---
kind: "range"
citation: "42 C.F.R. §§ 435.550–435.559"
title: "42"
from: "435.550"
to: "435.559"
count: 10
url: "https://uscodex.org/cfr/42/435.550..435.559"
---

# §435.550. Basis and scope.


[Sections 435.550 through 435.563](/cfr/42/435.550..435.563.md) implement section 1902(xx) of the Act and apply to the 50 States and the District of Columbia. These sections do not apply to the territories.


# §435.551. Applicable individual.


An applicable individual is an individual who is not a specified excluded individual as defined at [§ 435.554](/cfr/42/435.554.md) and who is—

- (a) Eligible to enroll or is enrolled under the State plan under [§ 435.119](/cfr/42/435.119.md); or
- (b) Otherwise eligible to enroll or is enrolled in a demonstration project under section 1115(a)(2) of the Act that provides coverage that meets minimum essential coverage requirements as defined under [§ 435.4](/cfr/42/435.4.md), and who is:
  - (1) At least 19 and under 65 years of age;
  - (2) Not pregnant;
  - (3) Not entitled to or enrolled for benefits under part A of title XVIII or enrolled for benefits under part B of title XVIII; and
  - (4) **Not otherwise eligible to enroll under the State plan.**

# §435.552. Demonstrating community engagement.

- (a) **General rule.** An applicable individual demonstrates community engagement for a month if the individual meets one or more of the following conditions:
  - (1) **The individual works not less than 80 hours.**
  - (2) **The individual completes not less than 80 hours of community service.**
  - (3) **The individual participates in a work program for not less than 80 hours.**
  - (4) **The individual is enrolled in an educational program at least half-time.**
  - (5) The individual engages in any combination of the activities described in [paragraphs (a)(1) through (4)](#a-1..a-4) of this section, for a total of not less than 80 hours; however, States are not permitted to combine educational program hours with another activity if the individual is enrolled in an educational program at least half-time.
  - (6) The individual has a monthly income that is not less than the applicable minimum wage requirement under section 6 of the Fair Labor Standards Act of 1938 ([29 U.S.C. 206(a)(1)(C)](/usc/29/206.md?p=a-1-C)), multiplied by 80 hours.
  - (7) The individual had an average monthly income over the preceding 6 months that is not less than the applicable minimum wage requirement under [29 U.S.C. 206(a)(1)(C)](/usc/29/206.md?p=a-1-C) multiplied by 80 hours, and is a seasonal worker, as described in section 45R(d)(5)(B) of the Internal Revenue Code of 1986 ([26 U.S.C. 45R(d)(5)(B)](/usc/26/45R.md?p=d-5-B)).
- (b) **Definitions.** For purposes of this section—

  Community service means unpaid work, completed voluntarily or because of a mandate by court order, with a structured program that is completed for the direct benefit of the community under the auspices of public or nonprofit organizations (including embedded activities of the program that allow an individual to develop skills necessary to complete community service). The public or nonprofit organizations:

- (i) Include organizations described in section 501(c)(3) of the Internal Revenue Code of 1986 ([26 U.S.C. 501(c)(3)](/usc/26/501.md?p=c-3)) and other organizations.
- (ii) Must provide oversight of the activity, which must not serve a partisan purpose, and have a process in place to track the community service completed by individuals, including the type of community service activity, dates and hours the community service is completed, and a point of contact who can confirm the hours completed.

  Educational program means a program that is one of the following:

- (i) An institution of higher education as defined in section 101 of the Higher Education Act of 1965 ([20 U.S.C. 1001](/usc/20/1001.md));
- (ii) **A program of career and technical education as defined in section 3(5) of the Carl D.** Perkins Career and Technical Education Act of 2006 ([20 U.S.C. 2302(5)](/usc/20/2302.md?p=5));
- (iii) A high school as defined in title VIII of the Elementary and Secondary Education Act ([20 U.S.C. 7801](/usc/20/7801.md) et seq.); and
- (iv) A State-approved program of study leading to a certificate of high school equivalence for an applicable individual who has not received a high school diploma.

  Work means:

- (i) Work in exchange for money;
- (ii) Work in exchange for goods or services (“in-kind” work); and
- (iii) **Unpaid work (other than community service as defined in this paragraph (b)).** Work program means a program that is one of the following:
- (i) **A program under title I of the Workforce Innovation and Opportunity Act (WIOA) (Pub.** L. 113-128) ([29 U.S.C. 3111](/usc/29/3111.md) et seq.);
- (ii) A program under section 236 of the Trade Act of 1974 ([19 U.S.C. 2296](/usc/19/2296.md));
- (iii) A program of employment and training operated or supervised by a State or political subdivision of a State that meets standards approved by the Governor of the State, including a program under subsection (d)(4) of section 6 of the Food and Nutrition Act of 2008 ([7 U.S.C. 2015(d)(4)](/usc/7/2015.md?p=d-4)), other than a supervised job search program or job search training program. However, a program under this subsection may include supervised job search or job search training as subsidiary activities as long as such activity is less than half the required hours of the program;
- (iv) A program of employment and training for veterans operated by the Department of Labor or the Department of Veterans Affairs. For the purposes of this paragraph, any employment and training program of the Department of Labor or Veterans Affairs that serves veterans must be an approved work program; and
- (v) A workforce partnership under subsection (d)(4)(N) of section 6 of the Food and Nutrition Act of 2008 ([7 U.S.C. 2015(d)(4)(N)](/usc/7/2015.md?p=d-4-N)).
- (c) **Enrollment in an educational program.** An applicable individual's enrollment status in an educational program (full-time, half-time, less than half-time) is determined by the school or institution.
  - (1) The enrollment status of the individual begins on the first day of the school term for the educational program.
  - (2) The enrollment status will continue through normal periods of attendance, vacation, and recess. During periods of vacation and recess, the enrollment status shall be based on the individual's status just prior to the school break.
  - (3) The enrollment status will end at the end of the month that the student is expelled, withdraws, completes the school term and is not registered for the next school term (excluding optional terms such as winter or summer sessions), or graduates (unless the student is enrolled in another educational program).
- (d) **Less than half-time enrollment in an educational program.** If an applicable individual is enrolled in an educational program for less than half-time as determined by the school, the educational program hours shall be the following:
  - (1) **For educational programs that use credit hours—**
    - (i) Multiply the number of each one credit hour of instruction by 3 to get the total of education hours in a week.
    - (ii) Multiply the weekly total as determined under [paragraph (d)(1)(i)](#d-1-i) of this section by 4.33 weeks to get total hours in a 1-month period.
  - (2) For educational programs that do not use credit hours, the hours spent attending class and participating in educational activities will count towards meeting this requirement.
- (e) **Combination of activities.** An applicable individual may demonstrate community engagement for a month if the individual engages in any combination of activities described in [paragraphs (a)(1) through (4)](#a-1..a-4) of this section for a total of not less than 80 hours.
  - (1) The hours for work under [paragraph (a)(1)](#a-1) of this section, community service under [paragraph (a)(2)](#a-2) of this section, and participating in a work program under [paragraph (a)(3)](#a-3) of this section, need only be combined with educational program hours if the individual is enrolled in an educational program less than half-time.
  - (2) The hours for work under [paragraph (a)(1)](#a-1) of this section, community service under [paragraph (a)(2)](#a-2) of this section, and participating in a work program under [paragraph (a)(3)](#a-3) of this section must be determined separately and based on the time spent on the specific activity in such month.
    - (i) If the monthly income is less than the applicable Federal minimum wage requirement under [29 U.S.C. 206(a)(1)(C)](/usc/29/206.md?p=a-1-C) multiplied by 80 hours, and the agency does not have documentation regarding the number of hours worked, the agency may calculate the hours for work under [paragraph (a)(1)](#a-1) of this section based on the monthly income as determined under [paragraph (f)(2)](#f-2) of this section provided that the agency must use a reasonable method to allocate work hours between members of the household.
    - (ii) If the agency uses the option under [paragraph (e)(2)(i)](#e-2-i) of this section, the agency must calculate the hours for work by dividing the monthly income as determined under [paragraph (f)(2)](#f-2) of this section by the applicable Federal minimum wage requirement under [29 U.S.C. 206(a)(1)(C)](/usc/29/206.md?p=a-1-C).
  - (3) The hours for less than half-time enrollment in an educational program must be calculated as provided in [paragraph (d)](#d) of this section.
  - (4) After the agency determines an applicable individual's hours for work, completing community service, participating in a work program, and less than half-time enrollment in an educational program, the hours must be added together. Adding the hours will provide the total hours for the combined activities.
- (f) **Monthly income.**
  - (1) An applicable individual demonstrates community engagement for a month if the individual has a monthly income that is not less than the applicable Federal minimum wage requirement under [29 U.S.C. 206(a)(1)(C)](/usc/29/206.md?p=a-1-C) multiplied by 80 hours.
  - (2) The agency must determine the monthly income based on the individual's MAGI-based income, for their MAGI-based household, as defined at [§ 435.603](/cfr/42/435.603.md), and applied to a month in the period under [§ 435.556(a)](/cfr/42/435.556.md?p=a), as applicable for demonstrating community engagement.
- (g) **Average monthly income for seasonal workers.**
  - (1) An applicable individual demonstrates community engagement for a month if the individual is a seasonal worker as described in [26 U.S.C. 45R(d)(5)(B)](/usc/26/45R.md?p=d-5-B) and had an average monthly income over the preceding six months that is not less than the applicable Federal minimum wage requirement under [29 U.S.C. 206(a)(1)(C)](/usc/29/206.md?p=a-1-C) multiplied by 80 hours.
  - (2) The agency must determine the average monthly income based on the individual's MAGI-based income, for their MAGI-based household, as defined at [§ 435.603](/cfr/42/435.603.md), and applied to a month in the period under [§ 435.556(a)](/cfr/42/435.556.md?p=a), as applicable for demonstrating community engagement.

# §435.553. Mandatory exceptions for certain applicable individuals.


A State must deem an applicable individual to have demonstrated community engagement under [§ 435.552](/cfr/42/435.552.md) for a month if—

- (a) **For part or all of that month, the individual was—**
  - (1) Under the age of 19 years;
  - (2) Entitled to or enrolled for Medicare benefits under part A or enrolled for benefits under part B of title XVIII of the Act;
  - (3) Described in any mandatory coverage groups in [subclauses (I) through (VII)](/cfr/42/1902.md?p=a-10-A-i-I..a-10-A-i-VII) of section 1902(a)(10)(A)(i) of the Act under the Medicaid State plan; or,
  - (4) A specified excluded individual as defined at [§ 435.554](/cfr/42/435.554.md).
- (b) At any point during the 3-month period ending on the first day of that month, the individual was an inmate of a public institution.

# §435.554. Specified excluded individuals.

- (a) **For purposes of this section—** Caretaker relative means a relative of a dependent child or a disabled individual, as those terms are defined in this section, by blood, adoption, or marriage with whom the child or disabled individual is living, who assumes primary responsibility for the dependent child's or disabled individual's care, and who is one of the following—
  - (i) The dependent child's or disabled individual's father, mother, grandfather, grandmother, brother, sister, stepfather, stepmother, stepbrother, stepsister, uncle, aunt, first cousin, nephew, or niece.
  - (ii) The disabled individual's husband, wife, son, daughter, stepson, stepdaughter, grandson, or granddaughter.
  - (iii) **The spouse of such parent or relative, even after the marriage is terminated by death or divorce.**
  - (iv) At State option, another relative of the dependent child or disabled individual based on blood (including those of half-blood), adoption, or marriage; the domestic partner of the parent or other caretaker relative; or an adult with whom the dependent child or disabled individual is living and who assumes the primary responsibility for the dependent child or disabled individual's care. To the extent a State has elected to include any of these relationships for the purpose of eligibility for the group at [§ 435.110](/cfr/42/435.110.md), the same elections shall apply for this definition for such State.

    Dependent child means a child 13 years of age or under who relies on another individual for care.

    Disabled individual means an individual who meets the Americans with Disabilities Act definition of disability at [28 CFR 35.108](/cfr/28/35.108.md). An individual need not be eligible for Medicaid or other Federal programs on the basis of a disability to be a disabled individual under this definition.

    Family caregiver means an adult family member or other individual who has a significant relationship with, and who provides care within a broad range of assistance to, a dependent child or a disabled individual as both terms are defined in this section.

    Guardian means an adult appointed by a court to care for and make personal decisions for a dependent child or disabled individual, as defined in this section, who cannot care for themselves, in accordance with applicable State law.

    Parent means an individual with the legal status of a mother or father, including by adoption, in accordance with applicable State law, who provides some level of care to a dependent child or disabled individual, as defined in this section.

