
requirement--as raised by commenters--on these applicants and on 
program integrity. The rulemaking process with regard to that portion 
of the proposal is ongoing. As a result, we are not finalizing any 
change to the age 14 requirement at this time.
    After consideration of public comments, we are finalizing the 
proposal at 45 CFR 155.20(12) to no longer require children under the 
age of 14 who are applicants for asylum, withholding of removal, or 
protection under CAT to have had their application pending for 180 days 
before they can be considered ``lawfully present,'' as proposed.
    In paragraph (13) of the proposed definition of ``lawfully 
present'' at 45 CFR 155.20, we proposed 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.\75\ Due to high demand for 
visas in this category, for many SIJ-classified noncitizens, it can 
take several years for a visa number to become available. SIJs are an 
extremely vulnerable population and as such, we proposed to close this 
unintentional gap so that all children with an approved petition for 
SIJ classification are deemed lawfully present.
---------------------------------------------------------------------------

    \75\ 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 based on a pending 
adjustment application (as with other categories of noncitizens 
seeking LPR status). The modification we proposed instead 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 or BHP, whether or not an individual 
with an approved SIJ petition has an adjustment application pending.
---------------------------------------------------------------------------

    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.\76\ 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 proposed 
paragraph (9) would cover individuals with approved SIJ petitions who 
cannot yet apply for adjustment of status, there may be a small number 
of SIJs with approved petitions who have not yet been considered for 
deferred action or for whom USCIS has declined to defer action. The 
proposed modification to paragraph (13) of the definition of ``lawfully 
present'' at 45 CFR 155.20 would capture individuals who have 
petitioned for or 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.
---------------------------------------------------------------------------

    \76\ U.S. Citizenship and Immigration Services. Policy Alert: 
Special Immigrant Juvenile Classification and Deferred Action. 
(2022). https://www.uscis.gov/sites/default/files/document/policy-manual-updates/20220307-SIJAndDeferredAction.pdf.
---------------------------------------------------------------------------

    We received public comments on this proposal. The following is a 
summary of the comments we received and our responses.
    Comment: CMS received several comments in support of this change, 
with commenters noting that SIJs are extremely vulnerable children and 
that updating this policy will correct the unintentional exclusion of 
individuals with an approved SIJ petition who have not yet been able to 
adjust to lawful permanent resident status and who are not otherwise 
covered under CMS definitions of lawfully present. Commenters noted 
that these children tend to have profound mental health needs. 
Commenters further noted that this change will streamline eligibility 
verifications for impacted individuals.
    Response: We agree with commenters that the current exclusion of 
certain individuals with an approved SIJ petition from our regulatory 
definitions is unintentional, and that this change will ensure that 
vulnerable children do not face unnecessary barriers to accessing 
health insurance coverage.
    After consideration of public comments, we are finalizing 45 CFR 
155.20(13) as proposed.
    We also proposed 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. Public comments on this proposal are discussed earlier in 
this section. After consideration of public comments, we are finalizing 
these nomenclature changes as proposed.
    We received general comments on the clarifications and technical 
adjustments to the definition of ``lawfully present'' at 45 CFR 155.20. 
The following is a summary of the comments we received and our 
response.
    Comment: Many commenters stated general support for CMS' proposals 
to make technical corrections further clarifying the definition of 
``lawfully present'' for other noncitizens, for purposes of these 
programs.

[[Page 39412]]

Commenters stated that the proposed technical changes would decrease 
operational burden on CMS programs. Commenters noted that these changes 
would be easier for noncitizen consumers to understand and would also 
make it easier for individuals and entities conducting outreach and 
enrollment assistance to assist immigrant consumers.
    Response: We appreciate commenters' support for making technical 
clarifications to our definition of ``lawfully present.'' We agree that 
these changes will result in simplifications to lawful presence 
verification operations that will have a positive impact on Exchanges, 
BHP agencies, and consumers. We also believe that these new policies 
will be easier for both consumers and consumer advocates to navigate, 
and we are committed to providing high-quality education and technical 
assistance on the policy changes in this rule for the many interested 
parties who assist immigrant communities with health coverage 
enrollment. We intend to begin providing such education and technical 
assistance after the publication date of this rule, in advance of the 
rule's November 1, 2024 effective date.
    We received several comments recommending additional modifications 
or clarifications to the definition of ``lawfully present'' in this 
rule. The following is a summary of the comments we received and our 
responses.
    Comment: One commenter recommended that CMS expand access to other 
noncitizen populations, such as nonelderly nonimmigrants, who make up 
one third of the nation's projected uninsured.
    Response: Our proposed definition of ``lawfully present'' included 
all nonimmigrants in a valid status or category regardless of age. 
These individuals would be eligible for Exchange or BHP coverage if 
they meet all other eligibility requirements for these programs.
    Comment: One commenter noted that immigrant crime victims who are 
permanently residing under color of law (PRUCOL) should be considered 
lawfully present and have the same extended ACA coverage.
    Response: Victims of qualifying crimes and certain family members 
who have been granted U nonimmigrant status under 8 U.S.C. 
1101(a)(15)(U) \77\ are already considered to be lawfully present for 
HHS insurance affordability programs as nonimmigrants. The 
classification of PRUCOL--describing any noncitizen living in the 
United States with the knowledge and consent of DHS, and whose 
departure DHS does not contemplate enforcing--is not used under the 
current law. Noncitizens under PRUCOL were previously eligible for 
certain public benefits, such as Medicaid, if they met all other 
eligibility requirements in the State plan. However, the PRWORA further 
limited eligibility so that noncitizens and individuals under PRUCOL 
could no longer be eligible for such benefits. Such individuals are not 
considered to be ``lawfully present'' under HHS health programs, unless 
they have another immigration status that is considered to be 
``lawfully present.'' Unlike the other categories of lawful presence 
discussed in this rule, PRUCOL is not an immigration classification 
recognized or verifiable by DHS, or otherwise supported by current 
Federal law. We are not expanding the definition of lawful presence to 
include PRUCOL in this final rule.
---------------------------------------------------------------------------

    \77\ Victims of Trafficking and Violence Protection Act of 2000, 
div. B., Violence Against Women Act of 2000 (VTVPA 2000), tit. V, 
Battered Immigrant Women Protection Act of 2000, Public Law 106-386, 
sec. 1513, 114 Stat. 1464, 1533-37 (2000), amended by Violence 
Against Women Department of Justice Reauthorization Act of 2005, 
tit. VIII, Public Law 109-162, 119 Stat. 2960 (Jan. 5, 2006), 
amended by Violence Against Women and Department of Justice 
Reauthorization Act--Technical Corrections, Public Law 109-271, 120 
Stat. 750 (Aug. 12, 2006), amended by TVPRA 2008, Public Law 110-
147, 122 Stat. 5044 (Dec. 23, 2008), amended by VAWA 2013, Public 
Law 113-4, 127 Stat. 110, 111-118, 140, 144, 156-159 (Mar. 7, 2013).
---------------------------------------------------------------------------

    Comment: One commenter encouraged CMS to amend the proposed 
definitions of ``lawfully present'' to consider individuals who have 
petitioned for a U visa as nonimmigrants to be lawfully present. The 
commenter noted that the U visa program provides immigration 
protections to victims of certain serious crimes, and that victims must 
submit a statement from a law enforcement official certifying that they 
have been helpful to the investigation of criminal activity to be 
eligible. The commenter further noted that there are currently years-
long delays for U visa petitioners to receive visas, employment 
authorization, or decisions relating to deferred action, and that these 
delays impact both principal U visa petitioners and their children.
    The commenter stated that such U visa petitioners are unlikely to 
be priorities for immigration enforcement and should therefore be 
considered ``lawfully present'' for purposes of the CMS programs 
addressed in this rule. The commenter noted that such a modification to 
CMS' definitions of ``lawfully present'' would align with Congressional 
intent to protect survivors of domestic violence, sexual assault, and 
human trafficking as stated in legislation including the Violence 
Against Women Act (VAWA), the Family Violence Prevention and Services 
Act (FVPSA) and the Victims of Crime Act (VOCA).
    The commenter further detailed the severe physical and mental 
health needs of U visa petitioners, who are likely to be survivors of 
domestic violence, sexual assault, human trafficking, and other forms 
of gender-based violence. The commenter cited adverse physical health 
effects of abuse including chronic pain, migraines and frequent 
headaches, sexually transmitted infections, and stomach ulcers. The 
commenter also noted that survivors of domestic and sexual violence 
tend to face chronic health issues including depression, alcohol and 
substance abuse, and HIV/AIDS, which can limit the ability of survivors 
to manage other chronic conditions like diabetes or hypertension. Given 
that U visa petitioners are likely to have many severe and complex 
health needs, the commenter stated that it is particularly important to 
ensure that this population has access to health insurance coverage.
    Response: We appreciate commenters' concern for U nonimmigrant 
status petitioners, and we recognize that such petitioners are a 
vulnerable population often with profound health care needs. Generally, 
applicants and petitioners for statuses or categories who do not have 
an underlying approved status or category are not considered to be 
lawfully present, except in very limited circumstances. We note that 
once an individual has deferred action, including under DHS policy or 
regulations providing deferred action to certain U nonimmigrant status 
petitioners in the United States with a pending bona fide petition,\78\ 
has been placed on the U nonimmigrant status waiting list,\79\ or has U 
nonimmigrant status, they are considered lawfully present under the 
deferred action or valid nonimmigrant part of the definition of 
``lawfully present'' at paragraphs (9) and (2), respectively.
---------------------------------------------------------------------------

    \78\ USCIS Policy Manual, Vol. 3, Part C, Chap. 5, available at 
https://www.uscis.gov/policy-manual/volume-3-part-c-chapter-5 (last 
visited July 27, 2023).
    \79\ 8 CFR 214.14(d)(2).
---------------------------------------------------------------------------

    Comment: One commenter urged HHS to consider expanding its 
definition of ``lawfully present'' to include all individuals 
regardless of their immigration status. The commenter noted that 
undocumented immigrants are typically barred from accessing

[[Page 39413]]

health coverage and health care despite performing essential jobs and 
services in their communities.
    Response: The ACA states that if an individual is not considered 
``lawfully present,'' the individual will not be treated as a qualified 
individual and may not be covered under a QHP. We believe that 
including all individuals regardless of their immigration status in the 
definition of ``lawfully present'' is beyond our regulatory authority 
without further legislative clarification.
    Comment: A few commenters encouraged CMS to include language in the 
final rule, or to release additional guidance, that supports States 
that are interested in pursuing section 1332 waivers to allow 
individuals who are not ``lawfully present'' to enroll in Exchange 
coverage or a BHP and access State-funded subsidies. Commenters noted 
that thus far only Washington State has pursued a section 1332 waiver 
to waive section 1312(f)(3) of the ACA to the extent it would otherwise 
require excluding certain State residents from enrolling in QHPs and 
qualified dental plans (QDPs) through the State Exchange and that other 
States may be interested in adopting similar policies.
    Response: We appreciate the commenters' suggestions regarding 
section 1332 waivers and will consider releasing additional guidance on 
the subject in the future. We note that BHP-eligible individuals must 
be lawfully present in the United States under section 1331(e)(1) of 
the ACA. Therefore, BHP Trust Funds may not be used toward BHP coverage 
for individuals who are not lawfully present. Additionally, section 
1331(e)(1) of the ACA is not a waivable provision under section 
1332(a)(2) of the ACA, and BHP Trust Funds may not be used to finance 
activities under a section 1332 waiver. We note, however, that there is 
no prohibition on using section 1332 waiver pass-through funding to 
fund State affordability programs (such as State subsidies) under the 
waiver plan for health insurance coverage for individuals not lawfully 
present, so long as the waiver plan meets the section 1332 statutory 
guardrails and other applicable requirements.
    Comment: One commenter stated that premium tax credits and cost-
sharing reductions to lower the cost of a QHP purchased through an 
Exchange constitute a ``Federal public benefit'' under PRWORA, and that 
such financial assistance may only be made available to individuals who 
are ``qualified aliens'' as defined under PRWORA.
    Response: We do not believe PRWORA's restriction on ``Federal 
public benefits'' to ``qualified aliens'' at 8 U.S.C. 1611(a) applies 
to the ACA. The ACA, enacted after PRWORA, directly addresses the 
question of which noncitizens are entitled to benefits or subsidies, 
and it does so through a framework that irreconcilably conflicts with 
the earlier statute's approach. In particular, the ACA restricts 
benefits and subsidies to noncitizens who are ``lawfully present''--a 
group that is, and was understood to be, more expansive than the group 
of ``qualified aliens.'' The specific approach that the Congress chose 
to apply to the particular benefits and subsidies created by the ACA 
overtakes the broader approach to ``public benefits'' in general in the 
earlier-enacted PRWORA.
    The ACA departed from PRWORA's restriction that only ``qualified 
aliens'' could receive covered benefits. Instead, in multiple 
provisions related to Exchanges, the Congress allowed various benefits 
or subsidies for individuals who were ``lawfully present in the United 
States.'' \80\ In fact, the ``lawfully present'' language is similar to 
the exceptions that the Congress used in 8 U.S.C. 1611(b)(2), (3), and 
(4) to permit certain non-qualified aliens to obtain Social Security, 
Medicare, and Railroad Retirement benefits.
---------------------------------------------------------------------------

    \80\ See 42 U.S.C. 18001(d)(1), 18032(f)(3), 18071(e), 
18081(a)(1), and 18082(d).
---------------------------------------------------------------------------

    The ACA did not expressly define ``lawfully present,'' but the 
legislative history supports that the ACA Exchanges and subsidies were 
intended to allow immigrants who are lawfully present in the United 
States, who are otherwise ineligible for Medicaid, to be eligible to 
receive tax credits and purchase coverage through Exchanges.\81\ In 
particular, the Congress was aware of the intersection and intended to 
depart from the PRWORA framework when enacting the ACA. The 
Congressional Research Service (CRS) has recognized that the ``lawful 
presence'' framework the Congress adopted in the ACA irreconcilably 
conflicts with PRWORA, stating:
---------------------------------------------------------------------------

    \81\ See 156 Cong. Rec. S2079 (2010) https://www.congress.gov/crec/2010/03/25/CREC-2010-03-25-senate.pdf.

    It is rather clear, for instance, that PRWORA does not restrict 
alien eligibility for the health benefits authorized in the Patient 
Protection and Affordable Care Act (ACA) of 2010. The ACA does not 
override PRWORA expressly but does extend eligibility to ``lawfully 
present'' aliens, a more expansive category than ``qualified 
aliens'' under PRWORA.\82\
---------------------------------------------------------------------------

    \82\ See CRS Report R46510, PRWORA's Restrictions on Noncitizen 
Eligibility for Federal Public Benefits: Legal Issues, by Ben 
Harrington (Sept. 3, 2020) https://crsreports.congress.gov/product/pdf/R/R46510.

