Understanding the New Medicaid Work Requirements

Recent federal developments could bring significant changes to Medicaid eligibility for some adults beginning in 2027. While many details will continue to develop at the state level, the Centers for Medicare & Medicaid Services (CMS) has now released guidance outlining how states must implement new Medicaid work requirements under federal law.

Because Medicaid planning is an important part of special needs and elder law planning, we want to keep our clients and professional partners informed about changes that may affect access to benefits in the future.

Below is a summary of what we know today and some of the questions that remain as states begin preparing for implementation.

The Centers for Medicare & Medicaid Services (CMS) recently issued an Interim Final Rule providing guidance to states on implementing Medicaid work requirements under the One Big Beautiful Bill Act (OBBBA)

Under the rule, states will generally be required to implement work requirements for certain Medicaid recipients beginning January 1, 2027, although states may choose to implement them sooner.

Who Could Be Affected?

The requirements are directed toward certain able-bodied adults between ages 19 and 64 who do not have dependents and who receive coverage through Medicaid expansion programs. These are commonly referred to as the Affordable Care Act (ACA) coverage, Healthy Michigan, or Obama-Care.  It does not impact people who receive SSI or Social Security Disability or who are over 65 years old.  It does not impact long-term-care Medicaid or special Medicaid programs like Medicaid for those impacted by the Flint water contamination.

To maintain eligibility for Healthy Michigan, affected individuals may be required to demonstrate one of the following:

• At least 80 hours per month of employment
• At least 80 hours per month of community service or participation in a qualifying work program
• Monthly income equal to at least 80 hours of work at minimum wage
• Part-time enrollment in an educational program

Individuals may be able to combine qualifying activities to meet the monthly requirement.

What About Medical Conditions?

One of the most closely watched portions of the rule involves exemptions for individuals who are considered medically frail.

Rather than providing a nationwide list of qualifying conditions, CMS is requiring each state to develop its own standards and criteria. States must create lists that are consistent, supportable, and subject to review over time.

The rule also states that an individual’s physical, mental, or behavioral health condition must significantly impair their ability to meet work requirements in order to qualify for this exemption.

As states develop their policies, the exact scope of these exemptions may vary.

Verification and Documentation Requirements

The rule includes temporary flexibility during the initial implementation period.

In 2027, states must accept self-attestation from individuals who report that they are meeting work requirements or qualify for an exemption when the state does not already have information available.

Beginning January 1, 2028, states generally will be required to obtain additional documentation when compliance cannot otherwise be verified. Individuals classified as medically frail may still self-attest initially, but supporting documentation will be required at future renewal periods.

Timing Matters

The rule also outlines when individuals must demonstrate compliance.

For new applicants, states may require proof of compliance for one to three consecutive months immediately before the application date.

For existing Medicaid recipients, states may require proof during the period between eligibility reviews and renewals, depending on how the state structures its program.

What Happens Next?

While we don’t have all the details at this time, the regulations appear to be limited to ACA/Healthy Michigan participants. Even then, there are exemptions for disabilities and those who are “medically frail”.  Michigan will have the ability to determine what qualifies as “medically frail”.   The Interim Final Rule provides the federal framework, but many important details will be determined at the state level. States will now begin developing their own implementation procedures, exemption criteria, verification processes, and compliance systems.

As these requirements move closer to implementation, individuals who rely on Medicaid coverage should pay close attention to updates from their state Medicaid agency and seek guidance if they have questions about how future changes could affect their eligibility.

Bassett Murray Law Group PLLC will continue monitoring developments and providing updates as additional information becomes available.

If you have questions about Medicaid planning, long-term care planning, or protecting eligibility for benefits, we encourage you to contact Ann Arbor office at 734-930-9200 or our Petoskey office at 231-427-2292 to discuss your situation.