The federal government has released its first round of guidance outlining how new Medicaid work requirements must be implemented nationwide. While many operational details are still being worked out, the document provides an important early look at how these changes will reshape Medicaid eligibility ahead of their required implementation on January 1, 2027.
These changes stem from federal legislation passed in 2025 that requires states to base Medicaid eligibility for many adults on demonstrating “community engagement.” In practice, this means that to enroll in and maintain Medicaid coverage, individuals must show they are working, volunteering, participating in job training, or enrolled in school for a minimum number of hours each month.
A New Condition of Eligibility
Under the federal guidance, most adults ages 19–64 enrolled through Medicaid expansion programs, including Michigan’s Healthy Michigan Plan, will be required to complete at least 80 hours per month of qualifying activity.
The policy is broader than traditional employment requirements. Individuals can meet the standard through a combination of activities, including:
- Paid employment
- Community service
- Participation in workforce development programs
- Enrollment in education or training programs
At the same time, the law explicitly excludes certain groups from the requirement. These include individuals who are pregnant, medically frail, or caring for young children, as well as those participating in substance use disorder treatment and several other populations defined in federal statute.
When and How Compliance Is Checked
One of the most important elements of the guidance is when individuals must demonstrate compliance. To qualify for Medicaid, individuals must show they met the work requirement in the month immediately prior to their application. States also have the option to require compliance for up to three prior months, though Michigan has indicated it plans to require only one.
Once enrolled, individuals will need to demonstrate compliance again during eligibility renewals. Beginning in 2027, those renewals will occur more frequently for many adults, every six months instead of once per year, meaning individuals will need to repeatedly verify both their eligibility and their work activity.
The guidance also requires states to rely on existing data whenever possible. Before asking individuals to submit documentation, states must attempt to verify compliance using information already available to them, such as wage data, education enrollment records, or participation in other public programs.
If compliance cannot be verified, individuals must be given notice and a 30-day window to demonstrate that they meet the requirement or qualify for an exemption before coverage is denied or terminated.
How Michigan Is Approaching Implementation
The Michigan Department of Health and Human Services has indicated that it will implement work requirements beginning January 1, 2027, aligning with the federal timeline.
The state has also signaled that it intends to take the least restrictive approach allowed under federal rules by requiring individuals to demonstrate compliance for only one month prior to application, rather than multiple months.
At the same time, MDHHS has acknowledged the scale of the operational changes required. Implementing the policy will involve new verification systems, updated eligibility processes, and significant increases in administrative workload for eligibility staff.
Other Changes Happening at the Same Time
Work requirements are only one part of a broader set of Medicaid eligibility changes that will take effect over the same period.
Beginning in 2027, adults enrolled through Medicaid expansion will be required to complete eligibility renewals every six months, rather than annually. This effectively doubles the number of times individuals must complete paperwork and verify their eligibility each year.
At the same time, federal policy will significantly limit retroactive Medicaid coverage, or the ability for Medicaid to cover services received before a person enrolls. Currently, eligible individuals can receive coverage for up to three months prior to application. Under the new rules, that window will shrink to:
- One month for Medicaid expansion populations
- Two months for other Medicaid groups
Additional changes will also restrict eligibility pathways for certain lawfully present non-citizens beginning in late 2026.
A Critical Interaction: Work Requirements and Retroactive Coverage
Taken individually, each of these changes is significant. Together, they introduce a new dynamic that could have far-reaching implications for patients and providers.
Because individuals must demonstrate compliance with work requirements in the month before they apply, the ability to receive retroactive Medicaid coverage will now depend not only on income eligibility, but also on prior-month activity.
This creates a scenario that does not exist today.
For example, an uninsured individual who seeks care in an emergency department may be income-eligible for Medicaid at the time of their visit. Under current policy, that individual could apply after receiving care and have Medicaid cover the cost retroactively.
Under the new rules, that same individual would need to demonstrate that they met the work requirement in the month before the visit to qualify for coverage at all. If they did not, even if they are otherwise eligible, they may be unable to enroll, and the visit cost would not be covered.
For hospitals and health systems, this represents a meaningful shift. Care that would previously have been reimbursed through retroactive eligibility may instead become uncompensated care, particularly in emergency settings where patients often present without prior engagement in eligibility systems.
Administrative Complexity and Coverage Risk
Even for individuals who do meet the requirements, maintaining coverage may become more challenging.
The combination of more frequent renewals, new verification requirements, and reduced retroactive coverage creates additional points where coverage can be lost due to administrative barriers rather than eligibility itself.
State officials have noted that many individuals who meet work requirements may still lose coverage due to documentation issues, missed deadlines, or difficulty navigating the process. Early estimates suggest that hundreds of thousands of Michiganders could be required to report work activity, with a significant number at risk of losing coverage under the new system.
For providers and communities, this could translate into increased churn in coverage, disruptions in care, and additional strain on safety-net systems.
What Comes Next
The guidance released to date is intended as a framework rather than a final rulebook. Federal regulators are required to issue additional regulations by June 2026, which are expected to provide more detailed direction on how states must implement and enforce the new requirements.
Future guidance will likely address:
- How states must design and audit verification systems
- How exemptions, particularly medical frailty, must be documented
- How appeals and fair hearings must be conducted
- What role managed care plans can play in supporting compliance
States will also be required to begin outreach to beneficiaries well in advance of implementation, with notifications expected to begin in 2026.
Looking Ahead
With implementation 8 months away, there is little time for states, providers, and community organizations to prepare. Given the scope of these changes, early planning and coordination will be critical.
For Michigan, where Medicaid covers more than 2.6 million residents and plays a central role in the healthcare system, the coming changes will affect not only eligibility processes, but how individuals access care across the state.
As additional guidance is released, the focus will increasingly shift from what the policy requires on paper to how it functions in practice and how to ensure that eligible residents are able to maintain coverage in a more complex system.
Washtenaw Care – A Local Response
In anticipation of these changes, local partners are organizing a coordinated response through Washtenaw Care, a county-wide effort to help residents maintain health coverage as eligibility rules become more complex.
Building on the Washtenaw Health Project’s role as a trusted navigator, the initiative focuses on expanding access to community-based support. Through partnerships across the county, Community Health Workers will offer insurance check-ups, enrollment assistance, and hands-on help with renewals and reporting requirements, with the goal of addressing issues before they lead to coverage loss.
Washtenaw Care also emphasizes stronger coordination across organizations, including shared outreach, consistent messaging, and training for community partners to better support residents navigating these changes. At the same time, the effort looks beyond Medicaid by strengthening access to Marketplace coverage and expanding the Washtenaw Health Plan for individuals who may no longer qualify for traditional insurance options.
Together, these strategies reflect a shift toward a more proactive, community-centered approach; one designed to reduce preventable coverage loss and ensure that residents know where to go for help and can access it when they need it.
To support this work, the Washtenaw Health Project has begun offering “Medicaid 101” trainings to help community partners understand eligibility, the application process, and the changes coming in 2027. These trainings are intended to build a shared foundation across organizations so residents receive consistent, accurate guidance. Additional sessions will be developed over the coming months, including deeper dives on specific topics like work requirements, renewals, and navigating common application challenges, as part of a broader effort to prepare the community for what’s ahead.
Want to get involved? Reach out to [email protected] to learn more about Washtenaw Care or the Medicaid 101 training series.