    In a separate report, the CRS identified the ACA as an example of 
the establishment of ``clear rules for alien eligibility in the new 
legislation that conflict irreconcilably with PRWORA.'' \83\
---------------------------------------------------------------------------

    \83\ CRS Report LSB10526, PRWORA and the CARES Act: What's the 
Prospective Power of a ``Notwithstanding'' Clause? by Ben Harrington 
(July 27, 2020). https://crsreports.congress.gov/product/pdf/LSB/LSB10526.
---------------------------------------------------------------------------

    The ACA also expressly provides that noncitizens who are lawfully 
present but who are ineligible for Medicaid ``by reason of such alien 
status'' are considered eligible for PTCs \84\ and CSRs \85\ even if 
their household income is below the otherwise applicable threshold of 
100 percent of the FPL. This clearly demonstrates that the Congress 
intended and understood that the ``lawfully present'' standard 
applicable to APTC and CSRs was broader than the ``qualified alien'' 
standard applicable to Medicaid programs.
---------------------------------------------------------------------------

    \84\ 26 U.S.C. 36B(c)(1)(B).
    \85\ 42 U.S.C. 18071(b)(2).
---------------------------------------------------------------------------

    We previously issued regulations defining ``lawfully present'' for 
various ACA programs, specifically PCIP, Exchanges, and the BHP, that 
differed from the PRWORA restrictions and extended eligibility to a 
more expansive category than ``qualified aliens'' under PRWORA. As 
previously discussed in this rule, CMS first defined ``lawfully 
present'' as an eligibility criterion for purposes of PCIP shortly 
after the ACA's enactment, with regulations published in 2010 (75 FR 
45013). This definition of ``lawfully present,'' was later applied to 
eligibility for other ACA programs; regulations pertaining to Exchanges 
were issued in 2012 (77 FR 18309) and regulations pertaining to the BHP 
were issued in 2014 (79 FR 14111). In all of these regulations, 
consistent with direction from the Congress, CMS provided a definition 
of ``lawfully present'' that was more expansive than the definition of 
``qualified aliens'' under PRWORA. We are modifying these regulatory 
definitions of ``lawfully present'' for Exchanges and the BHP as 
described in this final rule.
    Comment: One commenter urged HHS to amend its regulatory definition 
of ``lawfully present'' for purposes of enrollment in a QHP through an 
Exchange, APTC, CSRs, and a BHP to exclude immigrants who do not have 
``lawful immigration status'' and who therefore ``may not be reasonably 
expected to be lawfully present in the United States for the duration 
of enrollment,'' as required by the ACA at 42 U.S.C. 18032(f)(3) and 42 
U.S.C. 18071(e)(2). The commenter further

[[Page 39414]]

specified that because recipients of deferred action, TPS, Deferred 
Enforced Departure (DED), and parole do not have a legal right to 
remain in the United States, CMS does not have a reasonable basis to 
assume that such individuals will remain lawfully present for the 
duration of their potential enrollment.
    One commenter agreed with CMS that ``lawful presence'' is a 
statutory term of art that is distinct from ``lawful status,'' and that 
it is a statutory prerequisite for receipt of certain benefits. The 
commenter suggested that DHS v. Regents found that lawful presence ``is 
not the same as forbearance nor does it flow inexorably from 
forbearance. Thus, while deferred action recipients have been 
designated lawfully present for purposes of Social Security and 
Medicare eligibility . . . agencies can also exclude them from this 
designation.'' \86\ The commenter stated that because lawful presence 
is ``context-dependent'' and ``there is no express definition of 
`lawfully present' . . . for all purposes,'' that CMS should exclude 
all recipients of deferred action, TPS, and DED from its regulatory 
definition of ``lawfully present'' for purposes of ACA benefits 
eligibility. The commenter noted that even if such individuals are 
considered ``lawfully present'' for other purposes, that the ACA's 
requirement that noncitizens be ``reasonably expected'' to be lawfully 
present for the duration of their QHP enrollment means that they must 
be excluded from the definition of ``lawfully present'' used to 
determine eligibility to enroll in a QHP.
---------------------------------------------------------------------------

    \86\ Dep't of Homeland Sec. v. Regents of the Univ. of 
California, 140 S. Ct. 1891, 1911 n.5 (2020).
---------------------------------------------------------------------------

    In arguing that TPS recipients cannot be reasonably expected to be 
lawfully present for the duration of their QHP enrollment, the 
commenter stated that TPS is a form of forbearance from removal 
proceedings. The commenter noted that under 8 U.S.C. 1254(a), the 
Secretary of Homeland Security is only authorized to designate a 
country for TPS for a period of up to 18 months. The commenter noted 
that while the Secretary is also authorized to extend a country's TPS 
designation, a country's TPS designation could end during the time 
period that a TPS recipient is enrolled in a QHP. The commenter further 
noted that DHS has authority to rescind prior TPS designations, and 
that TPS is not intended to provide long-term or permanent immigration 
status. In arguing that deferred action recipients, DED recipients, and 
parolees cannot be reasonably expected to be lawfully present for the 
duration of their QHP enrollment, the commenter noted that deferred 
action, DED, and parole do not provide legal immigration status or a 
right to remain in the United States, and such categories may be 
revoked or terminated at any time.
    The commenter further noted that the INA stipulates that, for 
parolees, ``when the purposes of such parole shall . . . have been 
served the alien shall forthwith return or be returned to the custody 
from which he was paroled and thereafter his case shall continue to be 
dealt with in the same manner as that of any other applicant for 
admission to the United States.'' \87\ The commenter acknowledged that 
the Congress did designate parolees who are paroled for periods of at 
least one year as ``qualified aliens'' for purposes of general Federal 
public benefits eligibility under 8 U.S.C. 1641(b), but noted that this 
standard does not apply to QHP eligibility, as the Congress specified 
the ``lawfully present'' standard in the ACA instead.
---------------------------------------------------------------------------

    \87\ 8 U.S.C. 1182(a)(5)(A).
---------------------------------------------------------------------------

    Response: We do not agree that deferred action, TPS, DED, and 
parole recipients cannot reasonably be expected to be lawfully present 
in the United States for the duration of enrollment as required by the 
ACA. More specifically, we do not agree with the assertion that we must 
exclude all recipients of deferred action, TPS, DED, and parole from 
our regulatory definition of ``lawfully present'' for purposes of ACA 
benefits eligibility to meet the ACA's requirement that individuals 
only be considered ``lawfully present'' as long as they are reasonably 
expected to be lawfully present for the duration of their enrollment. 
Our existing policy and operations, as well as the policies in this 
final rule, are in line with the ACA's statutory requirements.
    As the commenter indicated, the ACA requires both that individuals 
who are lawfully present be considered eligible to enroll in a QHP, and 
that individuals only be considered lawfully present if they are 
expected to be lawfully present for the duration of enrollment.
    As we noted in a 2012 rulemaking (77 FR 18309, 18350), we do not 
interpret the ACA's ``reasonably expected'' standard to mean that an 
applicant must be lawfully present for an entire coverage year. Rather, 
we noted that the lawful presence verification processes would address 
whether an applicant's lawful presence is time-limited, and if so, the 
Exchange would determine his or her eligibility for the period of time 
for which his or her lawful presence has been verified. We have 
verification processes in place for applicants whose immigration status 
or category is temporary and would be able to terminate enrollment for 
consumers in a hypothetical situation where their deferred action, TPS, 
DED, or parole designation expired, or was rescinded or terminated. 
Thus, Exchanges on the Federal platform currently balance these 
statutory directives by considering whether someone is lawfully present 
at the time of their application, and by generally requiring applicants 
whose immigration status or category is expiring within the next 90 
days to submit additional information demonstrating their continuing 
lawful presence.
    We note that many individuals in these categories have been in the 
United States for extended periods of time. For example, TPS recipients 
have been in the United States for 20 years, on average; we would be 
incorrect to assert that a TPS recipient was not ``reasonably 
expected'' to remain lawfully present during their Exchange enrollment 
solely on the basis of their receipt of TPS.\88\ We also clarify that 
the Supreme Court in DHS v. Regents in no way suggested that agencies 
could not consider deferred action recipients to be ``lawfully 
present.'' \89\ We note that we have considered recipients of deferred 
action under policies other than DACA--including TPS, DED, and parole--
to be ``lawfully present'' for purposes of eligibility for Exchange 
coverage since 2012 (77 FR 18309). For the reasons discussed here, we 
do not believe it is necessary or appropriate to exclude recipients of 
deferred action, TPS, DED, and parole from our definitions of 
``lawfully present.''
---------------------------------------------------------------------------

    \88\ Council on Foreign Relations. What is temporary protected 
status? (2023). https://www.cfr.org/backgrounder/what-temporary-protected-status.
    \89\ Dep't of Homeland Sec. v. Regents of the Univ. of 
California, 140 S. Ct. 1891, 1911 n.5 (2020).
---------------------------------------------------------------------------

3. Severability
    We proposed to add a new section at 45 CFR 155.30 addressing the 
severability of the provisions proposed in the proposed rule. In the 
event that any portion of a final rule is declared invalid, we intended 
that the various provisions of the definition of ``lawfully present'' 
be severable, and that the changes to the definition of ``lawfully 
present'' in 45 CFR 155.20 would continue even if some of the changes 
to any individual category are found invalid. The severability of these 
provisions, and the public comments we received on our proposal to add 
severability clauses, are discussed in detail in section III. of this 
rule.

[[Page 39415]]

C. Proposed Effective Date

    In the proposed rule, we had targeted a potential effective date of 
November 1, 2023 to align with the Open Enrollment Period for most 
individual market Exchanges. We were not able to establish a final rule 
prior to that date. However, we continue to believe that Open 
Enrollment is a critical 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, assisters, 
and other interested parties.
    We noted in the proposed rule that DACA recipients would qualify 
for the Special Enrollment Period (SEP) 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. Despite the 
availability of the SEP, we believed that proposing to align this 
rule's effective date with the individual market Exchange Open 
Enrollment Period would significantly increase the opportunity for 
individuals to enroll for coverage through the Exchange or a BHP due to 
the extensive 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 (75 days from November 1 through January 15 for 
Exchanges on the Federal platform) compared with an SEP (60 days from 
the effective date of the rule). Further, even though the individual 
market Exchange Open Enrollment Period is, among CMS insurance 
affordability programs, currently only applicable to Exchanges, we 
expressed in the proposed rule that it was important to align effective 
dates between Exchanges, BHP, Medicaid, and CHIP to promote 
consistency, and because eligibility for these programs is typically 
evaluated through a single application.90 91
---------------------------------------------------------------------------

    \90\ Pursuant to 42 CFR 600.320(d), a State operating a BHP must 
either offer open enrollment periods pursuant to Exchange 
regulations at 45 CFR 155.410 or follow Medicaid's continuous open 
enrollment process. As of April 1, 2024, only Minnesota currently 
operates a BHP, and it follows Medicaid's continuous open enrollment 
process.
    \91\ See 42 CFR 435.907, 42 CFR 457.330, and 45 CFR 155.405 for 
requirements related to a single streamlined application for all 
insurance affordability programs.
---------------------------------------------------------------------------

    While we are not finalizing a definition of ``lawfully present'' 
for purposes of Medicaid and CHIP eligibility at this time for the 
reasons detailed in section I, we believe that this rule will still 
have positive health and financial benefits for DACA recipients and 
other impacted noncitizens who may be eligible in an Exchange or a BHP, 
as detailed in section II.B.1 and II.B.2. While this final rule will 
result specifically in changes to the Exchange and BHP definitions of 
``lawfully present,'' we believe that any negative effects of the 
resulting misalignment following the rule's effective date are 
outweighed by the expected positive impacts of the rule.
    In the proposed rule, we sought comment on the feasibility of the 
November 1, 2023 proposed target effective date and whether to consider 
a different target effective date. We noted our commitment to working 
with State agencies and providing technical assistance regarding 
implementation of these proposed changes, if finalized. We also 
acknowledged, as outlined above, that State Medicaid and CHIP agencies 
were experiencing a significant increase in workload to ``unwind'' 
(i.e., to return to regular eligibility renewal operations) following 
the expiration of the continuous enrollment condition in section 
6008(b)(3) of the FFCRA on March 31, 2023.\92\ We sought 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 the proposed rule's target effective date of November 
1, 2023 has passed, similar considerations regarding feasibility and 
State impacts are still relevant.
---------------------------------------------------------------------------

    \92\ See CMS, SHO # 23-002, ``Medicaid Continuous Enrollment 
Condition Changes, Conditions for Receiving the FFCRA Temporary FMAP 
Increase, Reporting Requirements, and Enforcement Provisions in the 
Consolidated Appropriations Act, 2023,'' January 27, 2023, available 
at https://www.medicaid.gov/media/149291; Additional guidance for 
State Medicaid and CHIP agencies is available at https://www.medicaid.gov/unwinding.
---------------------------------------------------------------------------

    We received public comments on this proposed target effective date. 
The following is a summary of the comments we received and our 
responses.
    Comment: The majority of comments that CMS received supported the 
November 1, 2023 effective date and noted the benefits of aligning with 
the individual market Exchange Open Enrollment Period and related 
education and outreach activities. One commenter, a State department of 
insurance, stated that aligning with such outreach would support 
ongoing efforts to lower rates of uninsurance.
    Response: We agree that it is important for impacted noncitizens 
and other interested parties, such as enrollment assisters, that this 
rule be implemented in time to align with the individual market 
Exchange Open Enrollment period to maximize enrollment in health 
coverage for impacted noncitizens who will be affected by the final 
rule. Given that the initially proposed effective date of November 1, 
2023 has now passed, we believe that aligning the effective date of 
this rule with the individual market Exchange Open Enrollment Period on 
November 1, 2024 will help ensure that the maximum number of newly 
eligible impacted noncitizens are able to seamlessly enroll in coverage 
through the Exchange or BHP. CMS plans to leverage existing channels 
for outreach and education utilized during the individual market 
Exchange Open Enrollment Period to ensure that impacted noncitizens are 
aware that they may be eligible for coverage. We appreciate commenters' 
perspectives on the feasibility of operationalizing the changes in this 
rule by the initially proposed effective date of November 1, 2023, and 
we are committed to assisting our partners and interested parties with 
their implementation efforts. CMS is finalizing an effective date of 
November 1, 2024, for Exchanges and the BHP and, as described in 
section I, is not finalizing the proposed definition of ``lawfully 
present'' for Medicaid and CHIP agencies at this time.
    Comment: We received some comments urging the agency to adopt an 
earlier effective date than November 1, 2023. These comments varied in 
proposed effective date. Some commenters, including advocacy 
organizations, professional trade associations, and State government 
agencies, urged us to consider the rule effective upon publication in 
the Federal Register. Other commenters recommended that the rule take 
effect 30 days after publication in the Federal Register. Commenters 
that supported an earlier effective date noted the importance of making 
health insurance affordability programs available to impacted 
noncitizens as quickly as possible, and noted that they did not believe 
it was necessary to wait for the individual market Exchange Open 
Enrollment Period given that Exchange applicants would qualify for an 
SEP and that Medicaid, CHIP, and BHP currently allow for year-round 
enrollment.\93\ One

[[Page 39416]]

health care organization emphasized the importance of finalizing the 
rule as soon as possible given the uncertain future of the DACA policy. 
One commenter urged CMS to implement the final rule as quickly as 
possible, ideally by the upcoming SEP.
---------------------------------------------------------------------------

    \93\ See 42 CFR 600.320(d). Pursuant to 42 CFR 600.320(d), a 
State operating a BHP must either offer open enrollment periods 
pursuant to Exchange regulations at 45 CFR 155.410 or follow 
Medicaid's continuous open enrollment process. As of April 1, 2024, 
only Minnesota currently operates a BHP and it follows Medicaid's 
continuous open enrollment process.
---------------------------------------------------------------------------

    Response: We note commenters' interest in seeing the rule 
implemented as soon as possible, and we agree that DACA recipients and 
other impacted noncitizens should be able to access the Exchange or BHP 
coverage for which they will be eligible as soon as possible. However, 
we also acknowledge the importance of giving Exchanges, including 
Exchanges on the Federal platform and State Exchanges operating their 
own platforms, BHPs, assisters, and other entities who support 
enrollment in Exchange and BHP coverage sufficient time to prepare for 
the changes in this rule. Given the time required for us to closely 
review and respond to all public comments received and to develop the 
operational changes required to implement the rule's provisions, we do 
not believe it is feasible for Exchanges on the Federal platform to 
implement this rule prior to its effective date on November 1, 2024. We 
acknowledge that some DACA recipients will be eligible under this final 
rule for a BHP (we estimate that 1,000 DACA recipients will enroll in 
BHP), to which the individual market Exchange Open Enrollment Period 
does not currently apply.\94\ However, BHPs will also need to make 
operational changes as a result of this rule, and we believe that a 
November 1, 2024 effective date will allow BHPs sufficient time to 
implement the operational changes required.
---------------------------------------------------------------------------

    \94\ Pursuant to 42 CFR 600.320(d), a State operating a BHP must 
either offer open enrollment periods pursuant to Exchange 
regulations at 45 CFR 155.410 or follow Medicaid's continuous open 
enrollment process. The one State that currently operates a BHP, 
Minnesota, follows Medicaid's continuous open enrollment process.
---------------------------------------------------------------------------

