Gallagher Student Health and Special Risk

The U.S. Department of Homeland Security (DHS) announced a final ruling on the Inadmissibility on Public Charge Grounds in August 2019. This ruling elaborates on Section 212 of the Immigration and Nationality Act of 1952 by clarifying the factors considered when determining whether someone is a public charge. The rule applies to applicants for admission and those who are seeking to adjust their nonimmigrant status and would have become effective on October 15, 2019. However, federal judges in New York, California and Washington State issued injunctions temporarily blocking the rule which would impose serious impediments to legal residency for those who use public benefits such as Medicaid or those deemed likely to use them in the future. An injunction is an authoritative warning and judicial order that restrains a party from beginning or continuing an action threatening or invading the legal right of another.

Lawsuits were also filed by 21 states and the District of Columbia arguing that the new regulations discriminate against low-income people from developing countries and undermine the well-being of children whose families might avoid using nutritional, health and other programs.

What is the “public charge” concept?

Federal immigration uses a “public charge” test to determine which low-income people may be denied a visa or adjustment of status to lawful permanent residence (a “green card”). The test determines whether an individual is likely to become primarily dependent on the government for subsistence, as demonstrated by either the receipt of public cash assistance for income maintenance or institutionalization for long-term care at government expense. With the new rule the meaning of “public charge” may now be consistently enforced.

Higher Education Concerns

Will this impact 1.) a student's Visa status or 2.) have any different tax implications?

1a.) For F1 or M1 Students to live and study in the U.S., they must provide proof that they have financial resources to live and study in the U.S. Officials must capture this proof of financial support by creating an initial Form I-20 "Certificate of Eligibility for Nonimmigrant Student Status" in the Student and Exchange Visitor Information System (SEVIS), an internet-based application that reports and monitors international students. The State Department does not have an agreement with the prospective student, however, students must prove their ability to support themselves in the U.S. By submitting proof they shouldn't be subject to the public charge rule and the State Department should approve their visa.

1b.) International students with J1 Visas are required to have coverage that meets the State Department coverage requirements (if in the country for three months or more) during a stay in the United States. If those students choose to enroll in an ACA Marketplace plan or Medicaid and receive some form of a subsidy, they may experience an impact on their Visa status.

2.) Eligible aliens, including international students, who are “lawfully present in the United States” may be subject to the Individual ACA Mandate, although there would not be any changes to their tax implications.

Individuals considered non-resident aliens temporarily present in the U.S. such as students, trainees, scholars, teachers, researchers, exchange visitors, and cultural exchange visitors are subject to special rules with respect to the taxation of their income. There is no minimum dollar amount of income, which triggers a filing requirement for a nonresident alien, including foreign students or scholars.

Filing is required by nonresident alien students and scholars who have:

1. A taxable scholarship or fellowship
2. Income partially or totally exempt from tax under the terms of a tax treaty; and/or
3. Any other income, which is taxable under the Internal Revenue Code

If students choose to enroll in an ACA Marketplace plan or Medicaid and receive some form of a subsidy, they may experience an impact on their Visa status.

Will this impact the current Medicaid eligibility for international students?

The Department of Homeland Security is not considering the following as a public charge:

1. The receipt of Medicaid for the treatment of an emergency medical condition;
2. Services or benefits funded by Medicaid but provided under the Individuals with Disabilities Education Act;
3. School-based services or benefits provided to individuals who are at or below the oldest age eligible for secondary education as determined under state or local law;
4. Medicaid benefits received by an alien under 21 years of age; or
5. Medicaid benefits received by a woman during pregnancy and during the 60-day period beginning on the last day of the pregnancy.

According to these exceptions, students under 21 years of age will remain enrolled in Medicaid with no impact, although at this time we are unsure about students that are 21 years of age or older.

Will international students continue to be enrolled in Medicaid if they meet financial and residency requirements?

Each state Medicaid agency is evaluating the new rule and the injunctions to determine their response and next steps.

How will this regulation impact a state's Health Insurance Premium Assistance Program under Medicaid?

If international students are deemed not eligible to receive Medicaid, then enrollment in the premium assistance program will be for domestic students only. Premium assistance programs are meant to drive down state costs, which means those who are eligible for the premium assistance program won't be affected by the new rule.

Sources:

https://www.irs.gov/individuals/international-taxpayers/foreign-students-and-scholars

https://www.wsj.com/articles/judge-blocks-trump-administration-rule-to-disqualify-legal-immigrants-over-public-assistance-11570821531