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Page 20 – CMCS Informational Bulletin Medicaid eligibility, deny the application or terminate eligibility by the end of the month following the end of the 30-day period. States must provide outreach about the requirements to enrolled applicable individuals several months prior to December 31, 2026, or, if the state selected an earlier implementation date, several months prior to that date. The specific deadline for the required outreach will be based on the specific number of months for which a state opts to require applicants to have demonstrated community engagement before they apply for Medicaid plus three months. States are also required to provide outreach on a periodic basis thereafter. States are prohibited from using MCOs, PIHPs, or PAHPs, or other contractors with direct or indirect financial relationships to MCOs, PIHPs, or PAHPs to determine beneficiary compliance with community engagement requirements. The Secretary may exempt a state from implementing community engagement requirements if it submits an exemption request and demonstrates good faith efforts to comply. Any such exemptions will expire no later than December 31, 2028. CMS will award $200 million to states in Government Efficiency Grants for fiscal year 2026 for states to establish systems necessary to carry out the community engagement requirement and other sections of the same chapter of the WFTC legislation that relate to conducting eligibility determinations and redeterminations. States are also reminded that enhanced federal matching funds for certain eligible administrative expenditures also continue to be available.48 The community engagement requirements cannot be waived under section 1115 demonstration authority. CMS must issue an interim final rule implementing section 71119 by June 1, 2026. Additional guidance from CMS on this provision is forthcoming. Section 1902(xx) of the Act, as added by section 71119, is applicable to all states and the District of Columbia that provide coverage to “applicable individuals” as described above; it does not apply to the territories. Section 71120. Modifying Cost Sharing Requirements for Certain Expansion Individuals under the Medicaid Program Currently, states have the option to charge premiums and cost sharing for certain Medicaid enrollees and certain services. Cost sharing is generally limited to nominal amounts but may be higher for those with income above 100 percent of the federal poverty level (FPL). Aggregate out-of-pocket costs cannot exceed 5 percent of family income. Section 71120 amends section 1916 of the Act to require states to impose cost sharing on certain care, items, or services as determined by the state, provided to individuals whose family income exceeds 100 percent of the FPL and are enrolled in the Medicaid adult group under section 1902(a)(10)(A)(i)(VIII) of the Act. Additionally, these requirements apply to individuals whose 48 See 42 CFR § 433.15