    CMS also acknowledges that DACA recipients and other impacted 
noncitizens who are newly considered to be lawfully present as a result 
of this rule will qualify for an SEP; however, as stated previously, we 
are not able to effectively implement the rule with an effective date 
earlier than November 1, 2024. We are committed to working with 
impacted State Exchanges operating their own platforms and BHP agencies 
to provide technical assistance and educational materials to facilitate 
successful implementation of this rule.
    For the reasons detailed in section I., we are not finalizing a 
definition of ``lawfully present'' for purposes of Medicaid and CHIP 
eligibility at this time. We acknowledge that commenters urged us to 
ensure that DACA recipients and other impacted noncitizens would be 
able to access these programs as soon as possible. During this time, we 
believe that many DACA recipients and other impacted noncitizens who 
may have been eligible for Medicaid or CHIP under the policies in the 
proposed rule will instead be able to access coverage by enrolling in a 
QHP via the Exchange or BHP coverage.\95\
---------------------------------------------------------------------------

    \95\ DACA recipients who qualify to enroll in a QHP will 
generally be eligible for APTC and CSRs (subject to other 
eligibility requirements) even if their income is under 100 percent 
of FPL, as individuals who are lawfully present but ineligible for 
Medicaid due to their ``alien status'' may be eligible for APTC and 
CSRs. See 26 U.S.C. 36B(c)(1)(B) and 42 U.S.C. 18071(b)(2).
---------------------------------------------------------------------------

    For the commenter who urged us to implement the rule by the 
upcoming SEP, we believe that the commenter may have been referring to 
the individual market Exchange Open Enrollment Period; the benefits of 
aligning with the Exchange Open Enrollment Period are addressed above. 
Alternatively, this commenter may be referring to the SEP for 
individuals who lose Medicaid or CHIP coverage due to the end of the 
continuous enrollment condition in Medicaid, also referred to as the 
``Unwinding SEP.'' This SEP has been available on HealthCare.gov to 
consumers since March 31, 2023 and remains in effect.\96\ As noted 
previously, this final rule will be effective for the 2024 individual 
market Exchange Open Enrollment Period which will begin on November 1, 
2024.
---------------------------------------------------------------------------

    \96\ See https://www.medicaid.gov/resources-for-states/downloads/extn-sep-cnsmrs-lsg-chip-cvrg-adndm-faq.pdf.
---------------------------------------------------------------------------

    Comment: Many commenters agreed with CMS that DACA recipients and 
other impacted noncitizens would qualify for the existing SEP for 
individuals who are newly considered to be lawfully present for the 60 
days following the effective date of the rule. One nonprofit 
organization urged CMS to implement an SEP for DACA recipients that 
would last for 12 months after the effective date of the rule, to 
ensure that individuals have sufficient time to enroll.
    Response: Commenters are correct that noncitizens who are newly 
considered lawfully present under the definition in the final rule will 
qualify for the existing 60-day SEP for individuals who are newly 
lawfully present under 45 CFR 155.420(d)(3) as of the applicability 
date of the final rule. We acknowledge the suggestion that we make an 
extended SEP, greater than 60 days, available for this population. 
However, we believe that the individual market Open Enrollment Period 
and the existing 60-day SEP should give impacted noncitizens sufficient 
time to apply for and enroll in coverage. In our prior experience 
implementing changes to Exchange eligibility rules that align with the 
individual market Open Enrollment Period, such as changes related to 
employer-sponsored coverage affordability and premium tax credit 
eligibility (87 FR 61979), we are not aware of significant issues 
related to consumers having sufficient time to enroll. In nearly all 
situations where consumers become newly eligible to enroll in a QHP or 
for APTC or CSRs, we provide a 60-day SEP, and we believe that is 
generally an appropriate approach. Additionally, as indicated above, 
pursuant to 42 CFR 600.320(d), Minnesota's BHP has elected to follow 
Medicaid's continuous enrollment process and therefore an extended SEP 
would not apply to this population.
    We acknowledge that there may be unique challenges relevant to the 
consumers impacted by this rule, and we are committed to working with 
State Exchanges not on the Federal platform, BHPs, assisters, and 
community-based organizations to conduct targeted outreach to 
facilitate efficient enrollment processes for DACA recipients and other 
impacted noncitizens who may be eligible for coverage. We also note 
that some State Exchanges not on the Federal platform, including those 
in California and New Jersey, where an estimated 168,120 and 14,760 
DACA recipients live, respectively, have individual market Open 
Enrollment Periods that are longer than the one provided in the 
Exchanges on the Federal platform, giving consumers up to 90 days to 
enroll in a QHP.
    Comment: A minority of State Exchanges not on the Federal platform 
that commented on the rule raised concerns that the proposed effective 
date of November 1, 2023, may not be feasible. These commenters urged 
CMS to provide State Exchanges not on the Federal platform with 
flexibility on the timeframe for full implementation of the rule's 
provisions. Some of these commenters also stated concerns that changes 
would not be available for testing through the Federal Data Services 
Hub (hereinafter ``the Hub'') in a timely manner. Additionally, some 
commenters noted the importance of finalizing the rule as soon as 
possible, to give interested parties, including State Exchanges not on 
the Federal platform, assisters, and community-based organizations as 
much time as possible to prepare for the policy and operational changes 
in the rule prior to its effective date.

[[Page 39417]]

    Response: We acknowledge commenters' concerns about challenges with 
implementation of the provisions of this rule. To address these 
concerns, we plan to release technical guidance to State Exchanges not 
on the Federal platform and to BHP agencies to assist those agencies 
with implementing provisions of the rule. We are committed to 
supporting readiness for State Exchanges not on the Federal platform 
and BHP agencies, while also removing barriers to coverage for eligible 
individuals and supporting their enrollment through the Exchange or a 
BHP for which they are eligible. We will be available to work with 
State Exchanges not on the Federal platform and BHP agencies 
individually to facilitate their compliance by November 1, 2024.
    We also acknowledge the possibility that some State Exchanges not 
on the Federal platform may not be able to fully implement the 
provisions of this rule by the November 1, 2024 effective date. We 
further acknowledge that if State Exchanges are not able to implement 
by November 1, 2024, that there is a risk that DACA recipients and 
other impacted noncitizens could have limited opportunity to access QHP 
coverage through the SEP for which they are eligible under 45 CFR 
155.420(d)(3), given that the trigger event for the SEP is the November 
1, 2024 effective date of this rule and only provides 60 days after the 
triggering event to select a QHP. If a delay in State Exchange 
implementation results in newly eligible consumers being unable to 
enroll in coverage during their initial 60-day SEP window, State 
Exchanges could consider granting a pathway into QHP coverage for 
eligible applicants on a case-by-case basis under exceptional 
circumstances authority at 45 CFR 155.420(d)(9).
    Comment: A few commenters urged CMS to consider a later effective 
date than November 1, 2023 due to ongoing litigation concerning a 
separate DHS final rule. One nonprofit organization urged CMS to 
refrain from finalizing the rule and setting an effective date until 
the challenge to DACA in Texas v. United States, 50 F.4th 498 (5th Cir. 
2022), has reached a final disposition. The commenter further stated 
concern that pursuing this rulemaking while litigation continues could 
result in unnecessary expenditures and investment of staff time by DHS 
and HHS. A comment submitted by some State attorneys general urged CMS 
to postpone the effective date of the final rule pending judicial 
review.
    Response: We do not believe it is necessary to delay this final 
rule in its entirety pending a resolution of litigation concerning 
DHS's final rule. We are not finalizing a definition of ``lawfully 
present'' for purposes of Medicaid and CHIP eligibility at this time, 
for the reasons detailed in section I. Moreover, this rule makes other 
changes to the definitions of ``lawfully present,'' in 45 CFR 155.20 
and impacts other noncitizens in addition to DACA recipients.
    We acknowledge that current court orders prohibit DHS from fully 
administering the DHS DACA final rule (87 FR 53152). Those orders, 
however, have been subject to judicial stays since their issuance and, 
as a result, the DACA policy has remained in effect with respect to 
current DACA recipients. Additionally, the policies in this rule solely 
address eligibility for specific HHS health programs and are separate 
from DHS regulations. As described in detail throughout this rule, this 
rule reflects our independent statutory authority under the ACA to 
define ``lawfully present'' for purposes of eligibility to enroll in a 
QHP or the BHP.
    After careful consideration of public comments, we are finalizing 
November 1, 2024 as the effective date of this final rule. This means 
that, effective November 1, 2024, the definitions of ``lawfully 
present'' used to determine eligibility to enroll in a QHP, and for 
APTC and CSRs, as well as for the BHP, will no longer exclude DACA 
recipients and will also reflect the changes detailed in section 
II.B.2. The proposed definitions of ``lawfully present'' for Medicaid 
and CHIP are not being addressed in this final rule. For purposes of 
these programs, the definitions established in the 2010 SHO and 2012 
SHO will continue to apply.

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
    We proposed to define the term ``lawfully present'' at 42 CFR 435.4 
for Medicaid eligibility under the CHIPRA 214 option, consistent with 
the Exchange definitions described in the proposed rule at 45 CFR 
155.20, including the minor technical changes and clarifications to the 
lawfully present definition described in preamble section II.B.2 of 
this final rule. We also proposed to add a cross-reference to this 
definition at 42 CFR 457.320(c) for purposes of determining eligibility 
for CHIP under the CHIPRA 214 option. We proposed a definition of 
``lawfully residing'' in 42 CFR 435.4 to mirror the definition 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 residency rules. For CHIP, we also proposed to add 
a cross-reference at 42 CFR 457.320(c) to the ``lawfully residing'' 
definition at 42 CFR 435.4, except that States must comply with CHIP 
residency requirements at 42 CFR 457.320(e).
    Due to the reasons discussed in section I of this final rule, we 
are not finalizing a ``lawfully present'' definition for Medicaid and 
CHIP at this time. This means that for the definition of ``lawfully 
present'' used in determining eligibility for Medicaid and CHIP under 
the CHIPRA 214 option, the current policy, based on the 2010 SHO and 
the 2012 SHO, continues to apply.
    We received comments regarding the proposals to define the term 
``lawfully present'' for Medicaid and CHIP eligibility under the CHIPRA 
214 option. As we are continuing to consider and evaluate these 
comments, we are not providing our responses to comments in the final 
rule at this time. Comments that expressed general support for or 
opposition to the policies in the proposed rule without reference to a 
specific insurance affordability program have been addressed above in 
sections II.B.1 and II.B.2 with respect to Exchange and BHP coverage.
2. Defining Qualified Noncitizen
    Under our current Medicaid regulations, a ``qualified non-citizen'' 
is defined at 42 CFR 435.4, which includes an individual described in 8 
U.S.C. 1641(b) and (c). Similarly, 42 CFR 457.320(b)(6) defines a 
``qualified alien'' for CHIP with a cross-reference to section 431 of 
PRWORA, which is codified at 8 U.S.C. 1641. The definitions are 
currently used for determining Medicaid and CHIP eligibility under our 
regulations at 42 CFR 435.406 and 42 CFR 457.320, and the definition is 
also used when determining eligibility of individuals under the CHIPRA 
214 option. In the proposed rule, we considered 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 noted that we were considering whether the 
definition should be modified to expressly include all of the 
categories of noncitizens covered by 8 U.S.C. 1641(b) and (c), as well 
as additional categories of

[[Page 39418]]

noncitizens that Medicaid agencies are required to cover (if they meet 
all eligibility requirements in the State) as a result of subsequently 
enacted 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'' for certain purposes of eligibility for certain means 
tested benefit programs, including Medicaid and CHIP. Because refugees 
are listed in 8 U.S.C. 1641(b)(3) as a category of noncitizens who are 
``qualified aliens'' and are also exempt from the 5-year waiting period 
under 8 U.S.C. 1613, these noncitizens also are treated as qualified 
noncitizens for purposes of Medicaid and CHIP and are exempt from the 
5-year waiting period. In the proposed rule, we indicated that we were 
considering including these additional categories of noncitizens who 
are treated as refugees under other Federal statutes as specifically 
included in the definition of ``qualified noncitizen'' in 42 CFR 435.4, 
and we sought comment on this possibility. Examples of such noncitizens 
include victims of trafficking and certain Afghan and Ukrainian 
parolees.\97\ A full list can be found below in section II.D.2. of this 
rule. 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 
the proposed rule) were considered for the definition of qualified 
noncitizen for purposes of CHIP.
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    \97\ 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.
---------------------------------------------------------------------------

    We also noted in the proposed rule that there was at least one 
difference in how the term ``qualified noncitizen'' applies to Medicaid 
compared to the other programs discussed in the proposed rule. 
Specifically, we noted that COFA migrants were only considered 
``qualified aliens'' for purposes of the Medicaid program, under the 
Consolidated Appropriations Act, 2021.\98\ However, after the proposed 
rule was issued, Congress amended 8 U.S.C. 1641(b)(8) through CAA, 2024 
\99\ to remove the language that limited COFA migrants as qualified 
noncitizens only for purposes of the Medicaid program. Since CHIP is 
identified as a Federal public benefit as defined at 8 U.S.C. 
1611(c),\100\ COFA migrants are now considered qualified noncitizens 
for the purposes of CHIP eligibility. Further, CAA, 2024 amended 8 
U.S.C. 1613(b)(3) to expand the exception for COFA migrants from the 5-
year waiting period for all Federal means-tested public benefits, 
allowing immediate eligibility for CHIP effective March 9, 2024, if the 
individual meets all other eligibility requirements in the State plan. 
Since the new legislation supersedes our proposed rule, we will remove 
the proposed limitations considering COFA migrants from the definition 
of qualified noncitizen in this final rule.
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    \98\ Div. CC, Title II, sec. 208, Public Law. 116-260.
    \99\ Div. G, Title II, sec. 209(f), Public Law. 118-42.
    \100\ For a list of HHS programs that provide ``Federal public 
benefits,'' see 63 FR 41658 (Aug. 4, 1998).
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    We solicited comments on our proposal to add more detailed 
information to the definition of qualified noncitizen under Medicaid 
and CHIP to promote clarity, transparency, and administrative ease.
    We also proposed a nomenclature change to the definition of 
``citizenship,'' ``noncitizen,'' and ``qualified noncitizen'' in 42 CFR 
435.4 to remove the hyphen in the term ``non-citizen'' and use the term 
``noncitizen'' throughout those definitions. We proposed this change to 
ensure alignment with terminology used by DHS. We noted that these 
changes do not affect eligibility for Medicaid and CHIP programs and 
only streamline the use of terminology for clarity and administrative 
ease. We did not receive any public comments regarding those changes. 
We are finalizing the changes as proposed in 42 CFR 435.4.
    We received several public comments on our request to provide 
additional detail to the definition of qualified noncitizen used for 
Medicaid and CHIP at 42 CFR 435.4 and 42 CFR 457.320(c). No commenters 
opposed our proposal.
    Comment: Some commenters supported CMS' proposal to include a 
detailed definition of ``qualified noncitizen'' at 42 CFR 435.4 and to 
expressly list all the categories of noncitizens that Medicaid and CHIP 
agencies are required to cover. One commenter supported a definition 
that includes categories of noncitizens covered by 8 U.S.C. 1641(b) and 
(c), any additional categories that Medicaid agencies are required to 
cover as a result of subsequently enacted legislation not currently 
codified in Title 8, as well as a ``residual category that encompasses 
any statuses created by subsequent legislation or other changes to the 
statute after the proposed rule is finalized.''
    These commenters noted that codifying a clear definition of 
``qualified noncitizen'' would reduce confusion among individuals 
applying for Medicaid coverage, those helping them apply for coverage, 
and for Medicaid agencies.
    Response: We agree with commenters that including a detailed 
definition of ``qualified noncitizen'' in our regulations will help 
clarify our policy for beneficiaries, State Medicaid agencies, and 
other partners and interested parties, and we are including a 
definition of ``qualified noncitizen'' in the final rule at 42 CFR 
435.4, which is incorporated by cross reference in the CHIP regulations 
at 42 CFR 457.320(c).
    We are declining the commenter's suggestion to include a broad 
catchall category that would include future changes in statute. Adding 
a provision to accommodate potential future legislation would add 
ambiguity and uncertainty to the final rule that may be confusing for 
States that may be applying the regulation once it is effective. Should 
the Congress make further changes to the definition of qualified 
noncitizen, we will provide additional guidance.
    Comment: One nonprofit organization stated that CMS should include 
petitioners for U-visas in the definition of qualified noncitizen.
    Response: We do not have the statutory authority to include U 
nonimmigrant status petitioners in our definition of ``qualified 
noncitizen,'' because the definition of qualified noncitizen is based 
on PRWORA's definition of ``qualified alien'' at 8 U.S.C. 1641 and 
other specific statutory changes authorizing treatment of certain 
noncitizens as a ``refugee'' for purposes of Medicaid and CHIP 
eligibility, among other purposes. Neither the statutory definition at 
8 U.S.C. 1641 nor any other Federal statute expressly addresses U 
nonimmigrant status petitioners' treatment as a refugee or eligibility 
for Federal public benefits, nor is there a statute that includes 
nonimmigrants more broadly. Thus, we are not adopting the commenter's 
suggestion to include U visa petitioners in the definition of qualified 
noncitizen. See preamble section II.B.2 for additional information on 
the use of deferred action for certain U nonimmigrant status 
petitioners.

