Health Insurance is Now in Reach for Certain DACA Recipients
The White House announced a final rule on May 3 that allows Deferred Action for Childhood Arrivals (DACA) recipients to become eligible for Affordable Care Act coverage for the first time. DACA is a policy that was created in 2012 by the Obama Administration to provide work authorization to thousands of individuals, often referred to as “Dreamers,” who were brought to this country as children before reaching their 16th birthday. DACA is an exercise of prosecutorial discretion to defer removal action against a person for a limited period of time. DACA does not confer lawful immigration status on people.
The program has been in jeopardy over the past decade as it faces legal challenges in federal court. On September 13, 2023, the U.S. District Court for the Southern District of Texas issued a decision finding the DACA final rule unlawful and expanded its original July 16, 2021 injunction and order of vacatur to cover the final rule. The decision excludes those who received their DACA status before July 16, 2021. Although Congress has not yet acted to provide a pathway to citizenship for eligible Dreamers, the recently announced final rule will provide stability and opportunity to over 100,000 young individuals by helping them obtain health insurance.
Individuals without health insurance are less likely to receive preventive or routine health screenings and may delay necessary medical care. And when they do seek care — often in emergency rooms — they may incur high costs and debts and strain an already fragile health system. DACA recipients are currently three times more likely to be uninsured than the general U.S. population.
As a result of this rule, DACA recipients and other newly eligible individuals will qualify for a special enrollment period to select a health plan through the Marketplace during the 60 days following the rule’s November 1 effective date. This timing also corresponds with the 2025 Open Enrollment Period, which will help ensure that newly eligible individuals are able to seamlessly enroll in coverage.
DACA recipients who qualify to enroll in a Marketplace plan may also qualify for advance payments of the premium tax credit (APTC) and cost-sharing reductions (CSRs) to reduce the cost of their Marketplace coverage, depending on their income.
Those who apply for coverage in November 2024 can have their Marketplace coverage begin as early as December 1 if they meet all other eligibility requirements. DACA recipients and others who are eligible for a basic health plan (BHP) under various state laws can apply for and receive coverage as early as November 1. Currently, only Minnesota and New York have implemented BHPs.
The Centers for Medicare & Medicaid Services (CMS) also made technical modifications to the definition of “lawfully present” used to determine eligibility for coverage through a Marketplace or a BHP to promote administrative efficiency, clarity, and transparency. These changes aim to ensure complete, accurate, and consistent eligibility determinations and verification processes for health coverage for these populations. All provisions of the final rule will be effective on November 1.
Beginning in November, DACA recipients can apply for coverage through HealthCare.gov and state-based marketplaces, where they may qualify for financial assistance to help them purchase health insurance.
Please contact Brandon Davis, Michael Williams, Laura Buck, or any member of the Phelps Immigration or Employee Benefits/Executive Compensation teams if you have questions or need advice or guidance.