On June 1, 2026, CMS released an interim final rule with comment period (IFC) that implements Section 71119 of H.R. 1, which requires states to establish community engagement requirements in Medicaid for certain individuals. The rule provides definitions of important exclusions from the requirements, like family caregivers and individuals who are medically frail. Notably, CMS ties medical frailty to an individual’s ability to work or otherwise comply with community engagement requirements.

CMS also describes how states should conduct verifications at application and renewal, and what constitutes acceptable verification methods. The agency also details the limitations of managed care plans regarding community engagement requirements. Finally, CMS provides several cost estimates of implementing and operating community engagement requirements to both State and Federal governments.

In general, the rule provides many specific regulatory definitions for allowable activities and exclusion categories, limiting the ability of states to define these terms themselves. CMS estimates that community engagement requirements will result in disenrollment of 15 percent of applicable individuals due to either noncompliance or procedural disenrollment.

The rule becomes effective on July 31, 2026. CMS will accept public comments on the IFC through July 31, 2026.

Sellers Dorsey summarized the interim final rule, including key takeaways and a section-by-section breakdown.