House Energy and Commerce Committee Reconciliation Legislation Proposes Mandatory Work Requirements in Medicaid

Patti Boozang, Kinda Serafi, and Kaylee O’Connor, Manatt Health

Overview

On May 14, the House Energy and Commerce Committee (E&C) voted to advance its legislative proposals to meet the budget reconciliation instructions in H. Con. Res. 14 for consideration before the full House of Representatives. The committee’s proposals largely target cuts at the Medicaid expansion group created by the Affordable Care Act (ACA), including by establishing a state mandate to impose a work requirement on this population. Taken together, the E&C provisions would cut federal healthcare spending by at least $715 billion over 10 years and lead to significant coverage losses. An initial analysis from the Congressional Budget Office (CBO)^[1] estimates that at least 8.6 million individuals will lose health coverage if the E&C health provisions are enacted as proposed. This expert perspective provides an analysis of the E&C proposal to establish work requirements for Medicaid expansion and certain other low-income adults.

Beginning January 1, 2029, states would be required to condition Medicaid eligibility on compliance with work requirements for adults ages 19 through 64 enrolled through Medicaid expansion or a section 1115 demonstration providing minimum essential coverage. This would be the first work requirement in Medicaid established in statute. All prior instances of Medicaid work requirements have been authorized through demonstration projects under section 1115 of the Social Security Act, making them vulnerable to legal challenge. These prior demonstrations caused significant coverage losses among those subject to the requirement, largely due to administrative paperwork issues.^[2]

CBO preliminarily has estimated that the work requirement provisions would result in approximately 5 million adults losing Medicaid, generating some $301 billion in savings, which is the single largest source of savings identified by CBO for the package. In addition to the 40 Medicaid expansion states and Washington D.C. impacted by this proposal, states such as Georgia and Wisconsin that utilize section 1115 authority to provide Medicaid coverage to adults above mandatory eligibility levels would be required to comply with the new requirements. (Georgia is the one state implementing work requirements currently although with rules that differ from those proposed in the bill). The provision precludes the Secretary of the Department of Health and Human Services (HHS) from waiving the work requirement through section 1115 demonstration authority.

The legislation establishes a prescriptive framework for Medicaid work requirements and provides states with discretion to impose more stringent requirements beyond the federal minimum. At a minimum, states must verify compliance with the work requirement at both application and renewal—requiring individuals to demonstrate completion of 80 hours of qualifying activities in the month prior to application and again once enrolled for at least one month within every six-month period. States may choose to adopt a more stringent approach by:

• Requiring individuals to comply with work requirements for multiple months (instead of one month) within any six-month period;
• Requiring people to meet the requirements for multiple months (instead of one month) before they can enroll in Medicaid; and/or
• Imposing more frequent verifications of compliance than the minimum of once every six months at redetermination.

The legislation further stipulates that, if a person is denied or disenrolled due to work requirements, they are also ineligible for subsidized Marketplace coverage. This prohibition on Marketplace subsidies lasts as long as the individual meets Medicaid eligibility criteria other than work requirements, increasing significantly the likelihood that these individuals will be uninsured. These core requirements and flexibilities, along with an overview of what constitutes a qualifying activity, exemption criteria, and related procedural rules, are outlined below. However, many key operational details remain unclear and will likely be clarified through rulemaking that HHS is required to promulgate by July 1, 2027.^[4]

The legislation defines qualifying activities as completing at least 80 hours in a given month of: work, a work program [to help people find jobs or build job skills as defined under the Supplemental Nutrition Assistance Program (SNAP)], community service, at least half-time enrollment in an educational program (including college/university, career or technical training, or another educational program approved by the Secretary), or a combination of these activities. Alternatively, an individual could satisfy the work requirement by having an income of at least $580 per month (i.e., the federal minimum wage multiplied by 80 hours).

