The Centers for Medicare & Medicaid Services will issue critical implementation guidance by June 1, 2026, for mandatory Medicaid work requirements that will affect all 40 Medicaid expansion states starting January 1, 2027. U.S. News reported on April 13, 2026, that states and insurers are still awaiting the federal details needed to implement these requirements. Nebraska becomes the first state to move forward early, with implementation beginning May 1, 2026.

The federal law, HR1 (the "One Big Beautiful Bill Act"), requires Medicaid expansion enrollees ages 19-64 to document 80 hours per month of work, community service, or education. Families with disabled members face losing coverage unless they qualify for and successfully document disability exemptions.

What Changed

The 2025 federal budget reconciliation law establishes work requirements for adults enrolled in Medicaid through the Affordable Care Act expansion. Starting January 1, 2027, adults ages 19-64 in the Medicaid expansion population must complete 80 hours per month of qualifying activities or claim an exemption.

Qualifying activities include employment, job training programs, enrollment in an educational program (at least half-time), community service, or a combination of these. States may implement earlier through state plan amendments, as Nebraska has chosen to do.

The Congressional Budget Office estimates these provisions will reduce federal Medicaid spending by $326 billion over ten years and result in millions losing coverage.

Who Qualifies for Disability Exemptions

HR1 defines several disability-related exemptions that protect families from losing coverage. You may be exempt if you:

• Are medically frail: blind, disabled, or having a serious or complex medical condition
• Have an intellectual or developmental disability that significantly impairs your ability to perform one or more activities of daily living
• Have a disabling mental disorder
• Have a substance use disorder (this counts as medically frail under the law)
• Receive Supplemental Security Income (SSI)
• Receive services through Medicaid Home and Community-Based Services (HCBS) programs
• Are a caregiver of a disabled individual (states may verify this through existing HCBS payment records)

The Center for Health Care Strategies notes that states should maximize data-driven verification by linking existing Medicaid claims, managed care records, and disability services data to identify people who qualify for exemptions.

The Documentation Risk

Qualifying for an exemption doesn't guarantee you'll keep your coverage. Advocates warn that documentation burdens have caused eligible people to lose coverage in states that previously implemented work requirements under waivers.

The problem isn't eligibility. It's proof.

States will first attempt to verify exemptions using existing data: Medicaid claims, managed care records, disability program enrollment. If your exemption can't be verified through state systems, you'll be responsible for submitting documentation within 30 days of receiving a non-compliance notice.

That 30-day window is the risk. Missed mail, difficulty obtaining medical records, or confusion about what documentation is acceptable can result in coverage loss for families who qualify.

State Outreach Requirements

Federal law requires state Medicaid agencies to conduct member outreach between June 30 and August 31, 2026, through regular mail and at least one additional method: telephone, text message, website, or "other commonly available electronic means."

This outreach must inform members about the work requirements, available exemptions, and how to document their status. If you don't receive anything from your state Medicaid agency during this window, contact them directly. Missing that outreach could mean missing the information you need to protect your coverage.

What Families Can Do Now

Start building your documentation before the federal guidance arrives. Here's what to do:

• Talk to your doctor about exemption status. If you or your child has a diagnosis that qualifies as medically frail, intellectual disability, developmental disability, or disabling mental disorder, ask your doctor to document it in your medical record now. You may need a letter for state verification later.

Timeline

• May 1, 2026: Nebraska begins implementing work requirements for new applicants and members with renewals on or after this date
• June 1, 2026: Federal implementation guidance due from CMS (defines exemptions in detail, provides state instructions)
• June 30–August 31, 2026: Required state outreach period to notify members
• January 1, 2027: All 40 Medicaid expansion states must implement work requirements
• December 31, 2028: Latest extension deadline for states demonstrating good faith implementation efforts

What Happens Next

CMS guidance expected June 1 will clarify how states should define and verify disability exemptions, what documentation is acceptable, and how the 30-day compliance window will work. Until that guidance arrives, families should assume they'll need to actively prove their exemption status rather than relying on automatic verification.

The Justice in Aging advocacy organization has published tools for state advocates to push for protective implementation policies: automatic exemptions based on existing data, simplified documentation processes, and extended compliance periods for people with disabilities.

Watch for state-specific implementation details after June 1. Your state may adopt more protective policies than the federal minimum requires.

Resources:

• Center for Health Care Strategies: Summary of Federal Medicaid Work Requirements
• KFF: A Closer Look at the Work Requirement Provisions in the 2025 Federal Budget Reconciliation Law
• Colorado Medicaid Work Requirements FAQs
• Nebraska Medicaid Work Requirements