Treasury and the IRS have proposed rules that would limit the Affordable Care Act’s premium tax credit to U.S. citizens, U.S. nationals and certain lawfully present noncitizens, starting in 2027. These are proposals, not final rules. The public can comment until November 30, 2026, and nothing in them changes anyone’s credit today.
The Treasury announcement came October 14. The notice was published in the Federal Register the next day as a notice of proposed rulemaking, which is the formal step that opens a rule to public comment before it can be finalized.
What the proposal says
The premium tax credit is a refundable credit that helps people afford insurance bought through the health insurance Exchanges, also called the Marketplace. Treasury says the proposal would write the new eligibility limits into rules and add verification steps for advance payments of the credit, which are sent to insurers each month to lower premiums.
Treasury Secretary Scott Bessent said in the announcement that “hardworking American taxpayers should not be forced to subsidize health care for people who are ineligible under federal law.” IRS Chief Executive Officer Frank Bisignano said the aim is to make sure the benefits go to people who qualify.
Anyone who buys a Marketplace plan, or helps a relative or a neighbor do it, now has a concrete question: does everyone on the policy have a status that would still qualify for the credit in 2027, and could income or household details need proving?
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Which immigration statuses would keep the credit
HealthCare.gov says that starting January 1, 2027, under a law change, only three groups will qualify for savings: lawful permanent residents (green card holders), Cuban or Haitian entrants, and migrants from the Compact of Free Association countries.
The same page lists many other statuses that can still buy Marketplace coverage but would not get the credit or cost-sharing discounts. They include refugees, asylees, people paroled into the country and holders of Temporary Protected Status. It adds that recipients of Deferred Action for Childhood Arrivals “aren’t eligible for Marketplace coverage.”
Treasury describes its proposal as the way to carry out those reforms, which it calls the Working Families Tax Cuts changes. The final text could still change after comments.
New proof rules and a bigger repayment bill
The Federal Register notice runs well beyond immigration status. Starting in 2028, a month would count as a coverage month for the credit only if the Exchange has verified the enrollee’s residence and citizenship, national status or lawful presence. For months with advance payments, the Exchange would also have to verify income, family size and other coverage.
One proposal would hit households that guess their income wrong. The notice would eliminate the cap on repaying excess advance payments for tax years beginning after December 31, 2025, so the full excess would have to be repaid. The Exchange premium amounts reported on Form 1095-A, the statement Marketplace customers use to file taxes, would also leave out the share tied to family members who are not eligible.
Some relief is built in. Verification could be waived for people who enroll after a change in family size, such as a birth, an adoption or a marriage. Plans bought through income-based special enrollment periods without a qualifying event would not count as qualified health plans for the credit.
The enforcement push behind it
The proposal follows a Marketplace crackdown. In a September 22 announcement, the Centers for Medicare & Medicaid Services (CMS) said about 315,000 unauthorized enrollments were canceled, affecting more than 760,000 people, and that roughly $2.2 billion in subsidies was expected to be returned.
CMS Administrator Dr. Mehmet Oz said every dollar lost to fraud is taken from taxpayers and the Americans the programs are meant to serve. CMS also issued termination notices to more than 200 agents and brokers this year and now requires a verifiable Social Security number or immigration document number for non-newborn applicants on broker-assisted applications.
How to comment on the proposed rules
Written comments on the proposal, filed under REG-101576-26, are due November 30, 2026. The Federal Register notice says they can be filed electronically at regulations.gov under docket IRS-2026-1420-0001 or mailed to the IRS in Washington. A telephone hearing is set for December 8 at 10 a.m. Eastern.
Anyone who wants to speak must send a topic outline by November 30. Requests to attend by phone are due by 5 p.m. Eastern on December 4, sent to publichearings@irs.gov. The hearing is cancelled if no outlines arrive.
Open enrollment is close
Open enrollment for 2027 Marketplace plans runs November 1 through January 15 each year, according to HealthCare.gov. That window opens within days, while the proposed rules are still open to comment and unfinished.
People who rely on the credit before Medicare starts at 65 face a plain choice: shop with today’s rules in mind and then watch for the final version. Anyone who has not yet looked at other help with health costs has a good reason to do it before the new year.
Shopping for 2027 coverage before the rules are final?
Health coverage costs can swing on one rule change, and many people never apply for the programs that run alongside the Marketplace. A missed application can mean paying full price for premiums and prescriptions that other programs would have cut.
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