Exemptions

The proposal outlines several categories of individuals who must be exempted and allows states to define additional exemptions for people experiencing temporary hardships. The legislation does not specify the way in which states would identify/determine exemptions ( for example, through automated data matching, self-attestation or enrollee documentation). As such, a key outstanding question is whether and how states will operationalize the process of identifying exempt individuals including whether and to what extent manual and paperwork-based processes will be required for individuals to prove their exemption.

While some exemptions (e.g., parent of a dependent child) may be readily verified at application or by checking available data sources, identifying other exemptions—for example, individuals who have a substance-use disorder or who are disabled veterans—may pose significant challenges. To the extent states are unable to identify exemptions, individuals will likely be required to report and provide supporting documentation to the state to prove their status, increasing the risk that eligible people lose coverage due to paperwork requirements.

Required Exemptions 

States, in accordance with the Secretary’s standards, must exempt the following individuals from work requirements for a given month if, at any point during that month, they are:

• Parents, guardians, or caregivers of a dependent child or a disabled individual;
• Medically frail, including individuals who:
  • Are blind or disabled;
  • Have a substance-use disorder;
  • Have a disabling mental disorder;
  • Have a significant physical, intellectual, or developmental disability;
  • Have a serious and complex medical condition; or
  • Have another medical condition identified by the state and approved by the Secretary.
• Pregnant or receiving Medicaid postpartum coverage;
• Foster youth and former foster youth under the age of 26;
• American Indians and Alaska Natives;
• Disabled veterans;
• Incarcerated or recently released from incarceration within the past 90 days;
• Entitled to Medicare Part A or enrolled in Medicare Part B;
• Meeting Temporary Assistance for Needy Families (TANF) or SNAP work requirements;
• Participating in a drug addiction or alcohol treatment program; or
• Other individuals designated by the Secretary.

Optional Temporary Exemptions

States may exempt individuals from work requirements for a given month if, at any point during that month, they experience and request a “short-term hardship” exemption during that month, including:

• Receiving inpatient hospital care, nursing facility services, services in an intermediate care facility for individuals with intellectual disabilities, inpatient psychiatric care, or other services determined by the Secretary;
• Living in a county impacted by a federally declared emergency or disaster;
• Living in county with a high unemployment rate (at or above the lesser of 8% or 150% of the national unemployment rate, which was 4.2% as of April 2025).
• Experiencing other short-term hardships as defined by the Secretary.

Outreach

By October 1, 2028, and regularly thereafter, states must conduct enrollee outreach via mail (or e-mail if elected by the enrollee) and one other modality about the work requirement—including who is subject to or exempt from it, how to comply and what happens if they don’t, and how to report changes that could affect their exemption status.

Automating Compliance Checks

States would be required to try to verify compliance without requesting information directly from enrollees using available, reliable information (ex parte data) “where possible,” leaving substantial room for variability in implementation. In practice, even when data are available, they may be conflicting, incomplete, or outdated—including for dynamic life circumstances like changes in work hours and caregiving responsibilities. Additionally, many useful ex parte data sources that may be available in state systems, such as participation in an education/training program and SNAP/TANF case information, are not currently integrated with Medicaid eligibility systems.

When data are insufficient or unavailable, individuals will presumably be required to present information and paperwork to verify that they have completed qualifying activities. States’ past experiences with work requirements show that such manual processes to check compliance lead to increased administrative burden on state eligibility workers and enrollees and increase disenrollments of eligible people for procedural reasons. 

Timing and Frequency of Compliance Checks

To date, states other than Georgia that have implemented work requirements in Medicaid have applied them to individuals who were already determined eligible for and enrolled in the program, rather than to individuals applying for Medicaid. As noted above, the legislation would, at a minimum, mandate that states verify compliance with the work requirement at both application and renewal—requiring individuals to demonstrate completion of 80 hours of qualifying activities for at least the month prior to application and again once enrolled for at least one month between redeterminations (which, in accordance with the legislation, would shift from every 12 to every 6 months). As a consequence of this proposal, individuals who apply for Medicaid when they experience a job loss (in some cases with related loss of health insurance) may have to remain uninsured and find another job, volunteer, or participate in some other qualifying activity before obtaining health coverage through Medicaid.

