Comment on Interim Final Rule by the Centers for Medicare and Medicaid Services, Department of Health and Human Services: Medicaid Program; Community Engagement Requirement for Certain Individuals File Code CMS-2454-IFC
Introduction
The Centers for Medicare and Medicaid Services (CMS) within the United States Department of Health and Human Services (HHS) issued an interim final rule with comment period on June 3, 2026 (File Code CMS-2454-IFC), entitled, “Medicaid Program; Community Engagement Requirement for Certain Individuals,” hereafter the “Rule.” The Rule interprets and implements the Medicaid community engagement requirement, hereafter “work requirement,” included in Public Law 119-21 (popularly referred to as the One Big Beautiful Bill Act), which was enacted on July 4, 2025.
The statute requires states to implement a work requirement for certain Medicaid recipients in order to begin and maintain eligibility, starting no later than January 1, 2027. An individual can satisfy the work requirement in a given month by performing at least 80 hours of paid employment, job training, or community service, maintaining enrollment in an educational program at least half time, or by earning at least $580 (80 hours times the federal minimum wage of $7.25 per hour). Applicants must satisfy the work requirement for between one and three consecutive months before enrolling in Medicaid, and currently enrolled recipients must satisfy the work requirement for at least one and up to all months within a recertification period (not necessarily consecutive), with the numbers of months determined by each state. Individuals are generally subject to work requirements if they are between the ages of 19 and 64, are not pregnant, do not have a dependent child under the age of 14, are not covered by Medicare, do not qualify as medically frail, are not American Indians, and are not a member of a household that receives assistance from the Supplemental Nutrition Assistance Program (SNAP), though other specific exemptions are also available.
In general, the Rule appropriately interprets the statute’s work requirement and implements it in a way that makes reasonable tradeoffs to ensure administrative practicality while upholding the intent of the statute. For example, the Rule allows individuals to comply with the work requirement if their monthly average Modified Adjusted Gross Income (MAGI) is at least $580, even though MAGI includes income sources aside from earnings such as Unemployment Insurance. But because earnings represent the predominant source of MAGI for most Medicaid recipients, this provision largely maintains the strength of the work requirement while significantly reducing administrative burden. As another example, the Rule defines medical frailty on the basis of inability to work instead of solely based on diagnoses. While this could increase administrative burden for some individuals, it preserves the central purpose of the Rule that Medicaid recipients who can work should work. In these and other examples, the Rule makes reasonable judgements to uphold the wording and intent of the statute in a practical manner.
However, one aspect of the Rule requires clarification. In recognition of the overlapping populations subject to the SNAP and Medicaid work requirements, the statute arguably intended to exempt Medicaid recipients from the Medicaid work requirement if they were already in compliance with the SNAP work requirement—with compliance demonstrated by remaining an eligible member of a SNAP household despite being subject to a SNAP work requirement. However, depending on interpretation, the Rule may leave open the possibility that an individual, whose noncompliance has resulted in disqualification from the SNAP household, could nonetheless be exempt from the Medicaid work requirement, as long as the individual lives in the same household with another individual receiving SNAP. The Rule should clarify that in order to be covered by the SNAP exclusion, an individual must be a member of a SNAP assistance unit, or “SNAP household,” rather than a household in which at least one member receives SNAP, which I argue more accurately reflects the wording and intent of the statutory language. This would ensure that individuals who do not comply with the SNAP work requirement and thus lose eligibility for SNAP would still generally be subject to the Medicaid work requirement.
Without this clarification, I estimate that the Rule could be interpreted in such a way that up to 1.8 million Medicaid recipients will inappropriately be excluded from the Medicaid work requirement, based on my estimates using the Survey of Income and Program Participation (SIPP). This represents 16 percent of all Medicaid recipients who would otherwise be covered by the Medicaid work requirement. Of these 1.8 million recipients who would be affected, 0.8 million (43 percent) are not already in compliance with the Medicaid work requirement in a given month.
This comment proceeds by explaining the ambiguity surrounding the definition of household for the SNAP exclusion. I then argue that a narrow household definition is better supported by the wording and intent of the statute. Finally, I present estimates of the population affected by this ambiguity.
Read full Comment here.
