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A Shift in Coverage: HHS Reinterprets “Federal Public Benefit” Under PRWORA

Client Alert
July 16, 2025

On July 10, 2025, the U.S. Department of Health and Human Services (HHS) rescinded a 1998 interpretation of “federal public benefit” as used in Title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). PRWORA was passed to restrict benefit eligibility for immigrants without legal status as well as many legal immigrants during their first few years in the U.S. The 1998 interpretation limited the scope of what qualified as a “federal public benefit,” allowing states to extend exemptions to immigrants for programs such as emergency services or public health.  

With this new notice, HHS intends to reverse what it calls “outdated exclusions” from the bill’s language, and newly includes the following programs as “federal public benefits” under PRWORA:

  • Certified Community Behavioral Health Clinics
  • Community Mental Health Services Block Grant
  • Community Services Block Grant (CSBG)
  • Head Start
  • Health Center Program
  • Health Workforce Programs not otherwise previously covered (including grants, loans, scholarships, payments, and loan repayments).
  • Mental Health and Substance Use Disorder Treatment, Prevention, and Recovery Support Services Programs administered by the Substance Abuse and Mental Health Services Administration
  • Projects for Assistance in Transition from Homelessness Grant Program
  • Substance Use Prevention, Treatment, and Recovery Services Block Grant
  • Title IV-E Educational and Training Voucher Program
  • Title IV-E Kinship Guardianship Assistance Program
  • Title IV-E Prevention Services Program
  • Title X Family Planning Program

The notice establishing the revised policy took effect immediately upon publication in the Federal Register on July 14, 2025. Comments on the proposed rule are due no later than 11:59 p.m. Eastern Time on August 13, 2025.

To learn more about “federal public benefits” under PRWORA and how this policy shift could impact your health care operations, please contact BMD Healthcare Member Daphne Kackloudis at dlkackloudis@bmdllc.com or Attorney Jordan Burdick at jaburdick@bmdllc.com.

Health LawHealthcare PolicyU.S. Department of Health and Human ServicesPRWORA
Client Alert

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Corporate Transparency Act to be Re-evaluated

February 28, 2025Recent federal rulings have impacted the enforceability of the Corporate Transparency Act (CTA), which took effect on January 1, 2024. While reporting requirements were briefly reinstated, FinCEN has now paused enforcement and is reevaluating the CTA. Businesses are no longer required to submit reports until further guidance is issued. For updates and legal counsel, contact BMD Member Blake Gerney.Client Alert

Ohio Recovery Housing Operators Beware: House Bill 58 Seeks to Make Major Changes

February 26, 2025Ohio House Bill 58 proposes significant changes to recovery housing oversight, granting ADAMH Boards authority to inspect and investigate recovery residences. The bill also introduces a Certificate of Need (CON) program, requiring state approval for major facility changes. OMHAS will assess applications based on cost, quality, accessibility, and financial feasibility. The bill also establishes a recovery housing residence fund to support inspections. For more information, contact BMD attorneys Daphne Kackloudis or Jordan Burdick.Client Alert

January 2025 Notice of Proposed Rulemaking Brings Notable Changes to HIPAA Security Rule

February 25, 2025In January 2025, the U.S. Department of Health and Human Services proposed amendments to the HIPAA Security Rule, aiming to enhance cybersecurity for covered entities (CEs) and business associates (BAs). Key changes include mandatory compliance audits, workforce training, vulnerability scans, and risk assessments. Comments on the proposed rule are due by March 7, 2025.Client Alert

Corporate Transparency Act Effective Again

February 20, 2025The federal judiciary has issued multiple rulings on the enforceability of the Corporate Transparency Act (CTA), which took effect on January 1, 2024. Previously, enforcement was halted nationwide due to litigation in Smith v. U.S. Department of the Treasury. However, on February 18th, the court lifted the stay, reinstating the CTA’s reporting requirements. Non-exempt entities now have until March 21, 2025, to comply. Businesses should act promptly to avoid civil penalties of $591 per day and potential criminal liability.
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