July 22, 2025
Attorney Generals from across the country are suing the Trump Administration based on recent changes to the interpretation of ‘federal public benefit” in a 1998 federal statute that guides how states can use federal funds when it comes to providing care for certain immigrants. The NYS Council hosted a Webinar last Friday for all members, featuring analysis and guidance on this new interpretation from our attorneys at Feldesman, LLP. You can view the Webinar and review the PowerPoint slides on our Website which is here: www.nyscouncil.org. As always, you will need a UserName and Password to access the ‘Archived Events’ section of our Website that is under the ‘Events’ tab on our homepage. If you need Website credentials, please contact Cindy Levernois at: cindy@nyscouncil.org and Cindy will assist you. Please note: Over the past several months, we have hosted several recent Webinars and Learning Collaborative meetings. All recordings and slides used are now embedded in this section of our Website for your convenience.
As you will recall, the NYS Council began messaging our members about the change in interpretation the same day the information came out from HHS (July 14). Since the press release did not mention a provision in the 1998 statute that exempts nonprofit charitable organizations from having to verify immigration status, our attorneys were quick to analyze the statute and lower the temperature a bit on this one by reminding NYS Council members that the exemption in the statute exempts nonprofit charitable organizations from having to verify immigration status since HHS failed to mention this in its Press Release.
There is a comment period in progress however the Rule reinterpretation was effective last Monday (July 14). To refresh your memory, here’s the core of the issue:On July 14, the Department of Health and Human Services issued a notice reinterpreting the term “Federal public benefit” used in Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). The new definition will prohibit programs funded under the Certified Community Behavioral Health Clinics Program, Community Mental Health Services Block Grant, Substance Use Prevention, Treatment, and Recovery Services Block Grant, including grant programs administered by SAMHSA, to be provided to individuals who are not U.S. citizens or “qualified aliens.” At the same time, PRWORA exempts nonprofit charitable organizations from any requirement to determine, verify, or otherwise require proof of eligibility of any applicant for benefits.
Under current law, nonprofit charitable organizations are exempt from the requirement to verify citizenship-related eligibility for federal public benefits.
- However, it is important to note that a provider organization may have access to eligibility information relating to Medicaid or State safety-net programs, which may, in turn, include immigration status information. If an organization choses to verify, even though it is a nonprofit charitable organization that is not required to do so under the Act, the organization may be required to comply with the procedures set forth in this Guidance and provide benefits only to those whom you verify to be U.S. citizens, U.S. non-citizen nationals or “qualified aliens.” In such cases, organizations should consult with legal counsel to confirm that this is the correct course of action.
- Notably, organizations that are either governmental entities or for-profit corporations should also consult with counsel regarding potential verification requirements.
Here’s a link to the Law: Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) 1996 welfare reform legislation. Under PRWORA, individuals who are not U.S. citizens or who are not “qualified aliens” are not eligible for federal public benefits as defined by the statute.
Here’s the Notice in last week’s Federal register:https://www.federalregister.gov/documents/2025/07/14/2025-13118/personal-responsibility-and-work-opportunity-reconciliation-act-of-1996-prwora-interpretation-of?mkt_tok=NzczLU1KRi0zNzkAAAGbrm6pcERe3b723b6bf-QEENhnwqBrgYK1QQPAlsTQSlXELKY8_qhy-VSb-I0jKBTZjCMPSMB477lUndNsGIvhVuqP49LpXL6tewpj_62zhVgThe NYS Council will be preparing comments in response to the HHS 30-day comment period now open through August 17.
Here’s the article on the AGs lawsuit:
(Politico, 7/22/25)
New York and 20 other states are suing President Donald Trump’s administration over a policy barring many federal health and social services programs from serving certain immigrants, Attorney General Letitia James announced Monday.
Impacted health programs include Title X family planning clinics, community health centers and certified community behavioral health clinics.
The lawsuit, which was filed in Rhode Island federal court, alleges the change is unconstitutional and that the federal government acted unlawfully by not following the required rulemaking process.