[[Page 39419]]

    Comment: A few commenters noted that they supported the proposed 
changes to expand eligibility for noncitizens who are treated as 
refugees, such as certain Afghan and Ukrainian parolees,\101\ which 
would enable these individuals to enroll in an Exchange plan, Medicaid 
and CHIP.
---------------------------------------------------------------------------

    \101\ See Section 2502 of the Extending Government Funding and 
Delivering Emergency Assistance Act, Public Law. 117-43 (Sept. 30, 
2021), as amended, and Section 401 of the Additional Ukraine 
Supplemental Appropriations Act, 2022, Public Law. 117-128 (May 21, 
2022).
---------------------------------------------------------------------------

    Response: We appreciate the support for including in the regulatory 
definition of ``qualified noncitizen'' both the noncitizens who are 
included in the definition of ``qualified alien'' under 8 U.S.C. 
1641(b) and (c) as well as the noncitizens who are treated as refugees 
for purposes of eligibility for Medicaid and CHIP under other Federal 
statutes, and we are including both groups of noncitizens in the 
definition at 42 CFR 435.4 and 42 CFR 457.320(c) of the final rule. We 
wish to clarify that the final rule does not expand eligibility for 
these noncitizens but merely expressly reflects in our regulations 
individuals who may be eligible for Medicaid and CHIP under existing 
statutes, including the expansion of CHIP eligibility for COFA migrants 
as authorized by CAA, 2024. Individuals who are treated as refugees 
under other Federal laws are already required by statute to be covered 
by State Medicaid and CHIP programs if the individual meets all other 
eligibility requirements in the State plan. Additionally, these 
individuals are included in the existing Exchange definition of 
``lawfully present'' as qualified noncitizens at 45 CFR 152.2(1), 
cross-referenced in our current regulation at 45 CFR 155.20 and 42 CFR 
600.5, and are therefore eligible for QHP and BHP coverage if they meet 
other eligibility requirements.
    Comment: One commenter requested that we include within the 
definition of ``qualified noncitizen'' a list of each category of human 
trafficking victims separately, while explaining that the list of 
subsections included is not exclusive. The commenter mentioned that 
Afghans, Ukrainians, and Iraqis should be specifically listed. The 
commenter further specified that CMS' definition of ``qualified 
noncitizen'' should include T visa holders, ``T visa applicants with 
bona fide determinations'' and HHS Office of Trafficking in Persons 
(OTIP) certifications, human trafficking victims who have been granted 
continued presence by DHS and receive OTIP certifications, and 
noncitizen child victims of human trafficking (sex or labor) with 
eligibility letters from OTIP.
    Response: We wish to clarify that victims of a severe form of 
trafficking in persons under the Trafficking Victims Protection Act of 
2000, Public Law 106-386 and family members of trafficking victims 
granted derivative T nonimmigrant status are considered qualified 
noncitizens because they are eligible for benefits and services to the 
same extent as refugees. 22 U.S.C. 7105(b). This statutory provision 
includes individuals who received a certification from HHS under 22 
U.S.C. 7105(b)(1)(E). A victim of a severe form of trafficking in 
persons may receive an HHS certification if they have complied with any 
reasonable request for assistance in the detection, investigation, or 
prosecution of the trafficking (or qualify for an exemption due to 
their age or an exception due to physical or psychological trauma) and 
have made a bona fide application for T nonimmigrant status or were 
granted continued presence by DHS. Such individuals who receive an HHS 
certification are included as individuals treated as refugees when 
meeting the requirements of 22 U.S.C. 7105(b). Additionally, we note 
that T nonimmigrants and T nonimmigrant status applicants who have set 
forth a prima facie case for such nonimmigrant status are considered 
qualified noncitizens under 8 U.S.C. 1641(c)(4). We are including these 
classifications of victims of trafficking and applicants for T 
nonimmigrant status in our revised definition of qualified noncitizen 
at 42 CFR 435.4 of this final rule.
    After consideration of public comments, we are including in our 
definition of ``qualified noncitizen'' in this final rule noncitizens 
who are considered ``qualified aliens'' under 8 U.S.C. 1641(b) and (c), 
and other immigration statuses and categories that are not included in 
the statutory definition of ``qualified aliens'' but whom the Congress 
has specifically authorized be treated as refugees for purposes of 
eligibility for certain benefits, including Medicaid and CHIP. 
Specifically, we are including the following noncitizens in the 
definition of ``qualified noncitizen'' in 42 CFR 435.4 of the final 
rule:
     Noncitizens who are victims of a severe form of 
trafficking in persons, who are eligible for Medicaid and CHIP to the 
same extent as refugees under section 107 of the Victims of Trafficking 
and Violence Protection Act of 2000 and the members of a trafficking 
victim's family who are granted derivative T nonimmigrant status, in 
accordance with 22 U.S.C. 7105(b)(1)(A);
     Iraqi and Afghan special immigrants, who are eligible for 
Medicaid and CHIP to the same extent as refugees under the National 
Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181, 
enacted January 28, 2008); the Omnibus Appropriations Act, 2009 (Pub. 
L. 111-8, enacted March 11, 2009); the Department of Defense 
Appropriations Act, 2010 (Pub. L. 111-118, enacted December 19, 2009); 
and the National Defense Authorization Act for Fiscal Year 2015 (Pub. 
L. 113-291, enacted December 19, 2014);
     Amerasian immigrants, who are treated the same as refugees 
for purposes of Medicaid and CHIP eligibility in accordance with a 
joint resolution making further continuing appropriations for the 
fiscal year 1988, and for other purposes (Pub. L. 100-202, enacted 
December 22, 1987);
     Certain Afghan parolees who are eligible for Medicaid and 
CHIP to the same extent as refugees in accordance with section 2502 of 
the Extending Government Funding and Delivering Emergency Assistance 
Act (Pub. L. 117-43 as amended, enacted September 30, 2021); and
     Certain Ukrainian parolees who are also eligible for 
Medicaid and CHIP to the same extent as refugees under section 401 of 
the Additional Ukraine Supplemental Appropriations Act (Pub. L. 117-128 
as amended, enacted May 21, 2022).
    We are also making a conforming technical change to 42 CFR 
435.406(2)(i) to replace the current cross-reference to ``qualified 
noncitizens'' as defined in section 431 of PRWORA (8 U.S.C. 1641) to 
the modified definition of ``qualified noncitizen'' at 42 CFR 435.4 
that is being finalized in this rule. Likewise, in response to public 
comments and to align CHIP with Medicaid and to include COFA migrants 
as qualified noncitizens for the purposes of CHIP eligibility as 
authorized by CAA, 2024, we have finalized a definition of ``qualified 
noncitizen'' for purposes of CHIP eligibility at 42 CFR 457.320(c), 
which cross references to the definition of ``qualified noncitizen'' at 
42 CFR 435.4. We are also finalizing an amendment at 42 CFR 
457.320(b)(6) to replace ``qualified aliens'' with ``qualified 
noncitizens'' and to replace the reference to section 431 of PRWORA 
with the new definition of ``qualified noncitizen'' at 42 CFR 
457.320(c).
    Comment: One commenter recommended that we include in the 
definition of ``qualified noncitizen'' other individuals who are 
required to be covered in Medicaid under the Federal statute at 8 
U.S.C. 1612(b) but are not considered qualified aliens under 8 U.S.C. 
1641 or treated as refugees under other Federal statutes (for example,

[[Page 39420]]

American Indians born in Canada or members of a Federally-recognized 
tribe, 8 U.S.C. 1612(b)(2)(E); 8 U.S.C. 1613(d)(1)). This commenter 
recommended that CMS include these additional individuals required to 
be covered by Medicaid in our revised definition of ``qualified 
noncitizen'' to promote clarity and transparency to the public 
specifying those individuals who must be covered in Medicaid, if 
meeting all other eligibility requirements.
    Response: We agree with the commenter that there are additional 
groups of noncitizens who are required to be covered in Medicaid under 
8 U.S.C. 1612(b)(2), but do not agree that these individuals are 
considered qualified noncitizens under 8 U.S.C. 1641. We also 
appreciate that there is some confusion regarding the noncitizens for 
whom coverage under Medicaid and CHIP is required. States are required 
to provide full Medicaid benefits to certain noncitizens under 8 U.S.C. 
1612(b)(2) if they meet all other eligibility requirements in the State 
plan. We are not adopting the commenter's suggestion to include these 
individuals in the definition of ``qualified noncitizen'' in 42 CFR 
435.4, as they are not qualified aliens under 8 U.S.C. 1641 or based on 
other Federal statutes. Moreover, we did not propose a rule that would 
identify all the individuals required to be covered in Medicaid under 8 
U.S.C. 1612(b).
    While we are not adopting a final rule, pursuant to the request for 
clarification, we are identifying in this preamble the individuals that 
States are required by statute to cover in Medicaid under 8 U.S.C. 
1612(b) and are exempt from the 5-year bar under 8 U.S.C. 1613.
    Under 8 U.S.C. 1612(b)(2)(A), States must cover for at least 7 
years refugees; asylees; noncitizens whose deportation is withheld 
under specified sections of the INA; Cuban and Haitian entrants; 
Amerasian immigrants; and other noncitizens treated as if they were 
refugees for purposes of Medicaid eligibility.
    Under 8 U.S.C. 1612(b)(2)(B), States are required to cover lawful 
permanent residents who have worked or can be credited with 40 
qualifying quarters, as defined under title II of the Social Security 
Act. Quarters worked either by the individual or his or her spouse or 
parents may be counted if certain conditions, described in 8 U.S.C. 
1612(b)(2)(B) and 8 U.S.C. 1645, are met. Under 8 U.S.C. 1612(b)(2)(C), 
States must provide full Medicaid coverage to all lawfully residing 
noncitizens who are an honorably discharged veteran or an active-duty 
service member in the United States Armed Forced as well as to spouses 
and dependent children of such individuals who meet all other 
eligibility requirements under the State plan.
    In accordance with 8 U.S.C. 1612(b)(2)(E) and (F), States must 
provide full Medicaid benefits to certain American Indians and 
noncitizens receiving SSI. Finally, in accordance with 8 U.S.C. 
1612(b)(2)(G), States must provide full Medicaid benefits to COFA 
migrants who live in one of the 50 States or the District of Columbia. 
Covering COFA migrants in the U.S. territories, including Puerto Rico, 
the Virgin Islands, Guam, the Northern Mariana Islands, and American 
Samoa is at the territory's option. All such individuals described in 8 
U.S.C. 1612(b)(2) must meet all other eligibility requirements in the 
State to be eligible for Medicaid coverage.
    Since CHIP is not a ``designated Federal program'' under 8 U.S.C. 
1612(b)(3), none of the individuals described in 8 U.S.C. 1612 are 
eligible for separate CHIP based on this statute, though some of these 
individuals may be eligible for CHIP under other statutes.

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.\102\ 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 FPL (or in the case of lawfully present noncitizens 
who are ineligible for Medicaid or CHIP due to immigration status, with 
household incomes between zero and 200 percent of the FPL) who are not 
otherwise eligible for other minimum essential coverage including 
Medicaid, CHIP, or affordable employer-sponsored coverage. As of April 
1, 2024, there is one State that operates a BHP--Minnesota.\103\
---------------------------------------------------------------------------

    \102\ See 42 U.S.C. 18051. See also 42 CFR part 600.
    \103\ Minnesota's program began January 1, 2015. New York's BHP 
program began April 1, 2015 and was suspended effective April 1, 
2024. 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. Oregon is proposing to implement a BHP effective 
July 1, 2024, and it is currently pending approval with CMS.
---------------------------------------------------------------------------

    In the proposed rule, we proposed 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 proposed 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 at 45 CFR 155.20. We noted that 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. We also 
noted that, if the proposals were finalized, the 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. While we are not finalizing a lawfully present definition for 
Medicaid or CHIP in this final rule for the reasons detailed in section 
I, we are finalizing a definition of ``lawfully present'' for purposes 
of BHP eligibility that will align the definitions used for Exchanges 
and for BHP.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: One nonprofit organization commenter noted that in 
Minnesota, a bill was recently passed to expand the State's BHP to all 
individuals who are otherwise eligible, regardless of immigration 
status, using State funds. The commenter notes that CMS' rule aligns 
with Minnesota's ongoing efforts to reduce uncompensated care costs and 
improve population health.
    Response: We appreciate this commenter's support for the rule's 
provisions to no longer exclude DACA recipients from eligibility for a 
BHP.
    Comment: Commenters noted and appreciated CMS' foresight to ensure 
that DACA recipients will be able to enroll in a BHP should other 
States choose this option in the future.
    Response: We agree that, should any other States elect to operate a 
BHP in the future, that DACA recipients in the State would be 
considered lawfully present for purposes of eligibility for the BHP. 
Since the proposed rule was published, Oregon has indicated that they 
intend to begin operating a BHP effective July 1, 2024, and the 
definition of ``lawfully present'' finalized in this rule will apply to 
Oregon's BHP which is currently pending approval with CMS.
    After consideration of public comments, we are finalizing the 
proposal to include a cross-reference to

[[Page 39421]]

