The Centers for Medicare & Medicaid Services issued an interim final rule requiring certain Medicaid enrollees to complete 80 hours per month of work, education or community service to keep their coverage. States have not yet specified exactly how they’ll verify compliance. Still, similar work-requirement programs have historically relied on employer-provided data, suggesting HR and payroll teams should prepare for similar requests.
The rule applies to non-pregnant adults ages 19 to 64 who are not enrolled in Medicare and are eligible for or enrolled in the Medicaid adult group. States must implement the requirement by Jan. 1, 2027, though Nebraska has already moved ahead of that deadline.
For HR leaders, the rule does not create a new direct employer mandate. But it does establish a new category of third-party verification work that may land on payroll and HR service desks, particularly in industries with large hourly or part-time workforces.
States must verify compliance at application, at renewal and (at their option) more frequently between renewals. Enrollees can meet the requirement through hours worked or through earnings, specifically income equal to at least 80 times the federal minimum wage, or $580 per month in 2026. That dual standard means states may request either timesheets or pay documentation, and HR teams should expect both types of inquiries.
Read more: Compliance tech is becoming a strategic priority, as AI expands in HR
If a state cannot verify compliance, it must send a noncompliance notice and give the individual 30 calendar days to demonstrate eligibility or an exemption. Failure to respond within that window can result in Medicaid disenrollment, which is likely to put employees under time pressure to provide documentation to HR or benefits staff.
The caregiver exemption applies only to parents or caregivers of children 13 and under, or of a disabled individual. Employees with teenagers 14 and older will not qualify for that exemption and may be newly subject to the work requirement.
CMS said it is supporting states with $200 million in Government Efficiency Grants and more than $600 million in private-sector technology commitments to modernize eligibility systems. The rule is open for public comment even as implementation proceeds, meaning some operational details could still change before the Jan. 1, 2027, deadline.
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