- (b) An individual who meets the criteria for one or more of the categories described in [paragraph (c)](#c) of this section is excluded from the definition of an applicable individual as defined at [§ 435.551](/cfr/42/435.551.md). Community engagement is not a condition of eligibility for specified excluded individuals.
- (c) **An individual is a specified excluded individual if he or she meets one of the following—**
  - (1) The individual meets the definition of the eligibility group serving former foster care children, described at section 1902(a)(10)(A)(i)(IX) of the Act as amended by Public Law 115-271, regardless of whether the individual turned age 18 on or after January 1, 2023.
  - (2) The individual meets the definition of Indian at [§ 447.51](/cfr/42/447.51.md) of this subchapter.
  - (3) The individual is a parent, guardian, caretaker relative, or family caregiver, as each is defined in this section, and for family caregivers, meets one of the criteria identified at [paragraphs (c)(1)(i)(A) through (C)](#c-1-i-A..c-1-i-C) of this section. For purposes of this exclusion:
    - (i) An individual who is a family caregiver as defined in this section is a specified excluded individual if he or she meets one of the following criteria:
      - (A) The individual primarily resides with a dependent child or disabled individual, as these terms are defined in this section, for whom he or she provides assistance that occurs on a regular basis and is not solely incidental in nature.
      - (B) The individual is a relative (as specified in the “caretaker relative” definition in this section, without regard to the requirements to live with and to assume primary responsibility) of a dependent child or disabled individual, as these terms are defined in this section, for whom he or she provides assistance that occurs on a regular basis and is not solely incidental in nature, and with whom he or she does not reside.
      - (C) The individual does not reside with and is not a relative (as specified in the “caretaker relative” definition in this section, without regard to the requirements to live with and to assume primary responsibility) of a dependent child or disabled individual, as these terms are defined in this section, for whom he or she provides not less than 80 hours of assistance that is not solely incidental in nature per month.
    - (ii) In residences with more than one parent, guardian, caretaker relative, or family caregiver, multiple individuals who meet the relevant definitions at [paragraph (a)](#a) of this section may qualify as a specified excluded individual as described in this section.
  - (4) The individual is a veteran with a temporary or permanent disability from the Department of Veterans Affairs, rated as 100 percent (total) under [38 U.S.C. 1155](/usc/38/1155.md).
  - (5) **The individual is medically frail or otherwise has special medical needs.** For purposes of this exclusion:
    - (i) An individual who is medically frail or otherwise has special medical needs is defined as an individual whose physical, mental, or other behavioral health condition significantly impairs the individual's ability to comply with the community engagement requirement in this subpart and is an individual:
      - (A) Who is blind or disabled (as defined in section 1614 of the Social Security Act);
      - (B) With a substance use disorder, excluding an individual in stable recovery (which means, an individual who is in recovery for 5 or more years);
      - (C) With a disabling mental disorder;
      - (D) With a physical, intellectual, or developmental disability that significantly impairs their ability to perform one or more activities of daily living; or
      - (E) With a serious or complex medical condition which is a medical condition that is life threatening, seriously disabling without necessarily being life threatening, causing significant pain or discomfort that can cause serious interruptions to life activities, requiring a major time or effort commitment from caregivers for a substantial period of time, requiring frequent monitoring, associated with severe consequences or negative consequences for someone else, affecting multiple organ systems, requiring management to tight physiological parameters, requiring coordination of multiple specialties, requiring treatment that carries a risk of serious complications, or requiring adjustment in non-medical environments.
    - (ii) The State must develop a list of diseases, diagnoses, disorders, or other health conditions to identify individuals who meet the criteria in [paragraphs (a)(5)(i)(A) through (E)](#a-5-i-A..a-5-i-E) of this section.
      - (A) The list must be auditable, justifiable, and consistent with the definitions established in [paragraphs (a)(5)(i)(A) through (E)](#a-5-i-A..a-5-i-E) of this section.
      - (B) The State must revise this list on a regular basis to add or remove diseases, diagnoses, disorders, or health conditions based on the State's experience applying this exclusion.
      - (C) If an individual does not have a disease, diagnosis, disorder, or health condition on this list, the State must have reasonable processes and criteria in place for such individual to request consideration for the exclusion for individuals who are medically frail or otherwise have special medical needs.
  - (6) The individual is compliant with any requirements imposed by the State, in accordance with [section 407](/cfr/42/407.md) of the Act.
  - (7) The individual is a member of a household that receives Supplemental Nutrition Assistance Program (SNAP) benefits under [7 U.S.C. 2015](/usc/7/2015.md) and is not exempt from a work requirement under such Act.
  - (8) The individual is participating in a drug addiction or alcoholic treatment and rehabilitation program, as defined in [section 3(h)](/cfr/42/3.md?p=h) of the Food and Nutrition Act of 2008 ([7 U.S.C. 2012(h)](/usc/7/2012.md?p=h)). States may establish a minimum time commitment, consistent with appropriate clinical guidelines, for participation in such a program.
  - (9) The individual is an inmate of a public institution, as defined at [§ 435.1010](/cfr/42/435.1010.md).
  - (10) The individual is pregnant or entitled to postpartum medical assistance under section [1902(e)(5)](/cfr/42/1902.md?p=e-5) or [(16)](/cfr/42/1902.md?p=e-16) of the Act.

