What Just Changed and When
The CBO estimates 10.5 million people will lose Medicaid directly. Johns Hopkins researchers put the total at up to 15 million by 2034, including ACA marketplace losses. Federal Medicaid spending will be cut by approximately $911 billion over 10 years, according to KFF and CBO analysis.
Three provisions are driving most of the coverage loss:
- Work requirements kick in January 1, 2027. Medicaid expansion enrollees ages 19-64 must verify 80 hours per month of work, community service, or other qualifying activity. Failure to comply means losing coverage. This single provision is projected to cause 4.8 to 5.2 million coverage losses on its own.
- Biannual eligibility checks now require re-verification every six months, up from once annually. Research on the COVID-era Medicaid unwinding showed this kind of administrative burden leads to massive procedural disenrollment. Eligible people lose coverage because they can't navigate the paperwork, not because they no longer qualify.
- ACA premium tax credit expiration compounds the problem. Enhanced credits expired at the end of 2025. CBO projects 14 million marketplace enrollees will face average premium increases of 75%. Workers who lose Medicaid due to work requirements are also barred from ACA subsidies, leaving them with no subsidized path to coverage.
The HHS deadline to issue interim final rules is June 2026. States have months, not years, to build eligibility systems they've never operated before.
KFF, 2025
Who in Your Workforce Is Most at Risk
According to KFF, 64% of Medicaid expansion adults are employed. Among those, 69% work full-time. They're on Medicaid not because they don't work, but because their jobs don't offer affordable insurance.
The workers most exposed to coverage loss are concentrated in specific industries:
- Service and retail: high turnover creates frequent lapses in documentation compliance, meaning even workers who qualify may lose coverage due to paperwork failures
- Agriculture and food service: sectors with the highest Medicaid reliance and lowest employer-sponsored insurance offer rates
- Manufacturing: Center for American Progress analysis projects 2.7 million workers in these industries could lose coverage in year one alone, rising to 3.4 million in subsequent years
KFF data shows 21% of part-time workers are on Medicaid. ESI offer rates for small firms are far below large employer averages, and 46% of Medicaid-enrolled workers are employed at small firms. Urban Institute research found that only 400,000 to 500,000 of the 5+ million people losing Medicaid would gain employer-sponsored insurance. The rest will become uninsured.
Evidence from Arkansas is instructive. When work requirements were implemented in 2018, 18,000 people lost coverage within six months before the program was struck down in federal court. Research found losses were driven almost entirely by administrative burden, not failure to meet the work threshold. The same dynamic is expected nationally.
Why This Raises the Stakes for Employee Wellness Programs
This is already showing up in benefits data. Mental health appeared for the first time among the top drivers of employer health plan costs in 2026, according to UnitedHealthcare's 2026 Benefits Trends survey. Healthcare costs are projected to rise 6 to 10% for employers, the highest spike in over a decade.
When workers lose coverage and delay care, they don't stop getting sick. They show up to the ER instead of the clinic. For employers with self-funded health plans, those patterns translate directly into claims costs. APA research found that 27% of workers at companies significantly affected by government policy changes reported emotional exhaustion. Workers worried about losing health coverage are experiencing a real, measurable form of stress, and it's arriving at your door whether your wellness program is ready or not.
What "Wellness" Needs to Mean in This Environment
Point-solution perks like step challenges, generic fitness apps, and one-off biometric screenings have weak evidence of long-term health impact. An Illinois Workplace Wellness RCT published in PMC found near-null effects for these kinds of single-modality programs.
Comprehensive, behavior-change-based programs tell a different story. Programs that combine health coaching, chronic disease management, behavioral health support, and personalized health assessment consistently produce measurable outcomes. A peer-reviewed NIH study found a $4.90 return for every $1 spent on comprehensive cardiovascular risk programs. Johnson & Johnson's behavior-change approach generated $2.71 per dollar over six years.
A RAND/DOL-sponsored review of the employer wellness research found that comprehensive programs are the only category with meaningful long-term outcomes data. The evidence concentrates in programs that address the whole person: physical health, behavioral health, and the habits that connect them.
Four Things HR Leaders Can Do Now
- Understand your exposed population. Look at your workforce composition: service workers, part-timers, lower-wage employees. Consider whether your HR team has a plan for outreach, navigation support, or coverage education before the 2027 deadline. Workers who lose coverage mid-year without warning are a workforce disruption, not just a policy footnote.
- Audit your wellness program for behavioral health coverage. Does your current offering address mental health and substance use, not just physical health metrics? An EAP that offers three sessions per issue is not the same as a program built around sustained behavior change. Consider wellness programs for small businesses if you're operating with a lean HR team.
- Assess your disease management programming now, before the claims arrive. Unmanaged chronic conditions among newly uninsured workers will eventually appear in your health plan data. Proactive disease management covering diabetes, hypertension, and cardiovascular risk is significantly cheaper than downstream emergency utilization.
- Evaluate whether your EAP is actually meeting the moment. Traditional EAPs were designed for crisis referral, not sustained behavior change. The question isn't whether you have an EAP. It's whether it can meaningfully support a workforce taking on more health system responsibility. The bar has moved.
Avidon Health works with employers across all four of these areas: behavioral health programming, chronic disease management, and EAP-ready coaching. If you're not sure where your current program stands, that's usually the right place to start.
