Treasury and IRS Move to Protect Health Care Benefits for Eligible Americans

Proposed Rules Implement Working Families Tax Cuts Reforms to Prevent Fraud and Abuse of the Premium Tax Credit

IR-2026-121, Oct. 14, 2026

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued proposed regulations to implement President Trump’s Working Families Tax Cuts reforms to the Premium Tax Credit (PTC), a refundable tax credit that helps eligible American taxpayers afford health insurance purchased through the Health Insurance Exchanges.

“Hardworking American taxpayers should not be forced to subsidize health care for people who are ineligible under federal law,” said Treasury Secretary Scott Bessent.  “Today’s proposed rules implement the common-sense reforms enacted by the Working Families Tax Cuts to close eligibility loopholes and ensure taxpayer-funded Premium Tax Credits are reserved for eligible Americans.  Under President Trump, this Administration is cracking down on fraud and corruption; holding bad actors accountable; lowering health care costs for Americans; and restoring integrity to our tax code and health care system.”

"The proposed rules protect eligible taxpayers while strengthening the integrity of the Premium Tax Credit," said IRS Chief Executive Officer Frank J. Bisignano.  "The enhanced verification measures are designed to curb improper claims, ensuring these vital tax benefits go strictly to the hardworking Americans who qualify for them."

“The Trump Administration’s whole-of-government approach to fighting fraud, waste, and abuse is built on the idea that an ounce of prevention is worth a pound of cure,” said CMS Administrator Dr. Mehmet Oz.  “Ensuring health programs serve only those who are eligible is one of the most effective ways to protect these programs and the taxpayers who support them.  With today’s proposed rules, the Treasury Department is taking another step forward in our collaborative effort to protect taxpayer dollars by shutting down waste and fraud before a single dollar leaves the building.”

Protecting taxpayer-funded benefits for eligible Americans

The proposed rules put the Working Families Tax Cuts’ Premium Tax Credit reforms into effect which strengthen eligibility checks, close gaps in the verification process, and help ensure taxpayer-funded subsidies go only to eligible American taxpayers.  The Trump Administration’s Task Force to Eliminate Fraud exposed the need for stronger safeguards to protect the integrity of the Federal Marketplace.  As part of that work, Centers for Medicare & Medicaid Services (CMS) announced the removal of more than 760,000 unverified “phantom” enrollees from the rolls of the Affordable Care Act (ACA), resulting in $2.2 billion in savings and sending nearly 1 million Americans $500 each who had been overcharged for their Obamacare coverage by the Biden Administration.

The Treasury and IRS proposed rules:

• Strengthen Eligibility Standards: Beginning in 2027, ensures taxpayer-funded health insurance subsidies go only to Americans who qualify under federal law.
• Protect Taxpayer Benefits for Eligible Americans: Restricts PTC eligibility to U.S. citizens, U.S. nationals, and certain lawfully present noncitizens.
• Close Verification Gaps: Applies common sense PTC eligibility checks and adds new verification criteria for any advance PTC payments.

The proposed regulations are available in the Federal Register.  The changes to Exchange procedures and operations necessary to implement the verification requirements are expected to be addressed in parallel proposed regulations issued by HHS under related provisions of the same statute.