Nebraska Medicaid Work Requirements – What it Means for Nebraska Providers and Beyond

On May 1, 2026, Nebraska became the first state in the nation to implement community engagement requirements, commonly known as “work requirements,” under the Medicaid program. Nebraska enacted these requirements as part of H.R. 1, the “One Big Beautiful Bill Act,” signed into law by President Trump on July 4, 2025. Under the new federal mandate, a portion of Medicaid expansion participants must meet certain work and activity requirements as a condition of Medicaid eligibility. These requirements apply to Medicaid expansion participants only; individuals who are between the ages of 19 and 64 who do not have a disability, are not pregnant, meet certain income limits (up to 138% of the federal poverty level), are not enrolled in Medicare, and are U.S. citizens (or otherwise meet immigration rules). While Nebraska is the first state to implement these requirements, all 42 states (plus the District of Columbia) that have adopted the Affordable Care Act Medicaid expansion must soon follow suit, implementing the same requirements by January 1, 2027. Two other states, Montana and Iowa, are beginning enforcement early as well (July 1, 2026, and December 1, 2026, respectively).

For Nebraska Medicaid expansion participants to retain Medicaid eligibility, they must spend at least 80 hours in a given calendar month doing one or a combination of the following: (1) working (including self-employment); (2) attending school or an educational program; (3) participating in a work program or apprenticeship; (4) performing community service through a qualifying program; or (5) volunteering. Participants can also meet the work requirements by earning at least $580 in a calendar month, or if their average monthly income from seasonal work over the previous six months is at least $580, regardless of hours worked. New applicants and existing participants alike must meet these work requirements.

Participants may be exempt from the work requirements under several categories. Key exemptions include, but are not limited to: being a parent or caretaker of a child 13 years of age or younger; being a caretaker of an individual with a disability; being a disabled veteran with a total disability rating; participating in a substance use disorder treatment or rehabilitation program; or being determined “medically frail.” Temporary hardships may also apply. These exemptions and hardships would allow an individual to bypass the work requirements, at least on a temporary basis.

Current Medicaid expansion participants must demonstrate that they meet the work requirements during their regular renewal cycle. Nebraska will begin checking existing enrollees’ compliance at renewals starting with eligibility periods ending July 31, 2026, with phased implementation continuing through June 2027. New applicants must show they met the requirements in the calendar month before applying or that they qualify for an exemption. In the event a participant or applicant does not meet the work requirements and cannot show an applicable exemption or hardship, the state must issue a notice of noncompliance. If the individual cannot demonstrate compliance within 30 days, the state will deny or terminate their Medicaid coverage.

These work requirements stand to have significant implications for healthcare providers in Nebraska and across the country. The Urban Institute, for example, projects that Nebraska’s Medicaid expansion enrollment could decline by 16,000 to 30,000 individuals by 2028, affecting up to nearly 42% of current Nebraska Medicaid expansion enrollees.[1] Providers that serve large Medicaid expansion populations should prepare for potential reductions in Medicaid revenue. Critically, research from earlier work requirement programs suggests that many individuals who lose coverage do so because of administrative and documentation barriers rather than actual failure to meet the requirements. Providers can play an important role by helping patients understand the requirements, identify applicable exemptions (including the medically frail exemption), and navigate the verification process.

As the first state to implement these requirements, Nebraska will serve as a barometer for the work requirements’ overall impact on the financial health of healthcare providers nationwide. Providers within Nebraska and across the country will likely closely monitor enrollment patterns and disenrollment data in the coming months as the new requirements take shape in Nebraska to better understand how the work requirements will affect their patients’ coverages.