WASHINGTON—The U.S. Treasury Department and Internal Revenue Service have proposed new regulations tightening eligibility and verification requirements for federal health insurance subsidies, implementing changes enacted under President Trump’s Working Families Tax Cuts legislation.
The proposed rules would affect the Premium Tax Credit, a refundable federal tax credit that helps qualifying individuals and families purchase health insurance through Affordable Care Act marketplaces.
Beginning in 2027, eligibility would be restricted to U.S. citizens, U.S. nationals and certain lawfully present noncitizens. The regulations would also introduce additional verification requirements for advance payments of the credit, which help reduce monthly insurance premiums.
“Hardworking American taxpayers should not be forced to subsidize health care for people who are ineligible under federal law,” Treasury Secretary Scott Bessent said.
Bessent said the regulations are intended to close eligibility gaps and prevent improper payments.
The proposal follows a broader Trump administration effort to identify potentially improper enrollment and payments within federal health insurance programs.
The Centers for Medicare & Medicaid Services previously announced that it had removed more than 760,000 unverified enrollments from the federal marketplace, which the agency said produced $2.2 billion in savings. CMS also said nearly one million Americans would receive approximately $500 each after being overcharged for coverage.
The figures and characterization of the enrollments were provided by the administration.
IRS Chief Executive Officer Frank Bisignano said the additional safeguards are designed to reduce improper claims while maintaining access for eligible taxpayers.
“The proposed rules protect eligible taxpayers while strengthening the integrity of the Premium Tax Credit,” Bisignano said.
CMS Administrator Mehmet Oz also supported the proposal, describing stronger eligibility screening as a way to prevent improper federal spending before payments are issued.
The regulations remain proposals rather than final rules. The Treasury Department said additional regulations from the Department of Health and Human Services are expected to address changes to marketplace procedures needed to implement the new verification requirements.