45 CFR 155.20 at 42 CFR 600.5 as proposed.

III. Severability

    As described in the background section of this rule, the ACA 
generally \104\ requires that to enroll in a 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.\105\ The ACA also 
generally requires that individuals be ``lawfully present'' to be 
eligible for insurance affordability programs such as PTC,\106\ 
APTC,\107\ and CSRs \108\ for their Exchange coverage. Additionally, 
enrollees in a BHP are required to meet the same citizenship and 
immigration requirements as QHP enrollees.\109\ 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,\110\ and that CMS 
is required to verify that Exchange applicants are lawfully present in 
the United States.\111\
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    \104\ States may pursue a waiver under section 1332 of the 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 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 newly 
eligible for Exchange coverage under the waiver remain ineligible 
for PTC for their Exchange coverage. While neither Colorado nor New 
York requested a waiver of the ``lawfully present'' framework, both 
States are permitted to use pass-through funding based on Federal 
savings from their 1332 waivers to support programs covering 
immigrants who are ineligible for PTC. Colorado provides premium and 
cost-sharing subsidies to individuals earning up to 300 percent of 
FPL who are otherwise ineligible for Federal premium subsidies, 
including undocumented individuals. Under New York's section 1332 
waiver, some immigrants with household incomes up to 200 percent of 
FPL, including DACA recipients, will be eligible for coverage under 
the State's EP Expansion plan. Beginning August 1, 2024, DACA 
recipients with incomes up to 250 percent of FPL will also be 
eligible for coverage under the State's EP Expansion. For more 
information on the Colorado, Washington, and New York section 1332 
waivers, see https://www.cms.gov/cciio/programs-and-initiatives/state-innovation-waivers/section_1332_state_innovation_waivers-.
    \105\ 42 U.S.C. 18032(f)(3).
    \106\ 26 U.S.C. 36B(e)(2).
    \107\ 42 U.S.C. 18082(d).
    \108\ 42 U.S.C. 18071(e).
    \109\ 42 U.S.C. 18051(e).
    \110\ 42 U.S.C. 18032(f)(3), 42 U.S.C. 18071(e)(2).
    \111\ 42 U.S.C. 18081(c)(2)(B).
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    Since 1996, when the DOJ's Immigration and Naturalization Service 
issued an interim final rule defining the term ``lawfully present'' as 
used in the then-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). Given the lack of a statutory 
definition of ``lawfully present'' in the ACA and given the rulemaking 
authority granted to CMS under 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. As previously 
described, CMS' authority to remove the exclusion that treated DACA 
recipients differently from other noncitizens with deferred action 
under the definition of ``lawfully present'' for purposes of 
eligibility for health insurance through an Exchange and a BHP is 
supported by law and should be upheld in any legal challenge.
    Similarly, we are finalizing technical changes to the definition of 
``lawfully present'' for the purposes of eligibility for a QHP through 
an Exchange or a BHP, and we believe those changes are also well-
supported in law and practice and should be upheld in any legal 
challenge. We also believe that our exercise of our authority reflects 
sound policy.
    However, in the event that any portion of this final rule is 
declared invalid, we intend that the other changes to the definition of 
``lawfully present'' would be severable. For example, if a court were 
to stay or invalidate the inclusion of one provision in the definition 
of ``lawfully present,'' for purposes of eligibility for the Exchanges 
or the BHP, we intended the remaining features in sections II.B.1 and 
II.B.2 of this rule to stand. Likewise, CMS intends that if one 
provision of the changes to the definition of ``lawfully present'' is 
stayed or invalidated, that other provisions within this regulation be 
severable to the extent possible. For example, if one of the provisions 
discussed in section II.B.2 (Other Changes to the ``Lawfully Present'' 
Definition) of the proposed rule is stayed or invalidated, CMS intends 
that the other provisions discussed in that section be severable.
    Additionally, individual portions of this final rule have 
significant benefits and would be worthwhile in themselves. For 
example, a rule consisting only of the technical and clarifying changes 
in section II.B.2 of this final rule, applied through cross-reference 
to Exchanges and BHPs, would allow CMS and Exchanges to more 
effectively verify the lawful presence of noncitizens for purposes of 
eligibility for health insurance affordability programs. A rule 
consisting solely of the changes in section II.B.1 of this 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.
    In the proposed rule, we proposed a severability provision at 45 
CFR 155.30 indicating that the provisions regarding the definition of 
``lawfully present'' proposed at 45 CFR 155.20 were intended to be 
severable from each other, as well as from the definitions of 
``lawfully present'' and ``lawfully residing'' proposed at 42 CFR 
435.4. We also proposed a provision at 42 CFR 435.12 regarding the 
severability of the definitions of ``lawfully present'' and ``lawfully 
residing'' that were proposed at 42 CFR 435.4.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters stated support for CMS' inclusion of 
severability clauses in the rule. Commenters stated that they agreed 
with HHS that the proposed changes are well-supported in law and 
practice and that they reflect sound policy, but that they also 
recognized that the rule's changes are not dependent on each other and 
could be implemented independently.
    Response: We appreciate commenters' agreement that the changes in 
this rule are well-supported in law and practice. We further appreciate 
commenters' recognition that the provisions of this rule are not 
dependent on each other and could be implemented independently.
    After consideration of public comments, we are finalizing the 
severability clause at 45 CFR 155.30 as proposed, with one modification 
to no longer reference the definitions of ``lawfully present'' and 
``lawfully residing'' proposed at 42 CFR 435.4, given that we are not 
finalizing those definitions at this time. Because we are not 
finalizing definitions of ``lawfully present'' or ``lawfully residing'' 
at 42 CFR 435.4 at this time, we are also not finalizing the proposed 
severability clause that references those definitions at 42 CFR 435.12 
at this time. The rulemaking process with regard to these portions of 
the proposal is ongoing.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.),

[[Page 39422]]

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 solicited public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements.

A. Wage Estimates

    To derive average costs in the proposed rule, we used data from the 
U.S. Department of Labor'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).\112\ Since 
publishing the proposed rule, more recent data has become available, so 
we are modifying all salary estimates in this final rule to use BLS's 
May 2023 National Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 1 presents 
BLS's median hourly wage, our estimated cost of fringe benefits and 
overhead (calculated at 100 percent of salary), and our adjusted hourly 
wage.
---------------------------------------------------------------------------

    \112\ See 88 FR 25322 through 25323 for more information on the 
wage estimates used in the proposed rule.
[GRAPHIC] [TIFF OMITTED] TR08MY24.018

    For States and the private sector, employee hourly wage estimates 
have been adjusted by a factor of 100 percent to account for fringe 
benefits and other indirect costs. 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.'' \113\ We started 
with a measurement of the usual weekly earnings of wage and salary 
workers of $1,117.\114\ We divided this weekly rate by 40 hours to 
calculate an hourly pre-tax wage rate of $27.93. We adjusted 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 $23.18. We adopt this as our estimate of the hourly 
value of time for changes in time use for unpaid activities.
---------------------------------------------------------------------------

    \113\ Department of Health and Human Services, Office of the 
Assistant Secretary for Planning and Evaluation. ``Valuing Time in 
U.S. Department of Health and Human Services Regulatory Impact 
Analyses: Conceptual Framework and Best Practices.'' (2017) https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework.
    \114\ 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, 2023.
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B. Information Collection Requirements (ICRs)

1. ICRs Regarding Medicaid and CHIP
a. Medicaid and CHIP and the CHIPRA 214 Option (42 CFR 435.4 and 
457.320(c))
    Changes related to our Medicaid and CHIP proposals related to the 
CHIPRA 214 option were submitted to OMB for review under OMB Control 
Number 0938-1147 (CMS-10410). We are not finalizing these provisions at 
this time and as such, are not updating PRA burden estimates.
    We continue to consider the public comments on the Medicaid and 
CHIP proposals that we received; thus, we are not responding to these 
comments in the final rule at this time.
b. CHIP Changes Related to the CAA, 2024 (42 CFR 435.4 and 457.320(b))
    Since the time of the proposed rule, and as discussed earlier in 
this final rule, under the CAA, 2024 COFA migrants are now considered 
qualified noncitizens for the purposes of eligibility for CHIP, 
effective March 9, 2024, if they meet all other eligibility 
requirements for CHIP. This change does not impact Medicaid, Exchanges, 
or BHP. Therefore, we have updated our regulations to reflect the 
statutory change extending eligibility for CHIP to COFA migrants.

[[Page 39423]]

    The impact of this change will be very minimal and will impact only 
those States that have a separate CHIP, and that have not elected the 
CHIPRA 214 option for at least one population of pregnant individuals 
or children in their separate CHIPs. Since COFA migrants are already 
eligible for CHIP in States that have elected the CHIPRA 214 option, as 
reflected in a 2021 SHO letter,\115\ we only estimate impact for States 
with a separate CHIP that have not elected the CHIPRA 214 option. Using 
data from the GAO for the most recent year we could obtain,\116\ which 
estimated that the total US population of COFA migrants was 94,000, and 
then estimating how many may be living in States under the previously 
described conditions, we estimate approximately 12,225 COFA migrants 
live in States impacted by this change, primarily within six of those 
States. Accounting further for how many would actually be eligible 
under the remaining CHIP eligibility criteria, and then would seek to 
enroll, we believe the impact of this change to be very minimal. 
Therefore, and because this change is based on a statutory change and 
not the result of a policy in this final rule, we are not including 
more extensive burden estimates in this or section V. of this final 
rule.
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    \115\ See SHO #21-005, available at https://www.medicaid.gov/federal-policy-guidance/downloads/sho21005.pdf.
    \116\ Compacts of Free Association: Populations in U.S. Areas 
Have Grown, with Varying Reported Effects, June 2020, available at 
https://www.gao.gov/assets/gao-20-491.pdf.
---------------------------------------------------------------------------

2. ICRs Regarding the BHP (42 CFR 600.5)
    The following changes were submitted to OMB for review under OMB 
Control Number 0938-1218 (CMS-10510).
    In the proposed rule, we estimated a one-time burden of 200 hours 
at a cost of $18,863 for completing the necessary updates to a BHP 
application. We are modifying the estimates in this final rule to 
reflect the updated wage estimates as outlined in section IV.A of this 
final rule. We did not receive public comments on the method of 
deriving these burden estimates in the proposed rule, and we are 
therefore finalizing them using the proposed methodology with the 
updated wage estimates.
    The impact of completing the necessary changes to the BHP 
application is with regards to the two States that will operate BHPs as 
of the effective date of this rule--Minnesota and Oregon.\117\ Although 
Oregon's BHP is still pending CMS approval, we are including it in our 
estimate in order to best reflect which States we anticipate may be 
impacted when this rule becomes effective. We estimate that it will 
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.B.2 of this final rule. This estimate is based on past 
experience with similar system changes. To be conservative in our 
estimates, we assume 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 
State Exchange system may be the same for its BHP.
---------------------------------------------------------------------------

    \117\ Minnesota's BHP began January 1, 2015. Oregon's BHP is 
projected to begin July 1, 2024, and is pending CMS approval. New 
York suspended its BHP effective April 1, 2024. 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 $101.66 per hour and a 
computer programmer 75 hours at $95.88 per hour. In the aggregate, we 
estimate a one-time burden of 200 hours (2 States x 100 hours) at a 
cost of $19,465 (2 States x [(25 hours x $101.66 per hour) + (75 hours 
x $95.88 per hour)]) for completing the necessary updates to a BHP 
application.
    We note that the policies in this final rule will impose additional 
costs on BHP agencies to process the applications for individuals 
impacted by these policies. 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.B.3 of 
this final rule, which pertains to the streamlined application.
3. ICRs Regarding the Exchanges and Processing Streamlined Applications 
(45 CFR 152.2 and 155.20, and 42 CFR 600.5)
    The following changes were submitted to OMB for review under OMB 
Control Number 0938-1191 (CMS-10440).
    In the proposed rule, we estimated a one-time burden of 1,900 hours 
at a cost of $179,199 for completing the necessary updates to 
eligibility and enrollment platforms. We are modifying the estimates in 
this final rule to reflect the updated wage estimates as outlined in 
section IV.A of this final rule. As discussed previously, the changes 
to the definition of ``lawfully present'' will impact eligibility to 
enroll in a QHP through an Exchange and for APTC and CSRs. This change 
applies to the 18 State Exchanges not on the Federal platform, as well 
as the Federal Government, which will 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 will take the Federal 
Government and each of the State Exchanges not on the Federal platform 
100 hours in 2024 to develop and code the changes to their eligibility 
systems to correctly evaluate and verify eligibility under the 
definition of ``lawfully present'' that is revised to include DACA 
recipients and certain other limited groups of noncitizens as outlined 
in section II.B.2 of this final rule. We do not expect States operating 
SBE-FPs to incur any implementation costs related to Exchange 
eligibility and enrollment platform changes. These estimates are based 
on past experience with similar system changes.
    Of those 100 hours, we estimate it would take a database and 
network administrator and architect 25 hours at $101.66 per hour and a 
computer programmer 75 hours at $95.88 per hour. In aggregate for the 
State Exchanges not on the Federal platform, we estimate a one-time 
burden in 2024 of 1,800 hours (18 State Exchanges x 100 hours) at a 
cost of $175,185 (18 States x [(25 hours x $101.66 per hour) + (75 
hours x $95.88 per hour)]) for completing the necessary updates to 
State Exchange systems. For the Federal Government, we estimate a one-
time burden in 2024 of 100 hours at a cost of $9,733 ((25 hours x 
$101.66 per hour) + (75 hours x $95.88 per hour)). In total, the burden 
associated with all system updates will be 1,900 hours at a cost of 
$184,918.
    ``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 BHP and QHP 
enrollment, and those impacts are not reflected in the ICRs for BHPs,

[[Page 39424]]

discussed in section IV.B.2 of this final rule. In the proposed rule, 
we estimated that the total burden of application processing and 
assisting enrollees with Medicaid, CHIP, BHP, and QHP enrollment would 
be 34,000 hours for a total cost of $1,587,800, where the total burden 
on States would be 18,397 hours annually at a cost of $859,140, and the 
total burden on the Federal Government would be 15,603 hours annually 
at a cost of $728,660. We sought comment on these estimates and the 
methodology and assumptions used to calculate them. We are updating the 
estimates in this final rule to reflect that we are not finalizing the 
proposed changes for Medicaid and CHIP and that we have modified the 
estimates with the updated wage estimates as outlined in section IV.A 
of this final rule and the most recent available data on DACA 
recipients.
    For assisting additional eligible enrollees and processing their 
applications, we estimate this will take a government programs 
eligibility interviewer 10 minutes (0.17 hours) per application at a 
rate of $48.34 per hour, for a cost of approximately $8.22 per 
application. This estimate is based on past experience with similar 
application changes. As outlined further in section IV.B.4 of this 
final rule, we anticipate that approximately 147,000 individuals 
impacted by this final rule will complete the application annually. 
Therefore, the total application processing burden associated with the 
policies in this final rule will be 24,990 hours (0.17 hours x 147,000 
applications) for a total cost of $1,208,017 (24,990 hours x $48.34 per 
hour). As discussed further in this section, we anticipate that 
approximately 52 percent of the application processing burden will fall 
on States, while the remaining approximately 48 percent will be borne 
by the Federal Government. We estimate these proportions as follows.
    To start, we estimate the percentage of applications that will be 
processed for the Exchanges and BHPs. We assume that the proportion of 
applications that will be processed for each program will be equivalent 
to the proportion of individuals impacted by the policies in this final 
rule that would enroll in each program. As outlined in section V.C. of 
this final rule, we estimate that of the 100,000 individuals impacted 
by the policies in this rule, 99,000 will enroll in the Exchanges (99 
percent), and 1,000 (1 percent) in BHPs on average each year, including 
redeterminations and re-enrollments. Using these same proportions, out 
of the 147,000 applications anticipated to result from the policies in 
this final rule, we estimate 145,000 applications will be processed for 
the Exchanges, and 2,000 will be processed for 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. The entire information collection burden associated with 
changes to BHPs falls on the two States with BHPs--Minnesota and 
Oregon.\118\ As such, we assume 100 percent of the BHP application 
processing costs will fall on these two States. For the Exchanges, we 
use data from the 2024 Open Enrollment Period to estimate the 
proportion of applications that are processed by States compared to the 
Federal Government, and we determined that 49 percent of Exchange 
applications were submitted to FFEs/SBE-FPs, and are therefore 
processed by the Federal Government, while 51 percent were submitted to 
and processed by the 18 State Exchanges not on the Federal 
platform.\119\ As such, we anticipate that 49 percent of Exchange 
application processing costs will fall on the Federal Government and 51 
percent of Exchange application processing costs will fall on States 
using their own eligibility and enrollment platforms. We do not expect 
States operating SBE-FPs to incur any application processing costs as 
these applications, and the costs associated with them, will fall on 
the Federal Government.
---------------------------------------------------------------------------

