Relating to work requirements for the Iowa health and wellness plan, public assistance programs, an information technology fund, the public assistance modernization fund, and the Medicaid for employed people with disabilities program, and including effective date provisions

Senate File 615 relates to public assistance programs, work requirements for the Iowa Health and Wellness Plan (IHAWP), an Information Technology (IT) Fund, the Public Assistance Modernization Fund, and the Medicaid for Employed People with Disabilities (MEPD) program. Division I — Iowa Health and Wellness Plan — Work Requirements

Description

Division I of the Bill does the following:

• Requires the Department of Health and Human Services (HHS) to request any federal approval necessary to include work requirements as a condition of maintaining eligibility for the IHAWP.
• Provides that the HHS must require as a condition of eligibility for the IHAWP that a member work at least 80 hours each month.
• Directs the HHS to exempt an individual from the work requirements if they meet certain criteria.
• Requires any exemption applied under the IHAWP to be substantially similar to the exemptions applied under other public assistance programs.
• Requires that, upon approval, the HHS must adopt administrative rules to administer work requirements as a condition of eligibility for the IHAWP.
• Permits the HHS to resubmit a request for federal approval of work requirements for the IHAWP if the initial request is denied or withdrawn for any reason.
• Requires the HHS to discontinue the IHAWP, subject to federal approval, if federal law or regulations affecting work requirements for the IHAWP are modified to exclude work requirements as a basis for maintaining eligibility. If the HHS is not allowed to discontinue the IHAWP, the HHS may implement an alternative plan as specified in the Medicaid State plan or a waiver for coverage of the affected population.

Division I of the Bill takes effect upon enactment.

Background

The IHAWP, also known as Medicaid expansion, is provided for in Iowa Code chapter 249N. The federal Patient Protection and Affordable Care Act, more commonly referred to as the Affordable Care Act (ACA), was signed into law on March 23, 2010, giving states the option to expand their Medicaid programs to all adults ages 19 through 64 with income at or below 133.0% of the federal poverty level (FPL). Through 2013 Iowa Acts, chapter 138 (FY 2014 Health and Human Services Appropriations Act), Iowa expanded Medicaid eligibility. As of April 2025, there were approximately 183,000 individuals enrolled in the IHAWP. Approximately 162,000 individuals enrolled in the IHAWP are nonmedically exempt.

On January 11, 2018, the Centers for Medicare and Medicaid Services (CMS) announced new policy guidance to allow states the option to require work or community engagement (WCE) activities among able-bodied, working-age Medicaid beneficiaries through a Medicaid waiver under section 1115 of the Social Security Act. The CMS approved these waivers in 13 states. The CMS began withdrawing waiver approvals with work requirements in 2021. In June 2018, Arkansas became the first state to implement the work requirements waiver. The waiver established a WCE requirement for able-bodied individuals enrolled in Arkansas’s Medicaid expansion program. These individuals were required to engage in 80 hours of WCE activities per month, including working, attending education classes, training, and volunteering. The requirements only applied to individuals ages 19 through 49, and the waiver provided for certain exemptions, including if the individual was already exempt from Supplemental Nutrition Assistance Program (SNAP) work requirements, if the individual had a dependent child in the household, and if the individual was identified as medically frail, among others. Individuals were required to report their WCE or exemption status using an online portal or by phone. Individuals who did not meet the requirements for any three months would lose coverage for the rest of the calendar year. Beginning in June 2018, the plan was phased in, starting with individuals 30 to 49 years of age who were at or below 100.0% of the FPL. In September 2018, approximately 73,000 individuals were subject to the WCE requirements, and by December 2018, approximately 18,000 individuals (ages 30 through 49) were disenrolled from Medicaid expansion coverage due to failure to meet the WCE and reporting requirements. Approximately 1,900 individuals regained coverage in 2019. In January and February of 2019, the remaining individuals were phased in; however, a federal judge halted the program in March 2019. As a result, the disenrollment data from Arkansas is reflective of only the first phase. The Legislative Services Agency (LSA) published an Issue Review on Medicaid Work Requirements in 2021.

The HHS published a public notice on April 15, 2025, stating that the HHS will submit a request to amend Iowa’s IHAWP Demonstration to the CMS.

Assumptions

• The federal government will accept the request for approval.
• This estimate does not consider what may happen if the federal government denies the request for approval.
• Federal law will remain current through FY 2027.
• There are approximately 183,000 individuals enrolled in the IHAWP, of which approximately 11.0% are medically exempt.
• Only nonmedically exempt individuals will be disenrolled from the program due to the WCE requirements.
• Approximately 162,000 individuals enrolled in the IHAWP are nonmedically exempt.
• Approximately 10.0% of nonmedically exempt individuals may not be subject to the work and reporting requirements due to further exemptions provided in the Bill.
• Based on numbers from Arkansas, approximately 24.8% of individuals not exempt may fail to meet the WCE and reporting requirements.
• Based on numbers from Arkansas, approximately 10.5% of individuals who lose IHAWP coverage will regain coverage.
• Approximately 32,000 individuals may lose IHAWP coverage due to the WCE requirements.
• Individuals may begin losing coverage starting in calendar year (CY) 2026.
• Decreases in enrollment will be phased in over one year.
• The State will realize approximately 11.6% and the federal government will realize approximately 88.4% of any savings due to decreased IHAWP enrollment.
• Managed care organization (MCO) capitation rates will remain the same in FY 2026 and FY 2027.
• The HHS is expected to administer the Bill with existing resources.

