K. Implementation Timing

Section 1902(xx) of the Act requires States to establish a community engagement requirement for certain individuals enrolled in or applying for Medicaid. Section 1902(xx)(1) of the Act requires that beginning no later than January 1, 2027, unless granted a good faith effort exemption under section 1902(xx)(11) of the Act and § 435.560, State Medicaid agencies must require “applicable individuals,” defined in detail in section II.B. of this IFC and § 435.551, to demonstrate community engagement or be deemed to have demonstrated community engagement as a condition of eligibility. A State has the option to implement the community engagement requirement before January 1, 2027, either under the State plan or a section 1115 demonstration. These requirements apply to both individuals applying for Medicaid and individuals enrolled in Medicaid, as discussed in section II.H of this IFC. This section of the preamble discusses what is required for States to successfully implement the community engagement requirement in a timely manner, including the systems and capabilities needed to operationalize the community engagement requirement. New § 435.559 implements and interprets the implementation timing of section 1902(xx)(1) of the Act.