Medicaid's 2027 work requirement covers adults in the expansion group
A diagnosis alone won't exclude a patient. The condition must also significantly impair the patient's ability to comply.
Head of Growth and Operations, JotPsych
You're planning next year, and many of your patients have Medicaid. The expansion group is adults ages 19 to 64 covered through the Affordable Care Act's Medicaid expansion, offered in 40 states and the District of Columbia.
Is 19 to 64 years old
Has no Medicare
Is in the Medicaid expansion group, or in a section 1115 demonstration with minimum essential coverage and not otherwise eligible to enroll under the state plan
Isn't in one of the rule's 10 excluded groups
80 hours of work
80 hours of community service
80 hours in a work program
Half-time enrollment in an educational program
80 hours of those activities combined
Monthly income of at least 80 hours at the federal minimum wage
For a seasonal worker, that income as a 6-month average
The interim final rule of June 3, 2026 sets who is covered (42 CFR 435.551) and what counts for a month (42 CFR 435.552). Your covered patients show 1 or more months, as your state sets, at their first renewal on or after your state's start date.
- Pull your Medicaid patients ages 19 to 64. Your patients with Medicare aren't covered, per section 435.551. Your patients in a section 1115 demonstration that provides minimum essential coverage are covered too, if they aren't eligible to enroll under your state plan.
- Find the patients in the expansion group. The group includes adults who aren't pregnant, aren't enrolled in another mandatory Medicaid group, and have household income up to 133% of the federal poverty level, per section 435.119. Your state must send each of them a notice of the requirement, per section 435.561. Ask whether they got one.
- Check each patient against the 10 excluded groups. Ask your patient about the groups your notes don't show, such as parents of a child 13 or under, per section 435.554.
- Ask your state which treatment programs count. Your patients participating in a drug or alcohol treatment program are excluded. The Food and Nutrition Act’s definition covers only programs run by private nonprofits or publicly operated community mental health centers. Your state decides which programs qualify. Your state can set a minimum time in them, per the interim final rule.
- Check both parts of the medically frail definition. First, your patient has a condition on your state's medically frail list, which your state builds from items (A) to (E) of the definition. Second, the condition significantly impairs your patient's ability to comply with the work requirement. Your patient's diagnosis alone meets only the first part.
- Code each condition from your state's list that your notes document. Your state checks its own records first, including 12 months of claims, before it asks your patient for proof, per section 435.557. Your claims can show your state the first part of the definition.
Meets the definition of Medicaid's former foster care group
Is an Indian, as 42 CFR 447.51 defines the term
Is a parent, guardian, caretaker relative, or family caregiver of a child 13 or under or of a person with a disability, as the rule defines each
Is a veteran with a disability rated 100% by the Department of Veterans Affairs, temporary or permanent
Is medically frail or otherwise has special medical needs
Meets the work requirements of the state's Temporary Assistance for Needy Families program
Lives in a household that gets Supplemental Nutrition Assistance Program benefits, and isn't exempt from that program's work requirement
Is participating in a qualifying drug or alcohol treatment program
Is an inmate of a public institution
Is pregnant or entitled to postpartum coverage
Under 42 CFR 435.554(b), the work requirement doesn't apply to a patient in any one of these groups. Your patient's eligibility notice from the state must say whether the patient is in one of these groups, per 42 CFR 435.556(d).
Substance use disorder doesn't count for a patient in stable recovery, which the rule defines as 5 or more years. Your patient whose condition isn't on your state's list can still ask to be counted as medically frail, per paragraph (c)(5)(ii) of section 435.554.
(i) An individual who is medically frail or otherwise has special medical needs is defined as an individual whose physical, mental, or other behavioral health condition significantly impairs the individual's ability to comply with the community engagement requirement in this subpart and is an individual:
(A) Who is blind or disabled (as defined in section 1614 of the Social Security Act);
(B) With a substance use disorder, excluding an individual in stable recovery (which means, an individual who is in recovery for 5 or more years);
(C) With a disabling mental disorder;
(D) With a physical, intellectual, or developmental disability that significantly impairs their ability to perform one or more activities of daily living; or
(E) With a serious or complex medical condition ...
The interim final rule calls the work requirement the community engagement requirement. Your patient is medically frail only with both highlighted parts: a condition from items (A) to (E), and a significant impairment of the ability to comply.
When your state checks
Your state checks each enrolled patient at the first renewal on or after its start date, per section 435.559. Your patient then shows 1 or more months of work or another activity in section 435.552 since the last eligibility decision, as your state sets, per section 435.556. Your state can check between renewals too.
The start date is January 1, 2027, unless your state starts sooner. The Centers for Medicare and Medicaid Services can delay your state's start with a good faith effort exemption, which ends by December 31, 2028, per section 435.560.
Call your state Medicaid office. Ask for its start date, its list of medically frail conditions, and the treatment programs it counts.
Filter your Patients list in JotPsych by Payer, and each row shows your patient's date of birth or age.
Book 15 minutes- Centers for Medicare and Medicaid Services, “Medicaid Program; Community Engagement Requirement for Certain Individuals”, interim final rule, Federal Register, June 3, 2026 (CMS-2454-IFC): preamble sections I.A and II.E.7.
- 42 CFR 435.119, coverage for adults ages 19 to 64 at or below 133 percent of the federal poverty level, paragraphs (b) and (d), Electronic Code of Federal Regulations.
- 42 CFR 435.551, applicable individual, paragraphs (a) and (b).
- 42 CFR 435.552, demonstrating community engagement, paragraph (a).
- 42 CFR 435.554, specified excluded individuals, paragraphs (a) to (c).
- 42 CFR 435.556, assessing compliance with the community engagement requirement, paragraphs (a) and (d).
- 42 CFR 435.557, verifying compliance, paragraphs (a), (b), (d), and (f).
- 42 CFR 435.559, implementation timing, paragraphs (a) to (c).
- 42 CFR 435.560, good faith effort exemption, paragraphs (a) and (c).
- 42 CFR 435.561, state requirements for outreach, paragraphs (a) and (b); read October 3, 2026.
- Food and Nutrition Act of 2008, section 3(h), 7 U.S.C. 2012(h): drug addiction or alcoholic treatment and rehabilitation program.