# §435.555. Optional exception for short-term hardship events.

- (a) **Scope.** At State option, the agency may provide that an applicable individual, as defined at [§ 435.551](/cfr/42/435.551.md), is deemed to have demonstrated community engagement, as defined at [§ 435.552](/cfr/42/435.552.md), for a month in which, for all or part of such month, the individual experiences any one of the short-term hardship events described in [paragraph (d)](#d) of this section.
- (b) **Definitions.** For purposes of this section—
  - (1) Dependent means an individual who is:
    - (i) The minor (as defined under State law) child of an applicable individual who is living with the applicable individual;
    - (ii) The tax dependent of an applicable individual (whether or not the tax dependent is a minor child of the applicable individual or residing with the applicable individual); or
    - (iii) **An individual for whom the applicable individual has been appointed a guardian by a court.**
  - (2) Individual acting on behalf of the applicable individual means any individual from whom a State is required to accept an application under [§ 435.907(a)](/cfr/42/435.907.md?p=a).
- (c) **Procedures.** If the agency elects the option described in [paragraph (a)](#a) of this section, it must provide, including as part of the noncompliance procedures at [§ 435.558(c)(1)](/cfr/42/435.558.md?p=c-1):
  - (1) Notice, as described under [§ 435.561(b)(3)(ii)](/cfr/42/435.561.md?p=b-3-ii), informing applicable individuals that the State offers a short-term hardship exception from the community engagement requirement, and, for the circumstances in paragraphs [(d)(2)](#d-2) and [(3)](#d-3) of this section, the anticipated end date of the exception;
  - (2) For the circumstances in paragraphs [(d)(1)](#d-1) and [(4)](#d-4) of this section, the State must also provide:
    - (i) Notice of the method by which an applicable individual or an individual acting on behalf of the applicable individual may request a short-term hardship exception;
    - (ii) Notice of the timeframe for requesting a short-term hardship exception;
    - (iii) A timely process for determining whether a request for a short-term hardship exception will be granted;
    - (iv) Notice to the applicable individual of the State's determination, which shall include the anticipated end date of the exception (if granted); and
    - (v) A process under which the applicable individual or an individual acting on behalf of the applicable individual can appeal an adverse determination.
- (d) **Short-term hardship event.** A short-term hardship event exists when, for all or part of a month, and subject to a request in the circumstances described in paragraphs [(d)(1)](#d-1) and [(4)](#d-4) of this section by an applicable individual or an individual acting on behalf of the applicable individual, the criteria for any of the following circumstances are met:
  - (1) **The applicable individual receives—**
    - (i) Inpatient hospital services as defined at [§ 440.10](/cfr/42/440.10.md) of this subchapter, nursing facility services as defined at [§ 440.155](/cfr/42/440.155.md) of this subchapter, services in an intermediate care facility for individuals with intellectual disabilities as defined at [§ 440.150](/cfr/42/440.150.md) of this subchapter, or inpatient psychiatric hospital services including the services defined at [§ 440.160](/cfr/42/440.160.md) of this subchapter for individuals under the age of 21 without regard to whether such services are in an institution for mental diseases; or
    - (ii) **Other services of similar acuity, including—**
      - (A) Inpatient services furnished in a critical access hospital consistent with [§ 440.170(g)](/cfr/42/440.170.md?p=g) of this subchapter;
      - (B) Inpatient services furnished in an emergency hospital consistent with [§ 440.170(e)](/cfr/42/440.170.md?p=e) of this subchapter;
      - (C) Inpatient services furnished in an institution for mental diseases;
      - (D) Inpatient services furnished by other facilities that are not covered under Medicaid but are otherwise recognized by the State; and,
      - (E) Noninstitutional services that an applicable individual receives that, but for the receipt of such services, would likely result in the applicable individual receiving services specified in paragraphs [(d)(1)(i)](#d-1-i) and [(d)(1)(ii)(A) through (D)](#d-1-ii-A..d-1-ii-D) of this section, regardless of whether they are received in an institutional setting.
    - (iii) States must use the definition of “inpatient” at [§ 440.2](/cfr/42/440.2.md) of this subchapter for any inpatient services described in paragraphs [(d)(1)(i)](#d-1-i) and [(ii)](#d-1-ii) of this section.
  - (2) The applicable individual resides in a county or equivalent unit of local government in which there exists an emergency or disaster declared by the President pursuant to the National Emergencies Act ([50 U.S.C. 1601](/usc/50/1601.md) et seq.) or the Robert T. Stafford Disaster and Emergency Assistance Act ([42 U.S.C. 5121](/usc/42/5121.md) et seq.).
    - (i) A short-term hardship exception based on an emergency declared pursuant to the National Emergencies Act ([50 U.S.C. 1601](/usc/50/1601.md) et seq.) exists when the emergency affects the ability of applicable individuals to demonstrate community engagement in a particular county or other equivalent unit of local government, or multiple counties, or statewide.
    - (ii) A State must timely notify CMS of its plan to effectuate a short-term hardship exception based on an emergency declared pursuant to the National Emergencies Act.
    - (iii) CMS will review States' use and implementation of a short-term hardship exception based on an emergency declared pursuant to the National Emergencies Act to ensure compliance with [paragraph (d)(2)(i)](#d-2-i) of this section.
    - (iv) The duration of an exception for an emergency or disaster declared by the President pursuant to the Robert T. Stafford Disaster and Emergency Assistance Act ([42 U.S.C. 5121](/usc/42/5121.md) et seq.) will be the first month in which the incident period begins and through at least the end of the month in which the incident period ends, and may extend beyond such month if approved by CMS upon request of the State, based on information the State provides in support of an extended period. The State must base its request for a longer duration on information showing that barriers to demonstrating the community engagement requirement under [§ 435.552](/cfr/42/435.552.md) in the relevant area persist.
  - (3) Through a request from the State to CMS made in an electronic or hard-copy format, the State demonstrates and CMS determines, based on data from the U.S. Bureau of Labor Statistics or another reliable source such as a State labor department, that the applicable individual resides in a county or equivalent unit of local government in which the unemployment rate is at or above the lesser of—
    - (i) 8 percent; or
    - (ii) 1.5 times the national unemployment rate.
  - (4) The applicable individual, or the dependent of such individual, must travel outside of their community of residence for an extended period of time (which could be for part or all of a month or longer) to receive medical services necessary to treat a serious or complex medical condition, as defined at [§ 435.554(c)(5)(i)(E)](/cfr/42/435.554.md?p=c-5-i-E), that are not available within their community of residence.
    - (i) If the applicable individual does not travel with the dependent, then, during the month or months in which the dependent must travel, the applicable individual must demonstrate having taken leave from employment or having absented themselves from other community engagement activities for reasons related to the dependent's condition or travel, such as, but not limited to:
      - (A) Taking the dependent to local medical appointments related to or in preparation for the medical appointment that requires the travel;
      - (B) Conducting logistical activities relating to the travel;
      - (C) **Maintaining primary responsibility for communicating with the dependent's medical providers.**
    - (ii) [Reserved]
- (e) **Request from applicable individual not required.** A State must not require an applicable individual, or an individual acting on behalf of the applicable individual, to make a request for the circumstances described in paragraphs [(d)(2)](#d-2) and [(3)](#d-3) of this section.
- (f) **Excluded individuals.** A State must not apply [paragraph (a)](#a) of this section to a specified excluded individual defined at [§ 435.554](/cfr/42/435.554.md).

