CMS Launches Nationwide Framework to Implement Medicaid Work Requirements

CMS Launches Nationwide Framework to Implement Medicaid Work Requirements

The Centers for Medicare & Medicaid Services (CMS) released an Interim Final Rule with Comment (IFC) requiring that certain adult Medicaid applicants and enrollees must, as a condition of Medicaid eligibility, meet an 80 hours per month work requirement, through employment, education, work programs, or community service. The rule establishes a nationwide operational framework designed to promote economic stability, self-sufficiency, and independence.

"The Working Families Tax Cut legislation made historic changes to the Medicaid program, and CMS is working closely with states to put those changes into action," said CMS Administrator Dr. Mehmet Oz. "This rule helps Americans build skills and independence through work, education, job training, or community service, creating new opportunities for themselves and their families."

Issued under Public Law 119-21, which CMS refers to as the Working Families Tax Cut (WFTC) legislation, the rule establishes the standards states must use to implement the statutory work requirement, including clear expectations for eligibility determinations, exemptions, verification, and state reporting requirements. It reflects extensive coordination with states and builds on CMS' ongoing work to modernize eligibility systems and improve beneficiary interactions with states, while improving accountability.

A new study from the Department of Health and Human Services' Office of the Assistant Secretary for Planning and Evaluation finds the new requirements could reduce poverty by as much as 2.9 million people depending on a variety of conditions such as employment availability.

This rule defines which adults ages 19 through 64 will be required to demonstrate work requirement activities. The rule also defines which individuals are not subject to the requirement because of health-related needs and other qualifying circumstances. These exemptions include, but are not limited to, individuals who are pregnant, postpartum, disabled, medically frail, American Indian or Alaska Native, parents or caregivers of young children and people with disabilities, and those who are already complying with similar requirements through the Supplemental Nutrition Assistance Program (SNAP) or the Temporary Assistance for Needy Families (TANF) program.

The rule also includes state data reporting requirements and establishes requirements for how states must assess and verify compliance and communicate the new requirement to Medicaid applicants and beneficiaries. These provisions are expected to promote transparency, reduce administrative burden, and ensure states provide clear, actionable guidance to new applicants and Medicaid beneficiaries on how to meet the new eligibility requirement.

CMS is supporting states as they implement the requirement through a combination of federal resources, technical assistance, and private-sector collaboration. This includes $200 million in Government Efficiency Grants authorized under the WFTC legislation to support state system modernization and administrative capacity, as well as more than $600 million in committed support from private-sector technology vendors to help states update eligibility and enrollment systems, and support for outreach to Medicaid beneficiaries. These investments build on CMS' broader modernization efforts, including expanding the use of automation, data integration, and real-time verification to improve efficiency, strengthen oversight, and enhance the beneficiary experience.

The work requirement must be implemented no later than January 1, 2027, in applicable states, although some states-such as Nebraska -has already implemented, and other states are considering early implementation.

This rule is being issued with comment period to remain consistent with the legislative directive and implementation timeline established by the WFTC legislation. This approach helps to ensure timely implementation while allowing CMS to continue to collect and consider public feedback.

For a fact sheet on the Medicaid Community Engagement Requirement Interim Final Rule (CMS-2454-IFC), visit: https://www.cms.gov/newsroom/fact-sheets/medicaid-community-engagement-requirement-certain-individuals-interim-final-rule-comment-period-cms .

To view the IFC on the Federal Register, visit: https://www.federalregister.gov .

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