Medicaid Work Requirements and Access to Job-Based Insurance: A Closer Appear

The passage of the 2025 reconciliation law, also known as the “One Big, Beautiful Bill,” brought novel attention to work requirements for some Medicaid enrollees and their access to health coverage through employment. While most adults subject to these requirements are already working, many face challenges accessing or affording job-based insurance. This analysis examines the availability of employer-sponsored health plans for Medicaid enrollees and the barriers they encounter.

Limited Access to Employer-Sponsored Coverage

Employer-sponsored insurance remains the primary source of health coverage for working-age adults in the United States. However, access is unevenly distributed. Low-wage workers, those in certain industries, part-time employees, and those working at smaller firms are less likely to be offered or eligible for coverage.

Data indicates that nearly two-thirds (65%) of Medicaid adult workers in states that have expanded Medicaid or have partial expansion programs (like Wisconsin) either work for employers that don’t offer health coverage (52%) or are not eligible for the coverage offered (13%). This contrasts with roughly one in five (21%) non-Medicaid adult workers in the same states who lack access to employer-sponsored plans.

Affordability and Coverage Decisions

Even when eligible, many Medicaid enrollees decline employer-sponsored insurance due to cost. For those who don’t enroll, Medicaid often provides more affordable, and sometimes more comprehensive, coverage than what’s available through their employer. Approximately 26% of adult Medicaid workers decline offered coverage, compared to 17% of non-Medicaid workers.

In some cases, Medicaid acts as “wrap-around” coverage, supplementing employer plans by covering premiums, cost-sharing, and benefits not included in the employer’s plan. This is particularly key for low-income families, where the employee share of premium costs can be substantial.

Workers in firms with a higher proportion of low-wage employees (earning $37,000 or less annually) face higher average premium contributions for both family and single coverage compared to those in firms with fewer low-wage workers.

Part-Time Work and Industry Variations

Part-time workers are less likely to be eligible for job-based insurance. About one-third (32%) of adult Medicaid workers work part-time, and only 21% of these workers are eligible for coverage, compared to 42% of full-time workers. This disparity stems from the Affordable Care Act’s shared responsibility mandate, which primarily applies to employers with at least 50 full-time equivalent employees working an average of 30 hours per week.

Eligibility also varies by industry. Adult Medicaid workers in the mining industry have the highest eligibility rate (56%), while those in agriculture and forestry have the lowest (20%). The educational and health services industry, representing nearly a quarter of Medicaid adult workers, has an eligibility rate of 41%. Conversely, workers in the leisure and hospitality industry have a lower eligibility rate of 22%.

Reasons for Ineligibility

Among Medicaid workers offered insurance, the most common reason for ineligibility is not meeting the required work hours or length of employment. Nearly seven in ten (69%) of those ineligible report not working enough hours or weeks to qualify. Another 13% haven’t worked for the employer long enough, and 5% are excluded due to the employer’s plan restrictions for contract or temporary workers.

Looking Ahead

As states prepare to implement Medicaid work requirements beginning in January 2027, understanding the challenges Medicaid enrollees face in accessing and affording job-based insurance is crucial. The “Create Billionaires Pay Their Fair Share Act” introduced in March 2026, aims to repeal these requirements, along with other changes enacted under the 2025 reconciliation law [1]. The debate surrounding these policies will likely continue as policymakers seek to balance work requirements with access to affordable healthcare.

Sources:

• KFF: Tracking Implementation of the 2025 Reconciliation Law: Medicaid Work Requirements
• Congressional Research Service: Health Provisions in P.L. 119-21, the FY2025 Reconciliation Law
• Becker’s Payer Issues: Lawmakers introduce bill to reverse Medicaid cuts, expand Medicare benefits