On June 3, the Centers for Medicare & Medicaid Services (CMS) published an interim final rule (IFR) implementing the community engagement requirements established in the Working Families Tax Cuts legislation (WFTCL). The WFTCL imposed an 80-hour per month community engagement requirement, beginning January 1, 2027, for individuals in the Medicaid expansion population and those receiving coverage through a waiver of the plan.
The IFR builds on the preliminary guidance CMS issued last year by providing additional detail regarding the beneficiaries subject to the requirement, the activities that qualify toward compliance, and the criteria for exceptions and exclusions. In the IFR, CMS also reiterates states’ obligations related to the verification of compliance, outreach to affected beneficiaries, noncompliance procedures, and reporting.
In a significant departure from the statute and the preliminary guidance, the IFR adds a new criterion that an individual must meet to qualify for the medical frailty exclusion. Under the WFTCL, those with specified disabilities and serious or complex medical conditions qualify as “medically frail” and are not subject to the community engagement requirement. In addition to having a disability or condition that qualifies an individual as “medically frail,” the IFR also requires that the disability or condition “significantly impairs the individual’s ability to comply with the community engagement requirement.”.
As of September 2026, two lawsuits challenging the IFR’s “significant impairment” requirement—the first filed by 25 states, including the District of Columbia, and the second filed by Medicaid beneficiaries and provider organizations, as well as the City of Columbus, Ohio—were pending in federal district courts.
If you have any questions about how this IFR and the provisions of the WFTCL may impact you, please reach out to any Eyman Partners attorney to discuss.