Important Medicaid changes under H.R. 1

H.R. 1 was enacted as Public Law 119-21 on July 4, 2025. CMS refers to the law as the “Working Families Tax Cut” legislation. Section 71119 created a Medicaid community engagement requirement for certain adults as a condition of Medicaid eligibility. 


For people who are subject to the requirement, community engagement generally means meeting one of the following standards for a month:
 

• Working at least 80 hours
  
• Performing at least 80 hours of community service
  
• Participating in a qualifying work program for at least 80 hours
  
• Being enrolled at least half-time in an educational program
  
• Combining qualifying activities for a total of at least 80 hours
  
• Meeting the applicable monthly-income standard
  
• Meeting the separate income calculation available for qualifying seasonal workers
   

Exact reporting methods, verification processes and available support will be established by each state.

States generally must implement the Medicaid community engagement requirement by January 1, 2027. A state may choose to begin earlier. States must conduct outreach to potentially affected Medicaid members before implementing the requirement.


Because implementation dates and processes may vary, providers and members should use the applicable state Medicaid website for the latest information. 


State timelines may vary: Requirements generally begin Jan. 1, 2027, but a state may implement them earlier. Visit your state Medicaid website for current dates and instructions.

Questions are most likely to come from Medicaid applicants or members who are:
 

• Ages 19 through 64
  
• Not pregnant
  
• Not enrolled in or entitled to Medicare
  
• Covered through the Medicaid adult group, commonly associated with Medicaid expansion
  
• Covered through certain Section 1115 demonstrations that provide minimum essential coverage
  
  

The requirement does not apply to every Medicaid member or every Medicaid eligibility category. CMS identifies multiple excluded or exempt populations, including certain individuals who are:
 

• Pregnant or receiving postpartum Medicaid coverage
  
• Medically frail or living with certain disabilities or significant medical needs
  
• Parents, guardians, caretaker relatives or family caregivers of a child age 13 or younger, or of a person with a disability
  
• American Indian or Alaska Native
  
• Former foster care youth
  
• Veterans with a total disability rating
  
• Participating in a qualifying substance use treatment or rehabilitation program
  
• Meeting certain TANF or SNAP requirements
  
• Inmates of public institutions

Additional exceptions and state options may apply. Only the state Medicaid agency can determine whether a particular person is subject to the requirement or qualifies for an exclusion, exemption or hardship exception.

Providers can serve as trusted sources of awareness and referral. Your role may include:
 

• Letting patients know that Medicaid eligibility rules are changing for certain adults
  
• Encouraging patients to read and respond promptly to notices from their state Medicaid agency
  
• Directing patients to their state’s official Medicaid website, eligibility office or approved support resources
  
• Referring patients to the member services number on their health plan identification card when they have questions about current benefits or plan contacts
  
• Continuing to follow established eligibility-verification processes before providing nonemergency services
  
• Supporting continuity of care through existing clinical, care-management and social-needs referral processes

Providers should not:
 

• Decide whether a patient is subject to the requirement
  
• Determine whether a patient qualifies for an exemption, exclusion or hardship exception
  
• Track work, school, volunteer or other qualifying hours
  
• Verify or certify a patient’s overall compliance
  
• Collect or submit work-activity documentation unless a specific, state-approved process expressly instructs the provider to supply specific medical information
  
• Report a patient as compliant or noncompliant
  
• Promise that a patient will keep or lose Medicaid coverage
  
• Interpret a coverage notice as legal advice
  
• Discourage patients from applying, reapplying, responding to a notice or seeking an appeal
   

CMS places responsibility for identifying affected individuals, verifying compliance, providing notices and making resulting eligibility decisions on state Medicaid agencies, not treating providers.
 

Providers are not responsible for determining eligibility, tracking compliance or reporting work activities.

Direct members to authoritative, state-approved resources:
 

1. The member’s state Medicaid agency website
   This should be the primary source for implementation dates, reporting instructions, exceptions, documentation requirements and contact information.
   
2. The Medicaid eligibility or enrollment office identified in the state notice
   Members should follow the instructions and deadlines appearing in notices they receive.
   
3. The member services number on the health plan identification card
   Member services may help the individual understand existing plan benefits and locate applicable state contacts. Eligibility decisions remain with the state.
   
4. State-approved navigators, eligibility partners or community resources
   Include these only when the state has formally identified or approved them.
   
5. The state’s fair-hearing or appeal information
   If the member disagrees with an eligibility action, direct them to the appeal or fair-hearing instructions in the state’s notice.

Find information for your state
Select your state to visit its official Medicaid resource for:

• Effective dates
  
• Who may be affected
  
• Qualifying activities
  
• Exemptions and exceptions
  
• Reporting instructions
  
• Contact information
  
• Appeal or fair-hearing information
  

If the state cannot verify that a person has met the requirement, the state must send a notice of noncompliance and provide 30 calendar days for the person to demonstrate that:

• The requirement was met
  
• The requirement does not apply
  
• An exclusion, exemption or applicable exception applies
   

If the person does not resolve the issue within the required period, a Medicaid application may be denied, or an enrolled member may be disenrolled. A person who is disenrolled may reapply at any time and will be assessed for compliance during the new application process.

A coverage change does not necessarily mean the person has no available next step. Encourage the patient to:

• Read the entire state notice
  
• Act before the deadline in the notice
  
• Contact the state using the information in the notice
  
• Ask the state whether an exclusion, exemption or hardship exception may apply
  
• Follow the state’s appeal or fair-hearing instructions if they disagree with the decision
  
• Reapply when appropriate
   

Providers should continue to use their normal eligibility-verification workflow. If coverage is inactive, follow the practice’s established procedures for discussing coverage status, scheduling, billing, financial assistance and continuity of care. Do not independently characterize the patient as noncompliant.