    \118\ Minnesota's BHP began January 1, 2015. Oregon's BHP is 
projected to begin July 1, 2024, and is pending CMS approval. For 
more information, see https://www.medicaid.gov/basic-health-program/index.html.
    \119\ Centers for Medicare & Medicaid Services. (2024). 2024 
Open Enrollment Report. https://www.cms.gov/files/document/health-insurance-exchanges-2024-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. Using the per-application processing burden discussed 
earlier in this ICR (10 minutes, or 0.17 hours, per application at a 
rate of $48.34 per hour) for BHPs, if we estimate 2,000 applications 
will be processed, the burden for all of those will be borne by the 
States. Using the per-application processing burden of 10 minutes (0.17 
hours) per application at a rate of $48.34 per hour, this results in a 
burden of 340 hours, or $16,436, for States to process BHP 
applications. For the Exchanges, if we estimate 145,000 applications 
will be processed, 51 percent of those (73,950) will be processed by 
State Exchanges not on the Federal platform and 49 percent (71,050) 
will be processed by the Federal Government. Using the per-application 
processing burden of 10 minutes (0.17 hours) per application at a rate 
of $48.34 per hour, this results in a burden of 12,572 hours, or 
$607,706, for State Exchanges not on the Federal platform and 12,079 
hours, or $583,875, for the Federal Government.
    Therefore, the total burden on State Exchanges not on the Federal 
platform to assist eligible beneficiaries and process their 
applications will be 12,912 hours annually (340 hours for BHP + 12,572 
hours for State Exchanges not on the Federal platform) at a cost of 
$624,142, and the total burden on the Federal Government will be 12,079 
hours annually (entirely for Exchanges) at a cost of $583,875.
    We received public comments on the estimates outlined in the 
proposed rule. We are finalizing the proposed methodology of deriving 
these burden estimates with the updated wage estimates as outlined in 
section IV.A of this final rule and the most recent available data on 
DACA recipients and application processing. The following is a summary 
of the comments we received and our responses.
    Comment: Some State Exchanges stated concerns about whether they 
would be able to implement the rule's provisions by the November 1, 
2023 proposed effective date but did not express concern about the 
overall burden on State agencies of making systems changes or 
processing new applications for impacted populations.
    Response: We understand that some State Exchanges not on the 
Federal platform will need to make changes to their eligibility and 
enrollment systems to correctly determine eligibility for DACA 
recipients and the other individuals impacted by the revised lawfully 
present definition. We are committed to providing State Exchanges with 
technical assistance and any additional support needed to ensure that 
States are able to correctly determine eligibility for DACA recipients 
and other impacted noncitizens by this final rule's November 1, 2024 
effective date. We are also committed to working with State Exchanges 
not on the Federal platform and BHP agencies to identify any potential 
manual workarounds that may be needed to correctly determine 
eligibility prior to full systems changes being in place.
    Comment: Commenters noted that they expected that the technical 
changes made to the definition of lawfully present discussed in section 
II.B.2 of this final rule would reduce application processing burdens 
for State Exchanges in the future, given that they are

[[Page 39425]]

expected to make it easier for State Exchanges to verify applicants' 
lawful presence through DHS SAVE.
    Response: We agree that including DACA recipients and making the 
technical changes discussed in this rule will streamline application 
processing and make electronic verification of immigration status 
through SAVE more efficient, by both decreasing DHS' workload in 
verifying immigration status at Steps Two and Three, which require 
manual intervention, and by no longer requiring eligibility caseworkers 
to resubmit a request for additional information or provide additional 
documentation.
    After consideration of public comments, we are finalizing these 
burden estimates using the proposed methodology with the most recent 
available data as described above.
4. ICRs Regarding the Application Process for Applicants
    The following changes were submitted to OMB for review under OMB 
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.\120\ In the proposed rule, we assumed the burden of completing 
an Exchange application was essentially the same as applying with a 
State Medicaid or CHIP agency, and therefore we did not distinguish 
between these populations. In the proposed rule, we estimated the total 
annual additional burden on all individuals impacted by the proposed 
changes by completing the application or submitting documentation to 
verify their lawful presence would be approximately 163,000 hours with 
an equivalent cost of approximately $3,375,730. We sought comment on 
these burden estimates. We are updating the estimates in this final 
rule to reflect that we are not finalizing the proposed changes for 
Medicaid and CHIP and to reflect the most recent available data, which 
includes the updated wage estimates in section IV.A of this rule, and 
the most recent available data on DACA recipients and open enrollment.
---------------------------------------------------------------------------

    \120\ 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 will represent the majority of individuals impacted by this 
final 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 147,000 uninsured 
DACA recipients based on USCIS data on active DACA recipients (545,000 
in 2023) \121\ and a 2022 survey by the National Immigration Law Center 
stating that 27 percent of DACA recipients are uninsured,\122\ and we 
assume that 100 percent of uninsured DACA recipients will apply for 
coverage.\123\ As such, we anticipate that approximately 147,000 
individuals impacted by the proposals in this rule will complete the 
application annually.
---------------------------------------------------------------------------

    \121\ Count of Active DACA Recipients by Month of Current DACA 
Expiration as of September 30, 2023. U.S. Citizenship and 
Immigration Services. https://www.uscis.gov/sites/default/files/document/data/active_daca_recipients_fy23_q4.pdf.
    \122\ National Immigration Law Center. DACA Recipients' Access 
to Health Care: 2023 Report. (2023) https://www.nilc.org/wp-content/uploads/2023/05/NILC_DACA-Report_2023.pdf.
    \123\ While some individuals impacted by the changes in this 
final rule may not apply for coverage, we are unable to quantify the 
proportion of uninsured DACA recipients who would choose not to 
apply. Because uninsured DACA recipients would likely benefit from 
becoming insured, we assume 100 percent of DACA recipients will 
apply for coverage.
---------------------------------------------------------------------------

    In the existing information collection request for this application 
OMB Control Number 0938-1191, we estimate that the application process 
will 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.\124\ We estimate that of the 147,000 
individuals impacted by the proposed changes, 98 percent will be 
applying for insurance affordability programs and 2 percent will 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 final rule (at an hourly 
rate of $23.18), 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 $11.47. 
The total annual additional burden on the 147,000 individuals impacted 
by the changes in this final rule will be approximately 72,765 hours 
with an equivalent cost of approximately $1,686,693.
---------------------------------------------------------------------------

    \124\ 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 analysis to reflect that nearly all 
applicants would apply using the electronic application.
---------------------------------------------------------------------------

    As stated earlier in this final rule, Exchanges and BHP agencies 
will require individuals completing the application to submit 
supporting documentation to confirm their lawful presence if they are 
unable to be verified electronically. An applicant's lawful presence 
may not be able to be verified electronically if, for example, the 
applicant opts to not include information about their immigration 
documentation, such as their alien number or Employment Authorization 
Document (EAD) number, when they fill out the application. We estimate 
that of the 147,000 individuals impacted by the changes as finalized, 
approximately 54 percent (or 79,380) of applicants will be able to have 
their lawful presence electronically verified, and the remaining 46 
percent (or 67,620) of applicants will be unable to have their lawful 
presence electronically verified and will therefore have to submit 
supporting documentation to confirm their lawful presence.\125\ We 
estimate that a consumer will, 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 final rule (at an hourly rate of $23.18), the 
opportunity cost for an individual to complete this task is estimated 
to be approximately $23.18. The total annual additional burden on the 
67,620 individuals impacted by the changes finalized in this rule who 
are unable to electronically verify their lawful presence and therefore 
need to submit supporting documentation will be approximately 67,620 
hours with an equivalent cost of approximately $1,567,432.
---------------------------------------------------------------------------

    \125\ 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 147,000 individuals impacted by this 
rule, the annual additional burden of completing the application will 
be 0.495 hours per individual on average, which totals to 72,765 hours 
at a cost of $1,686,693. For the 67,620 individuals who are unable to 
have their lawful presence electronically verified, the total annual 
burden of submitting documentation to verify their lawful presence will 
be 67,620 hours at a cost of $1,567,432. Therefore, the average annual 
burden per respondent will be 0.955 hours ((0.495 hours x 54 percent of 
individuals) + (1.495 hours x 46 percent of individuals)), and the 
total annual

[[Page 39426]]

burden on all of these individuals impacted by the proposed changes in 
this rule will be 140,385 hours at a cost of $3,254,124.
    We received public comments on the estimates outlined in the 
proposed rule. As previously mentioned, we are updating the estimates 
in this final rule to reflect that we are not finalizing the proposed 
changes for Medicaid and CHIP and to reflect the most recent available 
data. The following is a summary of the comments we received and our 
responses.
    Comment: One commenter agreed with CMS' assumption that regardless 
of where an individual applies, the burden of completing an application 
is essentially the same. The commenter further affirmed CMS' statement 
that, as required by the ACA, there is generally one application 
through which individuals may apply for health coverage in a QHP 
through an Exchange and for other insurance affordability programs like 
a BHP.
    Response: We agree that the burden of completing an application is 
essentially the same regardless of whether the individual was to apply 
directly with their BHP agency or with an Exchange. As we are not 
finalizing our proposals related to Medicaid and CHIP at this time, 
there will not be a change in the application process for Medicaid and 
CHIP.
    Comment: One commenter stated that the changes in the rule ``will 
not result in an increased application burden for impacted 
individuals.''
    Response: We have considered this comment and continue to believe 
that the burden estimates associated with the policies in this final 
rule are reasonable and in line with the burden estimates in the 
currently approved PRA package OMB Control Number 0938-1191. However, 
we acknowledge that the actual application burden may vary depending on 
the applicant. We are hopeful that the changes in this rule will not 
overburden individuals in the application process. Additionally, we 
clarify that as discussed earlier in this ICR section, we submitted the 
burden changes associated with this ICR to OMB for review under OMB 
Control Number 0938-1191.
    After consideration of public comments, we are finalizing these 
burden estimates using the methodology as proposed with the most recent 
available data.

C. Burden Estimate Summary
[GRAPHIC] [TIFF OMITTED] TR08MY24.019

V. Regulatory Impact Analysis

A. Statement of Need

    This final rule updates the definition of ``lawfully present'' in 
our regulations for certain CMS programs. 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. In 
addition, we are removing the exception for DACA recipients from the 
definitions of ``lawfully present'' used to determine eligibility to 
enroll in a QHP through an Exchange or a BHP, and we are instead 
treating DACA recipients the same as other deferred action recipients. 
We are also finalizing some modifications to the ``lawfully present'' 
definition currently at 45 CFR 152.2 that incorporate additional 
detail, clarifications, and some technical modifications for the 
Exchanges and BHPs. We are not finalizing changes to the Medicaid and 
CHIP programs with respect to the definitions of ``lawfully present'' 
at this time.

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), Executive Order 14094 on Modernizing Regulatory 
Review (April

[[Page 39427]]

6, 2023), 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), 
Executive Order 13132 on Federalism (August 4, 1999), and the 
Congressional Review Act (5 U.S.C. 804(2)).
    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, as amended by Executive Order 14094, 
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 will 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 a regulatory impact analysis (RIA) 
that to the best of our ability presents the costs and benefits of the 
rulemaking. Therefore, OMB has reviewed these final regulations, and we 
have provided the following assessment of their impact.
    Pursuant to Subtitle E of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (also known as the Congressional Review Act, 5 
U.S.C 801 et seq.), OIRA has determined that this rule does meet the 
criteria set forth in 5 U.S.C. 804(2). Accordingly, this rule has been 
submitted to each House of the Congress and to the Comptroller General 
a report containing a copy of the rule along with other specified 
information.

C. Detailed Economic Analysis

    We prepared the economic impact estimates utilizing a baseline of 
``no action,'' comparing the effect of the policies against not 
finalizing the rule at all.
    This analysis reviews the amendments finalized under 42 CFR 600.5, 
and 45 CFR 152.2 and 155.20, which will add the following changes to 
the definition of lawfully present by making technical modifications to 
add the following new categories of noncitizens to this definition via 
this regulation:
     Those granted deferred action under DACA;
     Those granted employment authorization under 8 CFR 
274a.12(c)(35) and (36);
     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 protection under CAT 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
     Individuals with an approved petition for SIJ 
classification.
    The amendments finalized under 42 CFR 600.5 and 45 CFR 152.2 and 
155.20 will 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 CAT protection 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 employment authorization under 8 CFR 
274a.12(c), as these individuals are already covered elsewhere, with 
the exception of a modest expansion to those granted employment 
authorization under 8 CFR 274a.12(c)(35) and (36), discussed earlier in 
this final rule.
    In these respects, the technical modifications that do not relate 
to DACA recipients contained in this rule are generally technical 
changes or revisions to simplify verification processes, and therefore, 
we anticipate a modest impact on individuals' eligibility as a result 
of these changes. We sought comment on estimates or data sources we 
could use to provide quantitative estimates for the benefit to these 
individuals. The proposed regulation also adds those granted deferred 
action under DACA to the definition. As noted further in this section, 
we estimate that 100,000 DACA recipients will enroll in health coverage 
and benefit from the proposals in this rule.\126\ We are 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, or individuals granted employment 
authorization under 8 CFR 274a.12(c)(35) or (36) that could enroll in 
health coverage and benefit from the proposals in this rule, but we 
expect this number to be small. We sought comment on estimates or data 
sources we could use to provide quantitative estimates for the benefit 
to these individuals.
---------------------------------------------------------------------------

    \126\ The estimates in this RIA are based on DHS' current 
implementation of the DHS DACA final rule, consistent with the court 
orders in Texas v. United States, 50 F.4th 498 (5th Cir. 2022) and 
Texas v. United States, 1:18-cv-0068 (S.D. Tex. Oct. 14, 2022), 
whereby DHS continues to accept the filing of both initial and 
renewal DACA requests and related applications for employment 
authorization but is only processing renewal requests.
---------------------------------------------------------------------------

    The changes to 42 CFR 600.5 will 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 changes to 45 CFR 152.2 and 155.20 
will 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.

[[Page 39428]]

[GRAPHIC] [TIFF OMITTED] TR08MY24.020

    In the proposed rule, we estimated an enrollment impact of about 
129,000.\127\ We sought comment on these estimates and the assumptions 
and methodology used to calculate them. We are modifying the estimates 
in this final rule to reflect that we are not finalizing the proposed 
changes for Medicaid and CHIP and to reflect the States that will 
operate BHPs as of the effective date of this rule and the most recent 
available data on DACA recipients.128 129 To estimate the 
enrollment impact on the Exchanges and the BHPs, we started with an 
estimate of the DACA population. USCIS has estimated this count to be 
545,000 persons as of September 30, 2023.\130\ Based on a 2022 survey 
from the National Immigration Law Center,\131\ roughly 27 percent of 
DACA recipients were uninsured. In addition, we assume that 
approximately 70 percent of this group will opt to enroll in the 
Exchanges and BHPs. This results in an enrollment impact of about 
100,000 persons for both the Exchanges and BHP.\132\ Based on internal 
enrollment data, we estimate that 1,000 people will enroll in the BHPs 
in Minnesota and Oregon,\133\ and the remaining 99,000 will enroll in 
the Exchanges.
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    \127\ See 88 FR 25327 through 25329 for a discussion of the 
proposed enrollment estimates by program.
    \128\ The Exchange enrollment estimates in this final rule have 
been updated to account for the DACA recipients that would have 
enrolled in Medicaid under the policies in the proposed rule but 
will now enroll in a QHP through an Exchange based on the finalized 
policies.
    \129\ The BHP enrollment estimates in the proposed rule assumed 
that New York and Minnesota would be States impacted by the BHP 
changes in the proposed rule. The BHP enrollment estimates in this 
final rule reflect that Minnesota and Oregon will be States impacted 
by the finalized BHP changes. The data on the number of DACA 
recipients, as well as the average age of DACA recipients and the 
percent of DACA recipients that are uninsured has been updated since 
the proposed rule. See 88 FR 25327 through 25329 for more detail on 
the estimates in the proposed rule.
    \130\ Count of Active DACA Recipients by Month of Current DACA 
Expiration as of September 30, 2023. U.S. Citizenship and 
Immigration Services. https://www.uscis.gov/sites/default/files/document/data/active_daca_recipients_fy23_q4.pdf.
    \131\ National Immigration Law Center, 2023. DACA Recipients' 
Access to Health Care: 2023 Report. (2023). https://www.nilc.org/wp-content/uploads/2023/05/NILC_DACA-Report_2023.pdf.
    \132\ This enrollment estimate does not include DACA recipients 
who are now expected to be covered under New York's Essential Plan 
Expansion, effective April 1, 2024, as they will not be impacted by 
this final rule. For more information, see https://www.cms.gov/marketplace/states/section-1332-state-innovation-waivers#To%20view%20New%20York';s%20application%20materials,%20pl
ease%20visit%20the%20New%20York%20waiver%20section%20of%20this%20webp
age%20below.
    \133\ Minnesota's BHP began January 1, 2015. Oregon's BHP is 
projected to begin July 1, 2024, and is pending CMS approval. For 
more information, see https://www.medicaid.gov/basic-health-program/index.html.
---------------------------------------------------------------------------

