Per the 2025 reconciliation law (H.R. 1), most states must begin conditioning Medicaid eligibility for adults on meeting work or community engagement requirements no later than Jan. 1, 2027, and CMS issued final rules in late 2025 spelling out the exemptions and operational requirements states must follow, per coverage of the rules by KFF Health News. As of May 2026, state Medicaid agencies are in the middle of the build: writing systems, contracting vendors, and deciding whether to start early through waivers or wait for the deadline.
What the law requires
Adults ages 19 and older subject to the rule must document roughly 80 hours per month of work, education, job training, or community engagement, or a combination, as a condition of eligibility. The law also directs states to conduct eligibility redeterminations twice a year rather than annually for the expansion population, and it narrows eligibility for certain immigrant categories starting in late 2026, per state agency impact trackers such as California's. States that fail to comply with the work requirement face federal funding reductions.
What CMS finalized
The late-2025 CMS rules detail who is exempt: people who are medically frail, veterans as defined in the statute, caregivers of children or disabled family members, students, people in treatment for substance use disorder, and others, per the rules and summaries by KFF and the Center on Budget and Policy Priorities. The rules also set reporting expectations, notice requirements, and a transition period during which enrollees who fail the requirement can lose coverage. States may implement earlier through Section 1115 demonstration waivers or state plan amendments, and KFF's tracker shows several pursuing that route.
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Who is affected?
The Congressional Budget Office projected the provision, combined with the law's other eligibility changes, will add substantially to projected coverage losses over the decade, with many people who lose coverage expected to be working or exempt on paper but tripped up by reporting burdens. Enrollment in the 40 expansion states plus the District of Columbia is where the requirement bites; the ten non-expansion states are differently situated.
What it means for you
If you are on Medicaid in an expansion state, nothing changes on Jan. 1, 2026 — but your state will begin sending notices about the new rules as 2026 wears on, and keeping your contact information current with your Medicaid agency is the single most practical step, because missing a notice can start a closure. Check your state Medicaid agency's website for its implementation timeline and exemption list, since each state's details vary. If you think you qualify for an exemption, ask your agency in writing and keep the response.
What happens next?
Through the rest of 2026, watch for state waiver submissions, CMS approval letters, and the rollout of state reporting portals, some of which are being tested in late 2026 for a Jan. 1, 2027 go-live. Legal challenges to work requirements are possible, and implementation timelines have historically slipped under litigation and systems delays. The authoritative source for your state remains your state Medicaid agency, with CMS guidance posted at Medicaid.gov.