# §435.556. Assessing compliance with the community engagement requirement.

- (a) A State must require applicable individuals, as defined at [§ 435.551](/cfr/42/435.551.md), to demonstrate community engagement under [§ 435.552](/cfr/42/435.552.md), or be deemed to demonstrate community engagement under [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md), as a condition of eligibility for medical assistance. The State must require—
  - (1) For an applicable individual who files an application for medical assistance under a State plan, or a waiver of such plan, demonstration of community engagement for at least one, but not more than 3 consecutive months, as specified in the State plan, immediately preceding the month of application.
  - (2) For an applicable individual who is enrolled and receiving medical assistance under a State plan, or waiver of such plan, demonstration of community engagement for 1 or more months, as specified in the State plan and subject to [paragraph (b)](#b) of this section, whether or not consecutive—
    - (i) During the period between the effective date of such individual's most recent determination or redetermination at renewal, as applicable, and the date the individual's renewal is due, consistent with section 1902(e)(14)(L) of the Act and [§ 435.916](/cfr/42/435.916.md), as applicable, if the State has not opted to conduct more frequent verifications of community engagement compliance under [§ 435.557(d)](/cfr/42/435.557.md?p=d);
    - (ii) During the period between the most recent demonstration of community engagement and the date the individual's next demonstration of community engagement is due, consistent with [§ 435.557(d)](/cfr/42/435.557.md?p=d), if the State has opted to conduct more frequent verifications of community engagement compliance as provided in [§ 435.557(d)](/cfr/42/435.557.md?p=d); or
    - (iii) During the period between the effective date of such individual's most recent determination or redetermination at renewal, as applicable, and the end of the month prior to the month in which the individual becomes an applicable individual as a result of a redetermination based on a change in circumstances in accordance with [§ 435.916(d)](/cfr/42/435.916.md?p=d).
- (b) A State must not require an applicable individual to demonstrate community engagement for a period that exceeds the period specified in paragraph [(a)(2)(i)](#a-2-i), [(ii)](#a-2-ii), or [(iii)](#a-2-iii) of this section, as applicable.
- (c) A State may not apply the requirements in [paragraph (a)](#a) of this section to a specified excluded individual defined at [§ 435.554](/cfr/42/435.554.md).
- (d) A State must inform applicants and beneficiaries of the State's eligibility determination consistent with §§ [435.917](/cfr/42/435.917.md) and [435.918](/cfr/42/435.918.md) and [part 431](/cfr/42/part431.md), [subpart E](/cfr/42/subpartE.md) of this subchapter, which includes a clear statement of the basis of eligibility consistent with [§ 435.917(b)(1)(i)](/cfr/42/435.917.md?p=b-1-i), or a statement of the State's intended action and the specific reasons for the action consistent with § [431.210(a)](/cfr/42/431.210.md?p=a) and [(b)](/cfr/42/431.210.md?p=b) of this subchapter, as applicable, which must specify whether the individual:
  - (1) Meets the criteria as a specified excluded individual as defined in [§ 435.554](/cfr/42/435.554.md); or
  - (2) Is determined to be an applicable individual as defined at [§ 435.551](/cfr/42/435.551.md), and whether the individual demonstrates community engagement under [§ 435.552](/cfr/42/435.552.md) or is deemed to have demonstrated community engagement under [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md), for the month(s) specified in accordance with [paragraph (a)](#a) of this section.

# §435.557. Verifying compliance with or exception or exclusion from the community engagement requirement.

- (a) **Definitions.** For purposes of this section—

  Period of enrollment means a continuous period of enrollment in coverage under the State plan or waiver without the individual being disenrolled, regardless of the number of consecutive eligibility periods, of redeterminations or renewals, or of transitions between eligibility groups.

  Reliable information available to the State means, for purposes of verifying compliance, deemed compliance or exclusion from the community engagement requirement in accordance with [§§ 435.550 through 435.563](/cfr/42/435.550..435.563.md), information necessary for determining eligibility to which the agency has access or should have access including, but not limited to:

