In January 2018, the Centers for Medicare & Medicaid Services (CMS) issued guidance to states as to the circumstances under which CMS would approve Section 1115 demonstration waivers making work/community engagement (CE) requirements a condition of Medicaid eligibility. Since then, CMS has approved state work/CE waivers in Arkansas, Indiana, Kentucky and New Hampshire, and additional states have submitted or are poised to submit similar waivers.

Notably, on June 29, 2018, the U.S. District Court, District of Columbia issued a ruling in Stewart v. Azar that invalidated the Department of Health and Human Services’ approval of Kentucky’s Medicaid waiver for failing to consider the impact of work requirements on coverage, which the court determined was a key objective of the Medicaid program. While the Stewart decision does not apply beyond Kentucky, another lawsuit is currently pending in Arkansas, and states will want to consider the administrative burden they are taking on and the implications for beneficiaries before moving forward, in light of legal challenges.

Originally published for the Robert Wood Johnson Foundation on August 27, 2018.