“For decades, states like New York have built health, education, and family support systems that serve anyone in need,” James said in a statement. “These programs work because they are open, accessible, and grounded in compassion. Now, the federal government is pulling that foundation out from under us overnight, jeopardizing cancer screenings, early childhood education, primary care, and so much more.”
The lawsuit includes declarations from city and state officials who oversee health, mental health and addiction-related services that would be newly considered public benefits under the Trump administration’s reinterpretation of the Personal Responsibility and Work Opportunity Reconciliation Act.
The officials said their agencies have no way to demonstrate and verify service recipients’ compliance with the new policy and therefore face the loss of federal funds.
For example, the state Office of Addiction Services and Supports received about $144.5 million in the 2024 fiscal year under the substance use prevention, treatment and recovery services block grant, according to one declaration.
That was roughly 19 percent of the office’s annual funding to not-for-profit providers and local county governments for substance use prevention and treatment.
In New York City, the policy could jeopardize a $1.6 million grant to the Department of Health and Mental Hygiene to divert young people from the juvenile justice system to community-based mental health and addiction services, officials said.
“Mental illness does not discriminate based on legal status, and to ensure all of our residents are safe, neither should funding to programs that prevent crimes from happening from the start,” Mayor Eric Adams said in a statement Monday.
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Here’s a gift article from Modern Healthcare looking at the just released analysis of costs associated with implementation of the OBBBA Law. (This is an updated version of earlier CBO estimates):
————————(Politico, 7/22)
Wall Street could be the state budget’s savior next year — or a major headache.
Gov. Kathy Hochul and the Democratic-led state Legislature are already contending with a $3 billion hit to the Essential Plan taking effect next fiscal year, which provides health coverage to about 1.6 million low-income New Yorkers.
The cut is being heaped on top of a pre-existing $7.5 billion budget gap.
And if the financial industry — the engine that fuels New York’s economy and tax revenue — goes south, the consequences for Albany could be massive.
“If we get hit not just with the federal restructuring, but with an economy that starts to slow down or tank — that’s where we could get that perfect storm,” Comptroller Tom DiNapoli told Playbook in an interview on Monday.
That kind of financial turbulence would come at a bad time for the governor, who’s running for a second full term next year.
She stands to be hit with political crosscurrents from lefty Democrats who’ll push for tax hikes and from wealthy New Yorkers who contribute an outsize share of taxes to the state’s coffers.
State officials are still assessing the fallout from President Donald Trump’s megabill, a sweeping federal tax-and-spend package that includes significant cuts to Medicaid and food stamps.
Hochul told reporters Monday she plans to roll out a “swat team” to find ways of saving money as the state also works to address the $750 million being slashed from the Essential Plan — cuts which will take effect Jan. 1.
She also defended her $2 billion rebate program, which was approved in the May state budget and will send New Yorkers cash this fall. Hochul insisted the money, which was pared down from the original $3 billion proposal, will help people make ends meet.
“Now more than ever families across New York will appreciate what I did for them and putting money back in their pockets,” the governor said.
DiNapoli, a Hochul ally, was not as enthusiastic about the check plan, which Hochul has framed as a way to bust inflation.
“I wouldn’t say it was a mistake, but that creates spending that has to be balanced against these other cuts,” he said. “Rebates are going to happen, hopefully that will help people.”
DiNapoli expects finding ways to offset the loss of $750 million in the current fiscal year will be relatively easy. The harder part comes next year when lawmakers and Hochul negotiate the state budget.
“My guess is everything will have to be on the table — cuts, tax increases,” DiNapoli said. New York Democrats have already trained their ire on Republicans over the federal cuts, pre-emptively blaming them even before the mega-bill became a mega-law.
There are limits, though, to the blame game. Hochul will still need to get a balanced budget on the books months before voters render their verdict on her tenure.
“It could be a tough budget,” DiNapoli said. “It’s an election year and there are more pressures in an election year.”