What is the Medicaid work requirement hold harmless period?

It is an option CMS offered states on Nov. 13, 2026. A state that takes it still checks whether Medicaid adults meet the new work requirement or are excluded, but it does not deny or end coverage for failing the requirement on applications and renewals through June 30, 2027, or a shorter period the state chooses.

Does the hold harmless period delay the Jan. 1, 2027, start of Medicaid work requirements?

No. The requirement still starts Jan. 1, 2027, under the 2025 federal budget law. The option only pauses denials and disenrollments for not meeting it. States must still assess enrollees, send notices and apply all other eligibility rules, such as income and age.

Do Medicaid work requirements apply to people with intellectual and developmental disabilities?

The requirement applies only to adults in the Medicaid expansion group and similar waiver-based coverage. Many people with I/DD qualify for Medicaid another way. Adults with disabilities who are in the expansion group can be excluded as medically frail, so families should confirm the exemption is on file.

CMS SMD 26-006: states may pause work-rule cutoffs to June 30

CMS told states Nov. 13 they may hold off on Medicaid work-rule denials and cutoffs through June 30, 2027, if they tell CMS by Dec. 11. States must still check who meets the rule or is excluded, and the Jan. 1, 2027, start date does not change.

Direct Support News desk · November 13, 2026 · Updated November 14, 2026 · 4 min read

States that start Medicaid's new work requirement on Jan. 1, 2027, can spend up to six months checking enrollees without denying or ending anyone's coverage for failing it. The Centers for Medicare & Medicaid Services laid out that option in a Nov. 13 letter to state Medicaid directors, SMD 26-006, signed by Center for Medicaid and CHIP Services Director Daniel Brillman, and announced it the same day; Stateline was among the outlets that reported it that evening.

The requirement itself comes from the 2025 federal budget law (H.R. 1). It applies to certain Medicaid adults ages 19 to 64, who must show 80 hours a month of work, community service, a work program or half-time school, or meet an income threshold, unless they are excluded, according to CMS.

What the letter allows

CMS calls the option a "hold harmless" period. Under the letter:

It is optional and can be shorter. A state may suspend denials and disenrollments for people who don't show they meet the requirement, for applications received and renewals started through June 30, 2027. A state can also pick a shorter window.
States still have to run the checks. A state can use the option only if it decides, for every relevant application and renewal, whether each person meets the requirement, counts as meeting it, or is excluded. CMS says that lets states test their systems before enforcement.
Other eligibility rules still apply. The pause covers only the work requirement. People can still be denied or dropped for other reasons, such as age or household income.
States must ask. A state requests the option in its mitigation plan to CMS. States that want it from Jan. 1 are asked to notify CMS by Dec. 11, 2026. States that already filed a plan or asked for a good-faith exemption can update their requests.
No audit penalty. Decisions made during an approved hold harmless period won't be counted as errors in Medicaid's payment error (PERM) or eligibility quality control (MEQC) reviews.
Then enforcement starts. For applications and renewals after a state's period ends, the state must deny or end coverage for people found ineligible under the requirement, after following the rule's noncompliance notice steps.

A footnote says states don't have to carry out the part of CMS's rule that a federal judge vacated on Oct. 29. That ruling struck CMS's narrower test for who counts as "medically frail", one of the main exclusions.

Why CMS moved now

CMS says states told it about their timelines, system problems and readiness, and that the extra months will let them fix eligibility logic and notices before people lose coverage. Its release also urges states to verify work and exclusions automatically from data they already have before asking people for paperwork, and to send notices that say what has been verified and what is still needed.

Pressure had been building: five governors asked HHS on Oct. 1 to delay the Jan. 1 start; four states sued on Nov. 5 to keep HHS from cutting their Medicaid funds over the rules; and this week the top Democrats on the House Energy and Commerce and Senate Finance committees asked CMS Administrator Mehmet Oz to let states delay denials until their systems are tested. The Jan. 1 start date is set in the law, and the letter does not change it.

A state example: New Hampshire

New Hampshire's expansion program, Granite Advantage, is getting ready for Jan. 1, NHPR reported Nov. 13. The state's chief medical officer, Jonathan Ballard, said in a webinar that the state will use diagnosis codes on medical claims, prescriptions and equipment such as wheelchairs and respiratory devices to exempt people who meet the medically frail criteria automatically. Others can send a statement from themselves or their medical providers, and the state accepts self-attestation of frailty under penalty of perjury. People who meet the requirement by working or studying will report every six months. NHPR's report did not address the new hold harmless option.

What this means for providers and DSPs

Watch your state's Dec. 11 decision. Whether the first six months carry coverage losses now depends on each state. Ask your Medicaid agency or provider association whether it will request the option and for how long.
Checks start Jan. 1 either way. Even under the pause, enrollees will get notices and may be asked for proof. Direct support professionals and other low-wage staff covered through the Medicaid expansion should answer those notices; working 80 hours a month meets the requirement, but the state still has to confirm it.
Most people with I/DD are outside the rule, but not all. The requirement applies only to the adult expansion group and similar waiver-based coverage, per CMS's letter. Adults with disabilities who are in that group should be flagged as medically frail or otherwise excluded. Support coordinators and families can check that the exemption is on file now, while a missed notice still won't cost coverage in states that opt in.
The pause ends. In states that take it, denials can start with applications and renewals after June 30, 2027. Nebraska's experience, where advocates say most early losses came from unanswered paperwork, offers a preview of what provider agencies and their staff may see then.