    The changes to 42 CFR 600.5 will 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 30 years.134 135
---------------------------------------------------------------------------

    \134\ USCIS. Count of Active DACA Recipients by Month of Current 
DACA Expiration as of September 30, 2023. https://www.uscis.gov/sites/default/files/document/data/active_daca_recipients_fy23_q4.pdf.
    \135\ In the proposed rule, the available USCIS data at the time 
showed an average age of 29 years. We sought comment on any 
estimates or data sources we could use to provide quantitative 
estimates for the associated effects, including benefit to these 
individuals. See 88 FR 25328.
---------------------------------------------------------------------------

    The changes to 45 CFR 152.2 and 155.20 will 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 pools. In addition, 
the modifications to the definition of ``lawfully present'' discussed 
in section II.B.2. of this rule will reduce burden on Exchanges and 
BHPs by allowing them to more frequently verify a noncitizen's status 
with a trusted source of data and to not have to request additional 
information from consumers. This change will promote simplicity and 
consistency in program administration, and further program integrity 
resulting from the increased reliance on a trusted Federal source of 
data. We sought 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 
will ensure increased access to health care services for these 
populations, which in turn may decrease costs for emergency medical 
expenditures. Further, the policies in this rule will 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 preventive 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 will 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.\136\
---------------------------------------------------------------------------

    \136\ 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 sought comment on these effects and any other potential benefits 
that may result from the proposals in this rule.
    We received public comments on these effects. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters provided comments related to CMS' estimates for 
the number of individuals who will newly enroll in health insurance 
coverage through an Exchange, Medicaid, CHIP, or a BHP. Commenters 
agreed with CMS' assumption that no longer excluding DACA recipients 
from eligibility for APTC and CSRs would make such individuals more 
likely to enroll in coverage.
    Commenters also offered details specific to their States and 
localities. One State department of insurance cited an estimate that of 
the 40,000 uninsured DACA recipients in California with incomes above 
the Medi-Cal threshold, 30,000 would enroll in subsidized

[[Page 39429]]

coverage through Covered California.\137\ One commenter agreed with 
CMS' assumption that none of the proposed technical changes to the 
definition of ``lawfully present'' would result in a significant number 
of individuals gaining coverage. Nevertheless, the commenter believed 
that such changes were still important given their potential to 
significantly benefit impacted individuals and their families, often at 
very vulnerable points in their lives.
---------------------------------------------------------------------------

    \137\ Dietz, Miranda; Kadiyala, Srikanth, and Lucia, Laurel; 
``Extending Covered California subsidies to DACA recipients would 
fill coverage gap for 40,000 Californians''; UC Berkeley Labor 
Center; June 6, 2023; https://laborcenter.berkeley.edu/extending-covered-california-subsidies-to-daca-recipients-would-fill-coverage-gap-for-40000-californians/#_ftn3.
---------------------------------------------------------------------------

    Response: These enrollment projections align with our projections 
as presented in the proposed rule and in this final rule. As previously 
stated, we are not finalizing the proposed changes for Medicaid and 
CHIP at this time, and therefore the enrollment projections in this 
final rule only reflect the BHP and Exchange enrollment impact. 
Additionally, we agree that the technical changes to the definition of 
``lawfully present'' are important due to the potential benefit to the 
individuals and families impacted by these changes.
    Comment: Commenters provided detailed analysis of the benefits they 
expected this rule would convey. These benefits, discussed in detail in 
section II.B.1., include increased access to care, improved health 
outcomes, reduced disparities, decreased reliance on uncompensated care 
and emergency department care, and strengthened workforce, education 
systems, and local economies. Many commenters pointed out how the 
provisions of this rule will benefit not only DACA recipients and other 
impacted noncitizens, but their families and communities as well. 
Commenters further noted that they believed this rule would improve 
individual market Exchange risk pools, due to DACA recipients' age and 
health status as compared to current Exchange enrollees, and that 
improvements to the risk pool could result in cost savings for health 
insurance issuers in the form of lower claims costs and for individuals 
in the form of lower health insurance premiums. One commenter, a 
nonprofit organization, noted that after New York and California 
established State-funded Medicaid options for DACA recipients, DACA-
eligible individuals were 4 percent more likely to report having health 
insurance in those States as compared to other States that did not 
expand eligibility, implying that expanding the insurance affordability 
programs available to DACA recipients will result in further coverage 
gains.
    Response: We agree that these are potential benefits of the 
policies finalized in this rule. We appreciate the insight from 
commenters that the policies in this rule will also benefit the 
families and communities of the DACA recipients impacted by the rule. 
We agree that it is possible that this rule could improve the Exchange 
risk pools, which could result in cost savings for issuers and 
individuals due to lower claims costs and premiums. We further 
appreciate the supporting data regarding potential coverage gains in 
Exchange programs in specific States.
    Comment: Commenters, including State government agencies, noted 
that the proposed changes would result in the more efficient operation 
of CMS programs. Some commenters specifically stated that changes to 
the definition of ``lawfully present'' could streamline practices for 
caseworkers and eligibility workers at States and agencies.
    Response: We agree that the changes we are finalizing will enable 
Exchanges and BHPs to more easily verify applicants' lawful presence. 
This should both simplify operations and decrease the proportion of 
cases in which caseworkers and eligibility workers need to ask 
consumers to provide additional information.
    After consideration of public comments, we are finalizing these 
estimates using the calculation methodology as proposed with 
modifications to reflect that we are not finalizing the proposed 
changes for Medicaid and CHIP and to reflect the States that will 
operate BHPs as of the effective date of this rule and the most recent 
available data on DACA recipients.
1. Costs
    The changes to 42 CFR 600.5 will 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.B.2. and IV.B.3. of this final rule, and the costs to 
consumers as a result of increased information collections associated 
with this policy, which include applying for BHP and submitting 
additional information to verify their lawful presence, if necessary, 
are discussed in section IV.B.4. of this final rule. As previously 
mentioned, we updated the cost estimates discussed in sections IV.B.2., 
IV.B.3., and IV.B.4. of this final rule to reflect the policies being 
finalized in this rule and updated data since publishing the proposed 
rule. States operating a BHP may choose to provide additional outreach 
to those eligible. In the proposed rule, we included costs related to 
the fact that a potential increase in the number of enrollees may 
increase Federal payments to a State's BHP trust fund. For further 
information, please see the ``Transfers'' section.
    The changes to 45 CFR 152.2 and 155.20 will 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 not on the Federal 
platform 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.B.3. of this 
final rule and the costs to consumers as a result of increased 
information collections associated with this policy, which include 
applying for Exchange coverage and submitting additional information to 
verify their lawful presence, if necessary, are discussed in section 
IV.B.4. of this final rule. This change may result in slightly 
increased traffic during open enrollment for the 2025 coverage year 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. We clarify that CMS does not require States 
to fund additional outreach and enrollment activities as a result of 
this rule. Because SBE-FPs will not be required to incur costs related 
to implementation, application processing, or outreach and education, 
we estimate no increased costs for States operating SBE-FPs as a result 
of this rule. We also note that both State Exchanges not on the Federal 
platform and SBE-FPs may see an increase in the user fees they collect 
from issuers as a result of increased

[[Page 39430]]

enrollment due to the policies finalized in this rule. We anticipate 
that the costs of additional outreach and education that States may 
choose to pursue would be minimal and sought 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 this final 
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 
requested comment that would facilitate refinement of the effect 
categorization.
    We received public comments on these proposals. The following is a 
summary of the comments we received and our responses.
    Comment: Commenters noted that this regulatory change will enable 
States that currently use State funds to cover DACA recipients to re-
allocate State funding towards covering other uninsured individuals if 
DACA recipients are able to newly access Federally-funded QHPs. 
Commenters noted that 11 States and the District of Columbia currently 
use State-only funds to cover all income-eligible children, regardless 
of lawful presence status, and that certain additional States also 
cover pregnant and postpartum individuals. Commenters noted that New 
York and California currently use State funding to provide coverage to 
DACA recipients.
    One commenter, a State government agency, noted that California 
currently expends approximately $13 million out of the State's General 
Fund to cover individuals who do not currently meet CMS' definitions of 
``lawfully present,'' and that considering DACA recipients ``lawfully 
present'' has the potential to significantly lower or offset funds 
currently expended for health coverage for DACA recipients.
    Response: We appreciate commenters sharing information about how 
States may otherwise cover this population. As previously mentioned, we 
are not finalizing the proposed changes for Medicaid and CHIP. However, 
State funds used to cover DACA recipients eligible for Medicaid/CHIP 
may be impacted if individuals currently covered under these State-
funded programs choose to enroll in QHP or BHP coverage.
    Comment: One commenter agreed with CMS' assumption that costs for 
outreach and education would be ``minimal'' since the State already 
conducts robust outreach during its Open Enrollment Period. The 
commenter stated that they agreed that costs for outreach and education 
would be ``minimal'' if supported by Federal financial participation 
and State funding.
    Response: We agree that State Exchanges not on the Federal platform 
generally conduct robust outreach during their Open Enrollment Periods. 
We are committed to conducting outreach and education to reach 
individuals impacted by this rule to educate them that they may be 
newly eligible for health insurance affordability programs.
    Comment: Commenters stated concerns about the costs associated with 
this rule. Commenters noted that this rule will increase costs to 
taxpayers and stated that illegal immigration is a net cost to 
taxpayers of about $151 billion per year, further alleging that illegal 
immigration costs each American taxpayer $1,156 per year. The commenter 
also highlighted that the U.S. government spends $2.3 trillion annually 
on Federal medical expenditures, and that it is ``impossible to 
estimate how many illegal aliens participate in the ACA now, and what 
level of Federal subsidy they receive,'' but that they believe this 
rule will place an ``even greater burden'' on taxpayers. Commenters 
stated concerns that this rule will drive the United States further 
into debt.
    Response: We acknowledge commenters' concerns about the costs on 
the Federal government and Federal taxpayers associated with this rule. 
We believe the benefits of this rule outweigh the potential negative 
impacts identified by commenters. The benefits discussed in section 
V.C. of this final rule, including increased health coverage and a 
reduction in uncompensated care costs; ensuring equitable access to 
coverage across all populations served by the programs addressed in 
this rule, including members of underserved communities; and potential 
impacts on the risk pool, are important to balance against the costs of 
the rule identified in this section. Moreover, as clarified previously 
in this final rule, this rule aims to establish eligibility criteria 
for Exchanges and BHPs and does not address immigration policy, 
including DHS' DACA final rule. As discussed previously in this rule, 
individuals must have their immigration status or category 
electronically verified by DHS to enroll in Exchange or BHP coverage, 
which ensures that noncitizens without an eligible immigration status 
or category are not able to enroll. We therefore decline to make any 
changes in response to these comments.
    Comment: One commenter associated with an academic institution 
stated concerns that allowing DACA recipients to access subsidized QHPs 
through Exchanges would increase the prices for non-subsidized health 
insurance. The commenter cited a JAMA Network Open study that found 
that between 2011 and 2021, median unsubsidized premium for individual 
market plans rose by 59 percent. The commenter stated that they saw 
``little reason to expect that health care unaffordability will slow as 
government subsidies continue to grow.'' The commenter further 
hypothesized that subsidized health insurance programs make 
unsubsidized health insurance unaffordable because ``these programs 
require buy-in from powerful health care industry groups.'' They stated 
that taxpayer money is being channeled to contribute to industry 
groups' bottom lines, which inflates the cost of unsubsidized health 
insurance.
    Response: We do not agree that allowing DACA recipients to access 
subsidized QHPs through Exchanges would increase the prices for 
unsubsidized health insurance. On the contrary, as discussed in section 
V.C. of this final rule, DACA recipients are generally younger than the 
average Exchange enrollee and comparably healthy to the general 
population, and their enrollment has the potential to improve the 
Exchange risk pool and lower health insurance premiums. Additionally, 
due to the medical loss ratio (MLR) requirements for issuers 
participating on the individual market Exchanges, if an issuer spends 
less than 80 percent of premiums on medical care and efforts to improve 
quality of care, it must refund this money to enrollees. These MLR 
requirements prevent excess contributions to ``industry groups' bottom 
lines'' and protects subsidized and unsubsidized consumers alike from 
premiums that are too high and are not spent on medical care and 
quality initiatives.
    Comment: Commenters believe that U.S. tax dollars should not be 
spent on providing benefits, including health care benefits, to DACA 
recipients or other noncitizens. Commenters stated that they already 
face high tax burdens, and that tax revenue should be directed towards 
meeting the health care needs of other vulnerable groups, including 
senior citizens, members of the military, and veterans. Commenters also 
stated that the U.S. government already spends too much money, is $31 
trillion in debt, and that our system is on the verge of bankruptcy. 
Commenters believe that

[[Page 39431]]

this proposed rule sets a bad precedent for expanding health care to 
individuals who are physically present in the United States without a 
valid immigration status, and that we cannot both be fiscally 
responsible and provide health care to noncitizens, citing Illinois as 
an example. Some commenters stated their belief that immigration reform 
is needed to stop this process from expanding to other immigrant 
populations. One commenter stated their belief that the parents of DACA 
recipients should be responsible for their children's wellbeing and 
provide a specific plan for obtaining independence, rather than the 
U.S. government being held responsible and providing government funded 
programs. Another commenter believes that there should be more 
accountability for those that use government sponsored public benefit 
programs.
    Response: Although some of these comments are out of scope, we 
acknowledge the concerns noted by some commenters about the allocation 
of U.S. tax dollars and would like to clarify that allocating tax 
dollars is the purview of the Congress. As previously mentioned, the 
purpose of this final rule is to establish eligibility requirements for 
Exchanges and BHPs rather than dictate where tax dollars are directed. 
Moreover, as mentioned previously in this final rule, noncitizens must 
have their immigration status or category electronically verified by 
DHS to enroll in the specified insurance affordability programs, which 
ensures that noncitizens without an eligible immigration status or 
category are not able to enroll. Additionally, we would like to 
emphasize that immigration reform and parental responsibility are 
outside of our purview and the scope of this rule. Finally, we are 
engaged in many accountability initiatives for our programs, including 
APTC and CSR audits, which verify the enrollment of qualified 
individuals and the subsidies they receive. We welcome suggestions from 
interested parties regarding accountability for CMS programs.
    After consideration of public comments, we are finalizing these 
cost estimates as discussed in section IV.B of this final rule.
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 changes to 42 CFR 600.5 will 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. Due to a potential increase in the number of enrollees, there 
may be an increase in Federal payments to a State's BHP trust fund, 
which represents a transfer.
    We discuss how we calculated our BHP enrollment estimates earlier 
in this RIA. Federal funding for a BHP under section 1331(d)(3)(A) of 
the ACA is based on the amount of the PTC allowed and payments to cover 
required CSRs that would have been provided for the fiscal year to 
eligible individuals enrolled in BHP standard health plans in the State 
if such eligible individuals were allowed to enroll in a QHP through an 
Exchange.\138\ These funds are paid to trusts established by the States 
and dedicated to the BHP, and the States then administer the payments 
to standard health plans within the BHP. In the proposed rule, to 
calculate costs, we used 2022 data from USCIS to determine the average 
age of a DACA recipient, which was 29, and we used PTC data to 
determine the average PTC for a 29-year-old, which was 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. We 
are modifying the costs in this final rule to use updated data.\139\ 
Therefore, to calculate costs, we use 2023 data from USCIS to determine 
the average age of a DACA recipient, which is 30, and we use PTC data 
to determine the average PTC for a 30-year-old, which is estimated to 
be $274 per month, and multiplied this by 12 months per year and by the 
projected number of enrollees eligible for PTC to arrive at annual 
costs.\140\ Our estimates for BHP expenditures as a result of the 
policies in this rule are shown in Table 4. We sought comment on these 
estimates and the assumptions and methodology used to calculate them.
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    \138\ On October 11, 2017, the Attorney General of the United 
States provided HHS and the Department of the Treasury (the 
Departments) with a legal opinion indicating that the permanent 
appropriation at 31 U.S.C. 1324, from which the Departments had 
historically drawn funds to make CSR payments, cannot be used to 
fund CSR payments to insurers. In light of this opinion--and in the 
absence of any other appropriation that could be used to fund CSR 
payments--HHS directed CMS to discontinue CSR payments to issuers 
until the Congress provides for an appropriation. See https://www.hhs.gov/sites/default/files/csr-payment-memo.pdf for more 
information. In the absence of a Congressional appropriation for 
Federal funding for CSR payments, we cannot provide States with a 
Federal payment attributable to CSRs that would have been paid on 
behalf of BHP enrollees had they been enrolled in a QHP through an 
Exchange.
    \139\ These costs also reflect that the two States that will 
operate a BHP when these policies go into effect are Minnesota and 
Oregon rather than Minnesota and New York as anticipated in the 
proposed rule.
    \140\ The estimate for FY 2025 only includes 11 months, assuming 
these individuals will enroll in a BHP beginning November 1, 2024, 
as the BHPs included in this analysis have, or are anticipated to 
have, continuous enrollment. We project no change in Federal BHP 
expenditures for FY 2024 as this rule will not take effect until FY 
2025.
[GRAPHIC] [TIFF OMITTED] TR08MY24.021

