What could the end of DACA mean for your employees’ health and welfare benefits?

DACA employee benefits

If President Trump’s decision to rescind the Deferred Action for Childhood Arrivals (DACA) takes effect, it’s likely that thousands of undocumented workers will lose their work permits and protected status under the program established by President Obama’s executive order. Businesses that knowingly employ these workers could face steep penalties, so it’s possible these employees would need to be terminated — and could even be deported — which could pose numerous employee benefits issues for employers.

While several groups and members of Congress are seeking legislation to protect DACA-covered workers and President Trump could extend the deadline if Congress doesn’t act, employers need to be aware of some benefit issues, should the rescission remain unchanged.

For instance, do the normal rules for continuation of health care coverage under COBRA apply to DACA-covered employees when their work permits expire? That’s just the tip of the iceberg. There are other benefits issues to consider, many of which carry a wide range of legal, financial, administrative and employee/public relations implications.

Some employers may have viable strategies to keep these individuals employed — either by helping them stay in the U.S. through another visa or a similar employment authorization program, or by employing them overseas to work remotely or for a non-U.S. branch or subsidiary.

To be prepared for any outcome, consider taking these steps now:

  1. Review your hiring practices and employment policies to determine if non-U.S. citizens with work permits are currently employed. If so, note the date each employee’s work permit expires. This should be a best practice for all employers regardless of the DACA rescission issue.
  2.  Be ready to ask for updated permits when employees’ existing authorizations expire. This is the case for DACA-covered employees as well as non-DACA-covered employees. However, be aware it’s against the law to specifically ask if an individual’s work permit is due to DACA.
  3. Decide how to approach the DACA rescission in terms of continued employment of DACA-covered employees and benefits offered to those employees. It may be difficult to aim an approach solely at DACA-covered employees, given that employers cannot ask employees whether their work permits are due to DACA or some other work visa program, and most employers may not want non-DACA-covered employees to be inadvertently included in the approach.
  4. Be prepared to respond to inquiries from affected employees concerned about their continued employment and benefits after the effective date of the DACA rescission.
  5. Review your current employee benefit plan documents and policies, including health, life, disability and account-based plans (e.g. flexible spending accounts, health savings accounts or health reimbursement accounts) to determine how your employees are currently treated when terminated (and, potentially, are deported from, or otherwise leave, the U.S.). You may need to amend these documents, depending on how you decide to treat your DACA-covered employees, absent legislative or judicial relief. Depending on the decisions you make, you should contact your carriers and vendors (including, for example, the plan’s stop-loss provider and third-party administrators, if applicable) to ensure they understand your wishes and that your health plans and vendors can accommodate them.
  6. Monitor DACA-related legislative and regulatory developments, including the issuance of any government guidance identifying employers’ legal obligations, effective dates, and special timing rules or other employment-based considerations impacting former DACA-covered employees.

Absent Congressional action and/or successful litigation challenges, the rescission will take effect March 5, 2018. Companies should take steps now to determine how they will handle employees that could be affected by the rescission.


Kathleen Rosenow, Ben Lupin and Rich Gisonny are senior regulatory advisors in Willis Towers Watson’s Human Capital Benefits’ Research and Innovation Center.

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