States would have the option to impose more frequent verifications, requiring individuals to demonstrate compliance for more than one month before application and once enrolled, and by requiring reporting more frequently than once every six months (e.g., monthly as Arkansas and New Hampshire did under their section 1115 demonstrations).

Consequences for Failure to Establish Compliance with Work Requirements

Individuals who do not establish that they meet the work requirement would be denied enrollment into Medicaid, or, if they are already enrolled, terminated from coverage. They would also be barred from receiving subsidized Marketplace coverage, as noted above. Before denying or terminating coverage, states must provide written notice of non-compliance^[5] and allow 30 calendar days^[6] for the individual to demonstrate compliance or an exemption; for existing enrollees, states must maintain Medicaid coverage during this 30-day period. States must then follow standard Medicaid denial/termination processes, including determining whether the individual is eligible for Medicaid under any other eligibility pathway (e.g., as a person with a disability, as a pregnant woman), assessing eligibility for other insurance affordability programs, and providing a written notice with fair hearing rights. If they lose their Medicaid, individuals will need to file a new application to re-apply; this would restart the process, triggering the compliance check for at least the month prior to application.

Implementation Funding

In accordance with the legislation, HHS is directed to distribute $100 million to states for systems development for fiscal year (FY) 2026 (allocated based on the number of people in the state subject to work requirements). States are raising concerns that the $100 million in funding will be insufficient, particularly given the administrative complexity of implementing work requirements. In Arkansas, for example, administering work requirements for approximately 115,000 people was estimated to cost over $26 million. While states should also be able to receive federal Medicaid administrative matching funds for these activities, doing so would require them to contribute state funds to cover their share of the administrative costs. An additional $50 million for FY 2026 would be allocated to HHS to support federal implementation efforts.

Evaluating Outcomes

Unlike earlier work requirement efforts approved through section 1115 demonstrations, the legislation does not include any requirements for data reporting, independent evaluation, or monitoring—raising questions about how implementation, outcomes, and enrollee impacts will be tracked over time.

Next Steps

The E&C markup is one step in a lengthy process to enact these proposals. With passage out of E&C, the legislation will now go to the House Budget Committee—which, for purposes of the reconciliation proceedings, will combine the various House Committees’ legislative proposals—before going before the House Rules Committee to prepare for Floor consideration. Further amendments to the legislation are possible in Rules before consideration before the full House of Representatives. If amendments to the work requirements proposals are made, this expert perspective will be updated to reflect any revisions.

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[1] This preliminary analysis was released on May 11 by E&C Democrats based on email correspondence with CBO. In advance of the markup, on May 13, E&C released additional estimates from CBO. However, an official and comprehensive analysis from CBO of the legislation is not yet available.

[2] Karpman, M., Haley, J.M., and Kenney, G.M. How Many Expansion Adults Could Lose Medicaid Under Federal Work Requirements? RWJF, March 17, 2025.

[3] Work requirements do not apply to individuals eligible under a mandatory Medicaid eligibility group described at Section 1902(a)(10)(A)(i)(I)–(VII) of the Social Security Act.^[1] As such, we do not enumerate these individuals in the list of required exemptions below, as they are categorically excluded from work requirements by definition.

[4] Notably, the bill expressly delegates authority for the Centers for Medicare & Medicaid Services (CMS) to fill in the details , or build upon, various statutory requirements. This may reflect a desire to insulate future rulemaking from legal challenges under the Supreme Court’s decision in Loper Bright. In that decision, the Court overturned a longstanding Chevron doctrine of default deference to reasonable agency interpretations of ambiguous statutes. The Court cautioned, however, that agencies remain entitled to deference in cases where Congress expressly delegated the authority to interpret or build upon statutory language.

[5] The notice of non-compliance must explain how the individual can show that they met the work requirement (or that it does not apply to them), and how to reapply for Medicaid if their coverage is denied or terminated.

[6] 30-days begins on the date the notice is received by the individual.