    The policies at 45 CFR 152.2 and 155.20 will generate a transfer 
from the Federal Government to consumers in the form of increased PTC 
payments due to individuals who will be eligible for Exchange coverage 
and APTC based on the policies in this final rule.
    We discuss how we calculated our Exchange enrollment estimates 
earlier in this RIA. In the proposed rule, to calculate costs, we used 
2022 data from USCIS to determine the average age of a DACA recipient, 
which was 29. For 2024, the average PTC for a 29-year-old was 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. We are modifying the 
costs in this final rule to use updated data. Therefore, to calculate 
costs, we use 2023 data from USCIS to determine the average age of a 
DACA recipient, which is 30. For 2025, the average PTC for a 30-year-
old is estimated to be $274 per month, and we multiplied this by 12 
months per FY and by the projected number of enrollees eligible for PTC 
to

[[Page 39432]]

arrive at annual costs.\141\ These costs are projected to increase 
using the trends assumed in the President's FY 2025 Budget.
---------------------------------------------------------------------------

    \141\ The estimate for FY 2025 only includes 9 months, assuming 
these individuals will enroll in a QHP beginning January 1, 2025. It 
is possible that individuals impacted by this rule could enroll in 
coverage effective December 1, 2024, but we do not have a reliable 
way to estimate how many individuals would enroll with that coverage 
effective date. Therefore, we project no change in PTC expenditures 
in FY 2024.
---------------------------------------------------------------------------

    We present these estimates in Table 5 and sought comment on the 
estimates and the assumptions and methodology used to calculate them.
[GRAPHIC] [TIFF OMITTED] TR08MY24.022

    We did not receive public comments on the transfers estimated in 
this rule specific to PTC expenditures, and therefore, we are 
finalizing these estimates with modifications as described previously 
in this section.
3. Regulatory Review Cost Estimation
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret the 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 final 
rule, we assume that the total number of unique commenters on the 
proposed rule (284) will be the number of reviewers of this final rule.
    Using the median wage information from the BLS for medical and 
health service managers (Code 11-9111), we estimate that the cost of 
reviewing this rule is $106.42 per hour, including overhead and fringe 
benefits. Assuming an average reading speed of 250 words per minute, we 
estimate that it will take approximately 3.3 hours for each individual 
to review the entire final rule (approximately 49,000 words/250 words 
per minute = 196 minutes). Therefore, we estimate that the total one-
time cost of reviewing this regulation is approximately $99,737 
([$106.42 x 3.3 hours per individual review] x 284 reviewers).

D. Regulatory Alternatives Considered

    In developing this rule, we considered not proposing or finalizing 
the technical and clarifying changes to our definitions of ``lawfully 
present,'' discussed in section II.B.2 of the 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 and finalized 
changes discussed in section II.B.2 of this final rule will simplify 
verification of applicants' immigration status or category, our 
eligibility determination 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 will benefit from increased access to health coverage 
through the Exchange or a BHP.
    In the proposed rule, we sought comments on these proposals, and we 
respond to those comments in the associated preamble sections of this 
final rule. As discussed in those preamble sections, we are finalizing 
the Exchange and BHP policies as discussed in the associated sections 
of this final rule, and not finalizing the Medicaid and CHIP proposals 
at this time.

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 6 showing the classification of the impact associated with the 
provisions of the final 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.
    The final rule finalizes standards for programs that will 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 6 reflect a qualitative 
assessment of impacts and the estimated direct monetary costs and 
transfers resulting from the provisions of the final rule for the 
Federal Government, State Exchanges, BHPs, and consumers.

[[Page 39433]]

[GRAPHIC] [TIFF OMITTED] TR08MY24.023

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 estimated 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 will 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

[[Page 39434]]

$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.\142\ 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 87 out of 483 issuers of health insurance coverage 
nationwide had total premium revenue of $47 million or less.\143\ This 
estimate may overstate the actual number of small health insurance 
issuers that may be affected, since over 77 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 $47 million.
---------------------------------------------------------------------------

    \142\ Available at https://www.sba.gov/document/support--table-size-standards.
    \143\ Available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
---------------------------------------------------------------------------

    In this final rule, we are finalizing standards for eligibility for 
Exchange enrollment, APTC and CSRs, and BHP enrollment. Because we 
believe that insurance firms offering comprehensive health insurance 
policies generally exceed the size thresholds for ``small entities'' 
established by the SBA, we did not believe that an initial regulatory 
flexibility analysis is required for such firms and therefore do not 
believe a final regulatory flexibility analysis is required. 
Furthermore, the policies related to BHPs involve State governments, 
but as States do not constitute small entities under the statutory 
definition, an impact analysis for that provision 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 
three to five percent. We do not believe that this threshold will be 
reached by the requirements in this final rule. Therefore, the 
Secretary has certified that this final 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 604 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 the final 
rule will not adversely affect small rural hospitals. Therefore, the 
Secretary has certified that this final 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 must meet when it issues 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 and BHPs with CMS' interest in 
establishing a consistent definition of ``lawfully present'' for use in 
eligibility determinations across our programs, to the extent possible. 
We also attempted to balance States' interests with the overall goals 
of the ACA, as well as the goals and 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 final rule related to the 
Exchanges (45 CFR 152.2 and 155.20) and BHPs (42 CFR 600.5) will not 
impose any requirement costs on State and local governments that do not 
operate their own Exchanges, or that operate SBE-FPs, this regulation 
has federalism implications for other States. State Exchanges not on 
the Federal platform and BHPs will be required to update their 
eligibility systems to accurately evaluate applicants' lawful presence. 
State Exchanges not on the Federal platform and BHPs may wish to 
conduct outreach to groups such as DACA recipients who will newly be 
considered lawfully present under the rule. By our estimate, these 
requirements do not impose substantial direct costs on the affected 
States, which in any event have chosen to operate their own Exchanges 
and eligibility and enrollment platforms, or 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, and as indicated earlier, a BHP is 
optional for States. Therefore, if implemented in a State, a BHP 
provides access to a pool of Federal funding that will not otherwise be 
available to the State. States that do not have a BHP and do not 
operate their own Exchange, including SBE-FP States, are not expected 
to incur any costs as a result of this rule.
    We included policies in the proposed rule related to Medicaid and 
CHIP that might have imposed substantial direct costs on State 
governments. However, as discussed earlier in this rule, we are not 
finalizing those provisions at this time and therefore they do not have 
federalism implications.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on April 15, 2024.

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

[[Page 39435]]

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 amends 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.

PART 435 [Amended]

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 words ``Qualified Non-citizen'' and 
adding in their place the words ``qualified noncitizen''.

0
3. Section 435.4 is amended by revising the definition of ``Qualified 
noncitizen'' to read as follows:


Sec.  435.4  Definitions and use of terms.

* * * * *
    Qualified noncitizen means:
    (1) a ``Qualified alien,'' as defined in 8 U.S.C. 1641(b) and (c); 
who is:
    (i) A noncitizen who is lawfully admitted for permanent residence 
under the Immigration and Nationality Act [8 U.S.C. 1101 et seq.];
    (ii) A noncitizen who is granted asylum under section 208 of such 
Act [8 U.S.C. 1158];
    (iii) A refugee who is admitted to the United States under section 
207 of such Act [8 U.S.C. 1157];
    (iv) A noncitizen who is paroled into the United States under 
section 212(d)(5) of such Act [8 U.S.C. 1182(d)(5)] for a period of at 
least 1 year;
    (v) A noncitizen whose deportation is being withheld under section 
243(h) of such Act [8 U.S.C. 1253] (as in effect immediately before the 
effective date of section 307 of division C of Public Law 104-208) or 
section 241(b)(3) of such Act [8 U.S.C. 1231(b)(3)] (as amended by 
section 305(a) of division C of Public Law 104-208);
    (vi) A noncitizen who is granted conditional entry pursuant to 
section 203(a)(7) of such Act [8 U.S.C. 1153(a)(7)] as in effect prior 
to April 1, 1980;
    (vii) A noncitizen who is a Cuban and Haitian entrant (as defined 
in section 501(e) of the Refugee Education Assistance Act of 1980);
    (viii) An individual who lawfully resides in the United States in 
accordance with a Compact of Free Association referred to in 8 U.S.C. 
1612(b)(2)(G);
    (ix) A noncitizen who--
    (A) Has been battered or subjected to extreme cruelty in the United 
States by a spouse or a parent, or by a member of the spouse or 
parent's family residing in the same household as the alien and the 
spouse or parent consented to, or acquiesced in, such battery or 
cruelty, but only if (in the opinion of the agency providing such 
benefits) there is a substantial connection between such battery or 
cruelty and the need for the benefits to be provided; and
    (B) Has been approved or has a petition pending which sets forth a 
prima facie case for--
    (1) Status as a spouse or a child of a United States citizen 
pursuant to clause (ii), (iii), or (iv) of section 204(a)(1)(A) of the 
Immigration and Nationality Act [8 U.S.C. 1154(a)(1)(A)(ii), (iii), 
(iv)];
    (2) Classification pursuant to clause (ii) or (iii) of section 
204(a)(1)(B) of the Act [8 U.S.C. 1154(a)(1)(B)(ii), (iii)];
    (3) Suspension of deportation under section 244(a)(3) of the 
Immigration and Nationality Act [8 U.S.C. 1254(a)(3)] (as in effect 
before the title III-A effective date in section 309 of the Illegal 
Immigration Reform and Immigrant Responsibility Act of 1996);
    (4) Status as a spouse or child of a United States citizen pursuant 
to clause (i) of section 204(a)(1)(A) of such Act [8 U.S.C. 
1154(a)(1)(A)(i)], or classification pursuant to clause (i) of section 
204(a)(1)(B) of such Act [8 U.S.C. 1154(a)(1)(B)(i)]; or
    (5) Cancellation of removal pursuant to section 240A(b)(2) of such 
Act [8 U.S.C. 1229b(b)(2)];
    (x) A noncitizen--
    (A) Whose child has been battered or subjected to extreme cruelty 
in the United States by a spouse or a parent of the alien (without the 
active participation of the alien in the battery or cruelty), or by a 
member of the spouse or parent's family residing in the same household 
as the alien and the spouse or parent consented or acquiesced to such 
battery or cruelty, and the alien did not actively participate in such 
battery or cruelty, but only if (in the opinion of the agency providing 
such benefits) there is a substantial connection between such battery 
or cruelty and the need for the benefits to be provided; and
    (B) Who meets the requirement of 8 U.S.C. 1641(c)(1)(B);
    (xi) A noncitizen child who--
    (A) Resides in the same household as a parent who has been battered 
or subjected to extreme cruelty in the United States by that parent's 
spouse or by a member of the spouse's family residing in the same 
household as the parent and the spouse consented or acquiesced to such 
battery or cruelty, but only if (in the opinion of the agency providing 
such benefits) there is a substantial connection between such battery 
or cruelty and the need for the benefits to be provided; and
    (B) Who meets the requirement of 8 U.S.C. 1641(c)(1)(B); or
    (xii) A noncitizen who has been granted nonimmigrant status under 
section 101(a)(15)(T) of the Immigration and Nationality Act (8 U.S.C. 
1101(a)(15)(T)) or who has a pending application that sets forth a 
prima facie case for eligibility for such nonimmigrant status.
    (2) Noncitizens who are treated as refugees under other Federal 
statutes:
    (i) Noncitizens who are victims of a severe form of trafficking in 
persons, as described in 22 U.S.C. 7105(b)(1)(C), or who are classified 
as nonimmigrants under section 101(a)(15)(T)(ii) of the Immigration and 
Nationality Act (8 U.S.C. 1101(a)(15)(T)(ii)), pursuant to 22 U.S.C. 
7105(b)(1)(A);
    (ii) Iraqi and Afghan special immigrants, as described in Public 
Law 110-181, section 1244(g) (2008), Public Law 111-8, section 
602(b)(8) (2009), Public Law 111-118, section 8120(b) (2010), and 
Public Law 113-291, section 1227 (2014);

[[Page 39436]]

    (iii) Amerasian immigrants, described in Public Law 100-202, 
section 101(e) (8 U.S.C. 1101 note);
    (iv) Certain Afghan parolees, in accordance with Section 2502 of 
Public Law 117-43, as amended; and
    (v) Certain Ukrainian parolees, in accordance with Section 401 of 
Public Law 117-128, as amended.
* * * * *

0
4. Section 435.406 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 words ``Qualified Non-Citizen'' and 
adding in its place the words ``qualified noncitizen''.
0
c. Revising paragraph (a)(2)(i).
    The revision reads as follows:


Sec.  435.406  Citizenship and noncitizen eligibility.

    (a) * * *
    (2)(i) Except as specified in 8 U.S.C. 1612(b)(1) (permitting 
States an option with respect to coverage of certain qualified 
noncitizens), qualified noncitizens as described in 42 CFR 435.4 
(including qualified noncitizens subject to the 5-year bar) who have 
provided satisfactory documentary evidence of qualified noncitizen 
status, which status has been verified with the Department of Homeland 
Security (DHS) under a declaration required by section 1137(d) of the 
Act that the applicant or beneficiary is a noncitizen in a satisfactory 
immigration status.
* * * * *

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--
0
a. Removing all instances of the words ``qualified aliens'' and adding 
in its place the words ``qualified noncitizens'';
0
b. Revising paragraphs (b)(6); and
0
c. Adding paragraph (c).
    The revision and addition read as follows:


Sec.  457.320  Other eligibility standards.

* * * * *
    (b) * * *
    (6) Exclude individuals based on citizenship or nationality, to the 
extent that the children are U.S. citizens, U.S. nationals or qualified 
noncitizens (as defined at paragraph (c) of this section); or
* * * * *
    (c) Definitions. As used in this subpart:
    Qualified noncitizen has the meaning assigned at Sec.  435.4 of 
this chapter.
* * * * *

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 amends 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 
Pub. L. 101-649 as amended; or section 1504 of the LIFE Act Amendments 
of 2000, title XV of H.R. 5666, enacted by reference in Pub. L. 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(b)(3)(A), or for 
protection under the regulations implementing the Convention Against 
Torture; and
    (ii) Is under the age of 14;
    (12) Has been granted withholding of removal under the regulations 
implementing 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

[[Page 39437]]

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.  155.20 with respect to the definition 
of ``lawfully present'' are intended to be severable from one another.

Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2024-09661 Filed 5-3-24; 8:45 am]
BILLING CODE 4120-01-P