The Trump administration will allow states to delay enforcement of new Medicaid work requirements until July 1, according to a letter sent to state Medicaid directors.
Enforcement of the new rules was originally set to begin on January 1, following their enactment in the summer of 2025 as part of domestic policy legislation. While the requirements technically take effect on schedule, states now have the option to wait until July before ending coverage for individuals who do not comply, as reported by two senior administration officials.
Dan Brillman, who oversees Medicaid at the Centers for Medicare and Medicaid Services, acknowledged the operational hurdles states face. “We have heard directly from states about their implementation timelines, impediments to successful launches at scale,” Dan Brillman, who oversees Medicaid at the Centers for Medicare and Medicaid Services, wrote in the agency letter.
During a six-month hold harmless period running through June 30, 2027, participating states can choose not to deny coverage to out-of-compliance enrollees while testing and refining their verification processes, according to guidance issued by the agency. States must still assess whether individuals meet work rules during this window and submit requests for flexibility in mitigation plans by December 11.
The administrative pause follows a major legal setback for the federal approach. A federal judge recently struck down a key CMS regulation governing exemptions for medically vulnerable participants. U.S. District Court Judge Richard Stearns ruled that the administration exceeded its authority by requiring states to assess whether a chronic condition significantly impairs an individual’s ability to work, according to reporting from The Washington Sun.
In a lawsuit filed in June 2026, a multistate coalition led by state attorneys general challenged the interim final rule. Attorneys General Jennifer Davenport of New Jersey and Rob Bonta of California secured a decision from the U.S. District Court for the District of Massachusetts finding the implementation unlawful, vacating the language, and issuing a permanent injunction alongside a six-month stay of enforcement.
Today’s decision is a major victory that ensures that some of our most vulnerable residents are able to continue to access the healthcare they deserve.
Attorney General Bonta
The invalidated provisions sought to narrow statutory exemptions for “medically frail” individuals, which Congress created to protect people with serious or complex conditions, mental disorders, and substance abuse disorders from losing coverage.
The work mandate applies to able-bodied adults without young children on expanded Medicaid, affecting approximately 19 million people nationwide. Enrollees must prove they work, volunteer, or attend school for at least 80 hours a month to maintain coverage. Additional exemptions exist for pregnant individuals, disabled participants, full-time family caregivers, and those in substance-abuse treatment.
Supporters of the policy argue it provides an essential incentive for low-income individuals to secure employment. Conversely, critics contend the administrative burden will cause eligible people to lose insurance due to red tape. Projections from the Congressional Budget Office indicate that Medicaid enrollment will decline over the coming decade, with roughly 5 million fewer people enrolled and most of those affected becoming uninsured.