Fiscal Impact

The LSA has not received a response to multiple requests for information from the HHS. However, the LSA estimates that Division I of the Bill may decrease total State Medicaid expenditures by approximately $2.5 million in FY 2026 and approximately $14.4 million in FY 2027.

Sources

• LSA Analysis
• Arkansas Department of Human Services
• KFF
• Division II — Work Rules and Requirements for Public Assistance Programs
• Description
• Division II of the Bill requires the HHS to work with the U.S. Department of Health and Human
• Services and the U.S. Department of Agriculture (USDA) to align the HHS’s work-related
• administrative rules and requirements for participants of public assistance programs, including
• but not limited to SNAP.
• Background
• The SNAP is a federally administered program that supplements the food budget of families by
• providing benefits to purchase healthy and nutritious food. The SNAP is available to
• low-income working families, individuals and households, older adults (60 years and older), and
• people with disabilities. The SNAP is administered by the USDA as part of the Food and
• Nutrition Service (FNS) through 7 U.S.C. §2011 through 2036d and 7 C.F.R. §271 through 285.
• In the State of Iowa, SNAP is administered by the HHS.
• An Employment and Training (E&T) program was added to SNAP in 1985, which required
• states to provide a form of job search assistance, job search training, work experience,
• workfare, or other relevant services to SNAP recipients. There are two different sets of work
• requirements that may apply to a person receiving SNAP benefits: general work requirements
• and able-bodied adult without dependents (ABAWD) work requirements. General work
• requirements apply to most persons ages 16 through 59 who can work, meaning that persons
• need to meet the general work requirements to receive SNAP benefits. General work
• requirements include registering to work, participating in SNAP E&T or workfare programs,
• taking a suitable job if one is offered, and not voluntarily quitting or reducing hours at a job
• without good reason. The ABAWD work requirements apply to persons who are ages 18
• through 54 who can work and have no dependents. Qualifying persons need to meet both
• general work requirements and an additional ABAWD work requirement to receive SNAP
• benefits for more than three months in each three-year time period. A person can meet
• ABAWD requirements by working, participating in a work program, or a combination of the two
• for at least 80 hours each month. It is also possible to meet ABAWD requirements by
• participating in workfare.
• Assumptions and Fiscal Impact
• The LSA has not received a response to multiple requests for information from the HHS.
• However, the LSA estimates that Division II of the Bill will have a minimal fiscal impact to the
• State since work requirements are already imposed for certain SNAP recipients.
• Source
• LSA Analysis
• Division III — Information Technology
• Description
• Division III of the Bill does the following:
• • Establishes an IT Fund under the control of the HHS.
• • Requires all moneys in the Fund to be appropriated to the HHS to be used for IT systems
• and related modernization initiatives.
• • Allows any unexpended funds appropriated to the IT Fund to remain available for the
• succeeding fiscal year and allows any interest or earnings on moneys in the IT Fund to be
• credited to the IT Fund.
• • Repeals the Public Assistance Modernization Fund and transfers any unobligated and
• unencumbered moneys in the Fund on June 30, 2025, to the IT Fund.
• Background
• The Public Assistance Modernization Fund is administered by the HHS and provides funding for
• the purposes of modernizing IT systems and for other modernization initiatives related to the
• delivery of public assistance programs in Iowa, including SNAP, Medicaid, the Family
• Investment Program (FIP), and the Children’s Health Insurance Program (CHIP).
• Assumptions and Fiscal Impact
• As of May 13, 2025, there is approximately $8.3 million in the Public Assistance Modernization
• Fund that would be transferred to the IT Fund and appropriated to the HHS for IT systems and
• modernizations under the Bill.
• Source
• Iowa State Accounting System
• Division IV — Medicaid for Employed People with Disabilities (MEPD) Program
• Description
• Division IV of the Bill provides that for the purposes of determining the amount of an
• individual’s resources under the MEPD program, a maximum of $10,000 of available resources
• for an individual and $21,000 of available resources for a couple must be disregarded.
• Background
• The MEPD program is a Medicaid coverage group that allows individuals with disabilities to
• work while continuing to have access to Medicaid. People who are disabled and have earned
• income can get Medicaid when the individual:
• • Is under age 65.
• • Is still considered to be disabled based on Social Security Income (SSI) medical criteria for
• disability.
• • Has earned income from employment or self-employment.
• • Meets general SSI-related Medicaid eligibility requirements.
• • Is not eligible for any other Medicaid coverage group other than the Qualified Medicare
• Beneficiary Program, the Specified Low-Income Medicare Beneficiary Program, or Medically
• Needy.
• • Has resources less than $12,000 for an individual and $13,000 for a couple.
• • Has net family income less than 250.0% of the FPL.
• • Pays any premium due for the monthly eligibility.
• Assumptions and Fiscal Impact
• The LSA has not received a response to multiple requests for information from the HHS.
• Without additional information regarding the changes to the HHS’s processes, the LSA cannot
• estimate any potential fiscal impact for Division IV of the Bill.