CMS Releases Guidance on Medicaid Work Requirements  

The Centers for Medicare & Medicaid Services (CMS) on Monday released initial released initial guidance for states on implementing Medicaid community engagement requirements (PDF), also referred to as work requirements, enacted by the One Big Beautiful Bill Act (P.L. 119-21, PDF). The CMS is required to issue an interim final rule on the Medicaid work requirements by June 1, 2026. The agency stated that it expects to release more additional related guidance.   

The guidance provides states with additional clarification on how the agency defines an “applicable individual,” clarifies exclusions and exceptions to the requirements, specifies what will qualify towards meeting engagement requirements, and details exceptions for short-term hardship events. The guidance also specifies what options states have for initial beneficiary outreach and compliance review periods, allowing states to require that applicants demonstrate that they have met the requirements one to three months preceding verification. The guidance also states that based on new Medicaid eligibility redeterminations, applicants will need to demonstrate compliance with work requirements at least every six months. States must use reliable, available data to verify compliance before requesting additional data and must provide notice to beneficiaries of noncompliance, allowing them 30 days to respond before moving to terminate.   

Lastly, the guidance provides information to states on how the CMS will evaluate requests for a “good faith effort” extension of the Medicaid work requirements. The agency expects approvals for these requests will be limited to states making meaningful effort to implement and experience severe or unexpected issues that limit progress. The agency also provided additional detail regarding its planned distribution of Government Efficiency Grants, which will provide states with $100 million distributed equally among all 50 states and District of Columbia, and an additional $100 million distributed to the 50 states and the District of Columbia based on the share of individuals subject to community engagement relative to the total eligible population across all states and the district as of March 31, 2025.