Federal Policy
CMS Issues Interim Final Rule Imposing Work Reporting Requirements on Medicaid Beneficiaries
CMS has published an interim final rule establishing work reporting requirements for certain Medicaid beneficiaries. The rule requires states to implement reporting systems for work activities as a condition of eligibility for non-exempt populations. The rule takes effect July 31, 2026, and states must apply the requirement as a condition of eligibility for coverage on or after January 1, 2027, unless CMS grants a good faith exemption; a state may start earlier. This marks a significant shift in Medicaid eligibility policy affecting managed care organizations' enrollment processes, member communication obligations, and systems for tracking beneficiary compliance with work requirements.
Why it mattersMCOs will need to modify enrollment systems, develop member outreach protocols, and establish reporting infrastructure to support state work requirement verification while managing potential coverage disruptions and disenrollment volumes.