  - (i) Information from electronic data sources that the agency has determined to be effective consistent with [paragraph (b)(1)(ii)](#b-1-ii) of this section, as documented in the agency's verification plan in accordance with [paragraph (b)(1)(iii)](#b-1-iii) of this section;
  - (ii) Information from other State or local agencies;
  - (iii) Information related to community engagement from Federal agencies and other data sources provided through the electronic service established by the Secretary, in accordance with [§ 435.949](/cfr/42/435.949.md);
  - (iv) Information in the State's eligibility system;
  - (v) Information in the individual's case record;
  - (vi) Payroll data;
  - (vii) Claim(s) relevant to the individual that have been adjudicated in the preceding 12 months, including those that have been paid, pended or denied; and
  - (viii) **Encounter data, as relevant to the individual, for the preceding 12 months.**
- (b) **Requirement to verify eligibility.** The agency must establish processes to use reliable information available to the State to verify that an applicable individual has demonstrated community engagement in accordance with §§ [435.552](/cfr/42/435.552.md) and [435.556](/cfr/42/435.556.md), or was deemed to have demonstrated community engagement under [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md), or that an individual is a specified excluded individual under [§ 435.554](/cfr/42/435.554.md), before requesting additional information from the individual.
  - (1) **The agency—**
    - (i) Must identify data sources that provide reliable information relevant to verifying that that an applicable individual demonstrated or is deemed to have demonstrated community engagement or that an individual is a specified excluded individual.
    - (ii) May determine that establishing a connection to or process to obtain information from a data source would not be effective, but the agency must consider such factors as the administrative costs associated with establishing and using the data match compared with the administrative costs associated with relying on documentation and the impact on program integrity in terms of the potential for ineligible individuals to be enrolled and for eligible individuals to be denied coverage.
    - (iii) Must document in its verification plan under [§ 435.945(j)](/cfr/42/435.945.md?p=j) its policies and procedures for verifying compliance with the community engagement requirement under this subpart, including an identification of the electronic data sources that the agency uses consistent with [paragraph (b)(1)(i)](#b-1-i) of this section.
    - (iv) Must request and use information from the data sources identified and documented in its verification plan consistent with paragraphs [(b)(1)(i)](#b-1-i) and [(iii)](#b-1-iii) of this section.
  - (2) Except with respect to verifying an individual is a specified excluded individual on the basis of being medically frail or otherwise having special medical needs as defined at [§ 435.554(c)(5)](/cfr/42/435.554.md?p=c-5), subject to [paragraph (g)(1)](#g-1) of this section, when there is no reliable information available to the State or the reliable information available to the State is not reasonably compatible with the information provided by or on behalf of the individual, the agency must seek additional information from the individual to verify the individual has demonstrated or is deemed to have demonstrated community engagement or that the individual is a specified excluded individual, in accordance with the following rules:
    - (i) Before January 1, 2028, the agency may require documentation or accept other information as provided in [§ 435.952(c)](/cfr/42/435.952.md?p=c) when there is no reliable information available to the State or the reliable information is not reasonably compatible with the information provided by or on behalf of the individual.
    - (ii) Beginning on January 1, 2028, when there is no reliable information available to the State or the reliable information is not reasonably compatible with the information provided by or on behalf of the individual, the agency must require documentation whenever documentation is reasonably available.
    - (iii) **The agency must—**
      - (A) Accept information other than documentation to verify an individual's eligibility when there is no reasonably available documentation; and
      - (B) May not deny or terminate eligibility solely because the individual is unable to produce documentation where none exists or is reasonably available but may establish criteria for requiring the individual to provide specific information considered sufficient to verify the individual's eligibility in the absence of reasonably available documentation.
  - (3) The agency must comply with the requirements at §§ [435.558](/cfr/42/435.558.md) and [435.952(d)](/cfr/42/435.952.md?p=d) and provide individuals with the opportunity to furnish information and documentation required to verify that the individual has demonstrated community engagement or is deemed to have demonstrated community engagement in accordance with §§ [435.552](/cfr/42/435.552.md) and [435.556](/cfr/42/435.556.md), or [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md), or is a specified excluded individual as defined at [§ 435.554](/cfr/42/435.554.md), before terminating or denying eligibility based on reliable information available to the State.
  - (4) The agency must accept information and documentation related to the community engagement requirement under this subpart from the individuals and via the modalities specified at [§ 435.907(a)](/cfr/42/435.907.md?p=a).
- (c) **Verification at application and renewal.** The State must verify that an applicable individual has demonstrated or is deemed to have demonstrated community engagement for the period specified at [§ 435.556](/cfr/42/435.556.md).
  - (1) **Requirement to check all reliable information available to the State.** The State may not limit the reliable information available to the State that is checked to specific activities or other means of demonstrating community engagement under [§ 435.552](/cfr/42/435.552.md), or to specific means of being deemed to have demonstrated community engagement under [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md), or to specific specified excluded individual statuses under [§ 435.554](/cfr/42/435.554.md), but must continue to check reliable information available to the State until the agency verifies whether an individual who appears to be an applicable individual has demonstrated community engagement, is deemed to have demonstrated community engagement, or is not an applicable individual because they are a specified excluded individual.
    - (i) The agency must attempt to verify the individual's specified excluded individual status or that the individual demonstrated community engagement or was deemed to have demonstrated community engagement using all reliable information available to the State for all relevant months before requesting additional information from the individual.
      - (A) Only after checking all reliable information available to the State without successfully verifying compliance, deemed compliance, or specified excluded individual status may the agency request additional information from the individual and initiate the noncompliance procedures under [§ 435.558](/cfr/42/435.558.md), as appropriate.
      - (B) An individual must not be required to provide documentation or other additional information unless information needed by the agency could not be verified using reliable information available to the State, including when there is no reliable information available to the State or the reliable information is not reasonably compatible with the information provided by or on behalf of the individual.
    - (ii) The agency is not required to continue checking reliable information available to the State after the agency verifies compliance, deemed compliance, or status as a specified excluded individual, unless the agency has information indicating an individual whom the agency verified demonstrated or is deemed to have demonstrated community engagement may qualify as a specified excluded individual, as described in [paragraph (c)(2)](#c-2) of this section.
  - (2) **Requirement to apply exclusions.** The agency must determine that an individual is a specified excluded individual whenever the agency has sufficient information to determine the individual qualifies as such, regardless of whether the individual also demonstrates community engagement in accordance with §§ [435.552](/cfr/42/435.552.md) and [435.556](/cfr/42/435.556.md) or meets the criteria for an exception under [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md).
  - (3) **Requirement to enroll eligible individuals and verify potential exclusion post-enrollment.** If the agency has sufficient information to verify an individual meets or is deemed to meet the community engagement requirement and has information that suggests, but needs more information to verify that the individual is a specified excluded individual, the agency must enroll the individual promptly using the verified information and attempt to verify eligibility for the exclusion post-enrollment or, if the individual is already enrolled, following the redetermination of eligibility.
- (d) **State option to conduct more frequent verifications.** States may verify that an applicable individual has met the requirement to demonstrate community engagement more frequently than each regularly scheduled redetermination, consistent with [§ 435.556(a)(2)(ii)](/cfr/42/435.556.md?p=a-2-ii).
  - (1) States electing to verify that an applicable individual has met the requirement to demonstrate community engagement between regularly scheduled redeterminations must comply with the requirements of this subpart to verify, consistent with this section, that an applicable individual met the requirement to demonstrate community engagement in accordance with §§ [435.552](/cfr/42/435.552.md) and [435.556](/cfr/42/435.556.md) or was deemed to have demonstrated community engagement under [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md).
  - (2) For beneficiaries who were determined to be applicable individuals at their last determination or redetermination of eligibility, the agency must check all reliable information available to the State to determine if the individual newly qualifies as a specified excluded individual prior to assessing compliance or deemed compliance with the community engagement requirement each time the state conducts a more frequent verification.
  - (3) If the individual continues to be an applicable individual, the agency must attempt to verify that the individual demonstrated community engagement in accordance with §§ [435.552](/cfr/42/435.552.md) and [435.556](/cfr/42/435.556.md), or was deemed to have demonstrated community engagement, under [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md), using all reliable information available to the State for all relevant months, before requesting additional information and documentation from the individual consistent with this section and initiating the noncompliance procedures under [§ 435.558](/cfr/42/435.558.md).
  - (4) The agency may not reverify the specified excluded status of an individual between regularly scheduled redeterminations if the individual was determined to be a specified excluded individual at their last determination or redetermination of eligibility or during a more frequent verification of community engagement under this section unless the agency has information indicating the individual's specified excluded individual status has changed.
- (e) **Requirement to use the electronic service established by the Secretary.** The agency must obtain information regarding compliance with or exception or exclusion from the community engagement requirement through the electronic data service established by the Secretary to the extent the information is available through such service, consistent with §§ [435.945](/cfr/42/435.945.md) and [435.949](/cfr/42/435.949.md), except as provided for in [§ 435.945(k)](/cfr/42/435.945.md?p=k) and [paragraph (e)(2)](#e-2) of this section.
  - (1) If information from a new data source becomes available through the electronic data service established by the Secretary that contains reliable information relevant to verifying the community engagement requirement in this subpart, the State must establish a connection though such service, or establish a direct connection to or implement an alternative data source or mechanism if approved for flexibility under [§ 435.945(k)](/cfr/42/435.945.md?p=k), to obtain such information from that data source as soon as practicable, but no later than 12 months after information from the data source first becomes available through the service established by the Secretary.
  - (2) For the purposes of verifying compliance or deemed compliance with, or exclusion from, the community engagement requirement, the Secretary may determine a waiver as described in [§ 435.945(k)](/cfr/42/435.945.md?p=k) is not required for the State to establish a direct connection or use an alternative mechanism to access information available from a Federal data source that is accessible through the service established by the Secretary, if the Secretary determines that such direct connection or alternative mechanism is likely to satisfy the criteria in [§ 435.945(k)](/cfr/42/435.945.md?p=k). In the event the State does not access the Federal data source through the service established by the Secretary and the Secretary determines that a waiver as described in [§ 435.945(k)](/cfr/42/435.945.md?p=k) is not necessary, the State must establish a direct connection or alternative mechanism within the timeframe specified in [paragraph (e)(1)](#e-1) of this section.
- (f) **Verification of medical frailty and privacy requirements for certain populations.**
  - (1) The agency must attempt to verify that an individual is a specified excluded individual on the basis that the individual is medically frail or otherwise has special medical needs as defined at [§ 435.554(c)(5)](/cfr/42/435.554.md?p=c-5) using reliable information available to the State, including claim(s) relevant to the individual that have been adjudicated in the preceding 12 months, including those that have been paid, pended or denied, and encounter data, as relevant to the individual.
    - (i) Before January 1, 2028, when there is no reliable information available to the State or the reliable information is not reasonably compatible with the information provided by or on behalf of the individual, the agency may require documentation or accept a statement or other information under penalty of perjury that provides sufficient information, as determined by the State, to verify an applicant or beneficiary is medically frail or otherwise has special medical needs, each time the State verifies an individual's medical frailty.
    - (ii) Beginning on January 1, 2028, the agency may accept a statement or other information provided under penalty of perjury that provides sufficient information, as determined by the State, to verify qualification for the exclusion only once during the beneficiary's period of enrollment defined at [paragraph (a)](#a) of this section when there is no reliable information available to the State or the reliable information available to the State is not reasonably compatible with the information provided by or on behalf of the individual.
      - (A) At the individual's first regularly scheduled redetermination after such status was determined using the individual's statement provided under penalty of perjury or other information as described in this [paragraph (f)(1)(ii)](#f-1-ii), the agency must verify that the individual is medically frail or otherwise has special medical needs using reliable information available to the State, or, if reliable information available to the State is not sufficient for verification, using documentation submitted by or on behalf of the individual.
      - (B) If an enrollee declares specified excluded individual status on the basis of being medically frail or otherwise having special medical needs after having sought such status on or after January 1, 2028, on the basis of a statement provided under penalty of perjury or other information described in this [paragraph (f)(1)(ii)](#f-1-ii) during the same period of enrollment defined at [paragraph (a)](#a) of this section, the agency must verify that status using reliable information available to the State, or, if reliable information available to the State is not sufficient for verification, using documentation submitted by or on behalf of the individual.
    - (iii) After verifying an individual's specified excluded individual status on the basis of being medically frail or otherwise having special medical needs using reliable information available to the State or documentation submitted by or on behalf of the individual, the agency must reverify this status at least every 12 months.
  - (2) The agency must comply with all applicable Federal privacy requirements including section 1902(a)(7) of the Act; [part 431](/cfr/42/part431.md), [subpart F](/cfr/42/subpartF.md) of this subchapter; the Health Insurance Portability and Accountability Act of 1996 ([42 U.S.C. 1320d](/usc/42/1320d.md) et seq.); [part 2 of this title](/cfr/42/part2.md); and any other applicable Federal privacy laws when accessing, storing, and handling data obtained to verify that an individual is medically frail or otherwise has special medical needs or is participating in a drug addiction or alcoholic treatment and rehabilitation program.
- (g) **Verification of mandatory and optional exceptions.**
  - (1) States must comply with the requirements in [paragraph (b)(2)](#b-2) of this section when verifying qualification for a mandatory exception under [§ 435.553](/cfr/42/435.553.md) except that if the individual provided information on an application, renewal or other State form, or when reporting a change in circumstances in accordance with [paragraph (b)(4)](#b-4) of this section indicating they qualify for an exception and there is no reliable information available to the State, the State may elect the option under section 1902(xx)(3)(A) of the Act not to seek further information from the applicable individual.
  - (2) States that elect to provide an optional exception for short-term hardships under [§ 435.555](/cfr/42/435.555.md) must—
    - (i) Attempt to use reliable information available to the State before seeking additional information from the individual to verify whether, for part or all of a month for which an applicable individual is required to demonstrate community engagement, the applicable individual received care specified at [§ 435.555(d)(1)](/cfr/42/435.555.md?p=d-1) or the applicable individual or their dependent had to travel outside of their community of residence for an extended period of time to receive medical services specified at [§ 435.555(d)(4)](/cfr/42/435.555.md?p=d-4).
    - (ii) Apply an automatic short-term hardship exception to applicable individuals if, for part or all of a month for which such applicable individuals are required to demonstrate community engagement, the individuals reside in a county or equivalent unit of local government in which there exists an emergency or disaster as specified at [§ 435.555(d)(2)](/cfr/42/435.555.md?p=d-2) or for which the Secretary has approved an unemployment-based short-term hardship exception as specified at [§ 435.555(d)(3)](/cfr/42/435.555.md?p=d-3), without requesting any additional information from such applicable individuals.

# §435.558. Noncompliance procedures.

- (a) **Provision of notice of noncompliance.** If a State is unable to verify that an applicable individual has met the requirement to demonstrate community engagement under §§ [435.552](/cfr/42/435.552.md) and [435.556](/cfr/42/435.556.md), or is deemed compliant under [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md), as specified in [paragraph (b)](#b) of this section, the State must:
  - (1) Provide such individual with the notice of noncompliance described in [paragraph (c)](#c) of this section;
  - (2) Provide such individual with a period of 30 calendar days beginning on the date on which such notice of noncompliance is received by the individual consistent with [paragraph (c)(4)](#c-4) of this section, to make a satisfactory showing to the agency—
    - (i) Of compliance with such requirement (including, as applicable, by showing that such individual demonstrated or should be deemed to have demonstrated community engagement under [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md), for each month required under the State plan); or
    - (ii) That such requirement does not apply to such individual on the basis that such individual does not meet the definition of applicable individual under [§ 435.551](/cfr/42/435.551.md), including by meeting the criteria for one or more of the categories of a specified excluded individual as defined at [§ 435.554](/cfr/42/435.554.md).
  - (3) Continue to furnish Medicaid for an enrolled beneficiary until the individual is determined ineligible consistent with [§ 435.930(b)](/cfr/42/435.930.md?p=b).
- (b) **Defining “unable to verify” community engagement.** The agency is considered to be unable to verify that an applicable individual is compliant with the requirement to demonstrate community engagement as follows:
  - (1) At application, the agency is unable to verify compliance with community engagement when it does not have sufficient information after reviewing the information provided by the individual at application and the reliable information available to the State to determine that the individual has demonstrated or is deemed to have demonstrated community engagement for the number of months required under the State plan.
  - (2) As part of a renewal under section 1902(e)(14)(L) of the Act and [§ 435.916](/cfr/42/435.916.md), the agency is unable to verify compliance with community engagement when it does not have sufficient information to determine that the individual has demonstrated or is deemed to have demonstrated community engagement for the number of months required under the State plan, after—
    - (i) Reliable information available to the State accessed at renewal consistent with [§ 435.916(a)(2)](/cfr/42/435.916.md?p=a-2) are not sufficient to verify compliance with the community engagement requirement; or
    - (ii) The renewal form provided to the beneficiary in accordance with [§ 435.916(a)(3)](/cfr/42/435.916.md?p=a-3) for those whose eligibility cannot be renewed based on reliable information under [§ 435.916(a)(2)](/cfr/42/435.916.md?p=a-2) is not returned or the information returned on the renewal form is not sufficient to verify compliance with community engagement.
  - (3) If applicable, as part of the more frequent verification of compliance under [§ 435.557(d)](/cfr/42/435.557.md?p=d), the agency is unable to verify compliance with the community engagement requirement when it does not have sufficient information to determine that the individual has demonstrated or is deemed to have demonstrated community engagement for the number of months required under the State plan after—
    - (i) Accessing reliable information in accordance with [§ 435.557(d)](/cfr/42/435.557.md?p=d) and information is not sufficient; or
    - (ii) Accessing reliable information in accordance with [§ 435.557(d)](/cfr/42/435.557.md?p=d) and following the State's procedures under [§ 435.952(d)](/cfr/42/435.952.md?p=d) to request information from the individual, when the requested information is not returned or the information returned is not sufficient.
- (c) **Content and form of noncompliance notice.** A notice of noncompliance—
  - (1) **Must include clear statements containing the following information—**
    - (i) **How to make a satisfactory showing of compliance with the community engagement requirement, including—**
      - (A) Which month(s) will be assessed by the State in accordance with [§ 435.556(a)](/cfr/42/435.556.md?p=a);
      - (B) How to show the individual demonstrated community engagement under [§ 435.552](/cfr/42/435.552.md); and
      - (C) How to show the individual should be deemed to have demonstrated community engagement as specified at [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md);
    - (ii) How to make a satisfactory showing that the community engagement requirement does not apply to the individual on the basis that the individual does not meet the definition of an applicable individual at [§ 435.551](/cfr/42/435.551.md), including because the individual meets the criteria for one or more of the categories of a specified excluded individual under [§ 435.554](/cfr/42/435.554.md);
    - (iii) The deadline for providing the information under paragraph [(c)(1)(i)](#c-1-i) or [(ii)](#c-1-ii) of this section to the State;
    - (iv) A description of how the information under paragraph [(c)(1)(i)](#c-1-i) or [(ii)](#c-1-ii) of this section may be submitted to the State through any of the modalities described in [§ 435.907(a)](/cfr/42/435.907.md?p=a);
    - (v) A description of the consequences of noncompliance with the community engagement requirement and failure to respond to the notice of noncompliance for Medicaid eligibility and eligibility for advance payments of the premium tax credit (APTC) and the premium tax credit (PTC) used to pay for coverage through a Health Insurance Exchange;
    - (vi) How such individual may reapply for medical assistance under the State plan (or a waiver of such plan) if the individual's application is denied or the individual is disenrolled from coverage under the State plan or waiver, as applicable; and
    - (vii) For States that have elected to provide the short-term hardship exception under [§ 435.555](/cfr/42/435.555.md), the information about short-term hardship events described in [§ 435.555(c)](/cfr/42/435.555.md?p=c).
  - (2) Must be provided in a manner consistent with [§ 435.905(b)](/cfr/42/435.905.md?p=b).
  - (3) Must, if provided in electronic format, comply with [§ 435.918(b)](/cfr/42/435.918.md?p=b).
  - (4) Is considered to be received 5 days after the date on the notice, unless the applicant or beneficiary shows that he or she did not receive the notice within the 5-day period.
- (d) **State responsibilities in the event of no satisfactory showing.** If no satisfactory showing is made after the 30-calendar day period consistent with [paragraph (a)(2)](#a-2) of this section, the State must—
  - (1) Consider all other bases of eligibility for medical assistance under the State plan (or waiver of such plan) in accordance with §§ [435.911](/cfr/42/435.911.md) and [435.916(f)](/cfr/42/435.916.md?p=f) prior to denying coverage at application or determining that an individual is ineligible;
  - (2) For individuals determined ineligible under the State plan (or waiver of such plan) after considering all bases of eligibility, as applicable:
    - (i) Deny such individual's application and provide written notice and fair hearing rights consistent with §§ [435.917](/cfr/42/435.917.md) and [435.918](/cfr/42/435.918.md) and [part 431](/cfr/42/part431.md), [subpart E](/cfr/42/subpartE.md) of this subchapter;
    - (ii) Disenroll such beneficiary not later than the end of the month following the month in which the 30-calendar day period under [paragraph (a)(2)](#a-2) of this section ends and after the provision of advance written notice and fair hearing rights consistent with [§§ 435.917 through 435.918](/cfr/42/435.917..435.918.md) and [part 431](/cfr/42/part431.md), [subpart E](/cfr/42/subpartE.md) of this subchapter prior to the disenrollment;
    - (iii) Include in the clear statement of the specific reasons supporting the intended action under [§ 431.210(b)](/cfr/42/431.210.md?p=b) of this subchapter that the individual failed to:
      - (A) Make a satisfactory showing of compliance with the community engagement requirement under [§ 435.552](/cfr/42/435.552.md), including by meeting the criteria for an exception to be deemed as having demonstrated community engagement under [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md), for the month(s) specified in accordance with [§ 435.556(a)](/cfr/42/435.556.md?p=a); and
      - (B) Make a satisfactory showing that the community engagement requirement does not apply to the individual on the basis that the individual does not meet the definition of applicable individual at [§ 435.551](/cfr/42/435.551.md), including failure to demonstrate the individual meets the criteria for one or more of the categories of a specified excluded individual under [§ 435.554](/cfr/42/435.554.md); and
    - (iv) Determine the individual's or beneficiary's potential eligibility for other insurance affordability programs in accordance with [§ 435.1200(e)](/cfr/42/435.1200.md?p=e).
- (e) **Prohibition on restrictions to re-applying for coverage.** An agency must not impose any restriction on an applicable individual's ability to re-apply for coverage or their ability to receive coverage if determined eligible upon reapplication based on a prior denial of eligibility or disenrollment for noncompliance under this section.
- (f) **Reconsideration period.** A State must reconsider eligibility consistent with [§ 435.916(a)(3)(iii)](/cfr/42/435.916.md?p=a-3-iii), if an individual, who was enrolled with eligibility based on MAGI, was disenrolled for failure to submit information requested in a notice of noncompliance and submits the information during the reconsideration period described in [§ 435.916(a)(3)(iii)](/cfr/42/435.916.md?p=a-3-iii).

# §435.559. Implementation timing for the community engagement requirement.

- (a) Unless granted an exemption under [§ 435.560](/cfr/42/435.560.md), the agency must require applicable individuals, as defined at [§ 435.551](/cfr/42/435.551.md), to comply with the requirement to demonstrate community engagement under §§ [435.552](/cfr/42/435.552.md) and [435.556](/cfr/42/435.556.md), or be deemed to have demonstrated community engagement under [§ 435.553](/cfr/42/435.553.md) or, if applicable, [§ 435.555](/cfr/42/435.555.md), as a condition of eligibility for medical assistance furnished on or after January 1, 2027.
- (b) The agency may elect to implement [§§ 435.550 through 435.563](/cfr/42/435.550..435.563.md) before January 1, 2027, under the State plan or a demonstration project under [section 1115](/cfr/42/1115.md) of the Act.
- (c) For a beneficiary who is enrolled as of the State's implementation date, the agency must verify compliance with the community engagement requirement at the applicable individual's first renewal initiated on or after the implementation date.