Federal Policy Changes Under H.R. 1:
What Illinois Providers, Clients & Families Need to Know
H.R. 1 (the federal budget reconciliation law signed July 4, 2025) is changing eligibility, funding, and administration across both Medicaid and SNAP — and it touches other programs relevant to Illinois' community-based service system. IARF is partnering with the Illinois Department of Human Services (IDHS) and the Illinois Department of Healthcare and Family Services (HFS) to keep members, clients, and families informed as each change takes effect.
SNAP Work Requirements
Illinois' SNAP work-requirement waiver ended January 31, 2026. Since then, Able-Bodied Adults Without Dependents (ABAWDs) who don't meet or qualify for an exemption from the work requirement are limited to three months of benefits within a fixed three-year window. This is an ongoing, rolling limit — not a single cutoff date — so it's worth checking status regularly rather than assuming a one-time deadline has passed.
Current Status
Where Things Stand as of July 2026
Expanded ABAWD Definition
ABAWD now covers adults ages 18–64 (up from 18–54), and only children under age 14 count as dependents for exemption purposes.
Rolling 3-Month Limit
Non-exempt ABAWDs who aren't meeting the work requirement can receive SNAP for only 3 months within the fixed period Jan 1, 2024 – Dec 31, 2026. The first cohort lost benefits May 1, 2026; others may hit their own 3-month mark later in the window.
Not Everyone Is Affected
Many recipients already meet requirements or qualify for an exemption. Use the IDHS screener to check current status — don't assume benefits will be cut without verifying.
SNAP Noncitizen Eligibility Changes
H.R. 1 separately narrows SNAP eligibility based on immigration status, effective April 1, 2026. For current recipients, the change is applied at their next redetermination on or after that date.
Check Your ABAWD Status
Use the IDHS online screener to find out if you're classified as an ABAWD, whether you already meet the work requirement, and whether you qualify for an exemption.
Take the Screener — English Cuestionario — EspañolFind Ways to Meet the Requirement
Work an average of 20 hours/week (paid or unpaid), volunteer through a SNAP Employment & Training activity, or do self-initiated community service. IDHS maintains a statewide resource directory.
SNAPWorkRequirements.illinois.govYou may be exempt from the SNAP work requirement if you are:
- Younger than 18 or older than 64
- A parent or household member with a child under age 14
- Medically certified as physically or mentally unable to work
- Pregnant
- Caring for an incapacitated household member
- A regular participant in a drug or alcohol treatment program
- Certain Native Americans under federal Indian health law
This is not an exhaustive list. Use the IDHS Screener to confirm exemption status and access the correct form to file.
Noncitizen Eligibility Changes
Which groups are affected by the April 1, 2026 SNAP immigration-status change, and what support is available.
Learn More →SNAP Work Rules — Request for Exemption Form
The exact form IDHS sent to current ABAWDs to document an exemption.
Download Form →Food Connections
Interactive maps and free food programs statewide — no prior application needed, useful for anyone affected while their status is being sorted out.
Find Food →IDHS SNAP Federal Impact Center
IDHS's own H.R.1 hub for SNAP: work requirements, noncitizen eligibility, news releases, and county/district-level enrollment data.
Visit Hub →SNAP Work Requirements & Exemptions
Detailed breakdown of who's covered and who's exempt, for staff advising clients.
Read More →SNAP Federal Changes — Frequently Asked Questions
IDHS's FAQ covering the most common questions from customers and partners.
Browse FAQ →Federal Impact to SNAP & Medicaid — Stakeholder Briefing
The August 2025 HHS stakeholder briefing recording and slide deck, plus county/district SNAP enrollment counts.
Watch Briefing →Case managers and support staff can help clients gather verification (caseworker observation, a provider's statement, or an IDHS disability form) if a client needs to document a work-limiting condition. Reducing household-reported errors on applications also helps lower Illinois' SNAP payment error rate statewide.
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Medicaid Changes
H.R. 1 makes significant cuts to Medicaid. HFS estimates coverage loss for roughly 500,000 Illinois Medicaid customers, with the state facing a reduction in federal Medicaid funding of $26–51 billion over the next decade. Changes roll out on a phased timeline through 2029, with the first major provisions taking effect October 1, 2026 and January 1, 2027.
Effective-Date Timeline
Key Provisions & When They Start
Provider tax freeze (no new or higher provider taxes); new State Directed Payments (SDPs) capped at 100% of Medicare rates; one-year prohibition on Medicaid funding to Planned Parenthood.
Medicaid eligibility for noncitizens narrows to Lawful Permanent Residents (5+ years), certain Cuban/Haitian entrants, and COFA residents. Refugees, asylees, and certain trafficking/violence victims lose Medicaid eligibility under this provision.
Medicaid work requirements begin (ages 19–64; dependents 14+ included); ACA expansion adults move to 6-month redeterminations; retroactive coverage window shrinks.
Provider "hold harmless" threshold begins phasing down, tightening how much states can raise through provider taxes.
Existing State Directed Payments begin stepping down 10 percentage points per year until they reach 100% of Medicare rates.
Expanded cost-sharing begins for ACA expansion adults above 100% FPL (out-of-pocket cap: 5% of annual income). Primary care, mental health, and substance use disorder services are explicitly exempt, as are all services delivered by CCBHCs, FQHCs, and RHCs.
Cost-sharing exemption detail: National Council for Mental Wellbeing H.R.1 Hub.
Who is exempt from the Medicaid work requirement?
- People with disabilities
- Individuals with a mental health diagnosis
- Individuals with a substance use disorder
- Parents/caregivers of a dependent under age 14
Requirement details: adults ages 19–64 must verify 80 hours/month of work, volunteering, or part-time school enrollment, at application and annual redetermination. Effective January 1, 2027.
HFS Stakeholder Webinar Series
Medicaid Changes Under H.R. 1
Work Requirements & Community Engagement
1:30–2:30 PM Central. Registration required.
Register →Exemptions from Work Requirements
1:30–2:30 PM Central. Registration required.
Register →Redeterminations & Retroactive Coverage
1:00–2:00 PM Central. Registration required.
Register →Noncitizen Eligibility Changes & Alternative Resources
Recording plus English & Spanish slide decks from the June 23 session.
Watch Recording →Noncitizen & Address-Update Toolkits
Multilingual Client Resources
Slide Deck, Flyer, Palm Card & Flow Chart
Explains which noncitizens are affected by the October 2026 eligibility change and what to do now.
English PDF →Update Your Address / Stay Reachable
Helps customers keep their contact info current so they don't miss redetermination notices.
English PDF →Full toolkit in all 13 languages available on the HFS Federal Resource Center.
Provider Tax & SDP Changes
Provider tax limits and State Directed Payment caps are projected to cost Illinois nearly $5 billion in federal dollars over 5 years from provider tax changes, and reduce hospital SDPs by $3.4 billion over 5 years — reductions that flow through to provider reimbursement statewide. For expansion states like Illinois, the provider tax "safe harbor" threshold steps down on a set schedule: 6% today → 5.5% (Oct 2027) → 5% (Oct 2028) → 4.5% (Oct 2029).
Revalidation & Compliance
HFS has begun Medicaid provider revalidation; providers who don't complete it risk disenrollment. Check your account status regularly.
Medicaid Technical Assistance Center
HFS help desk for provider billing, enrollment, and revalidation questions.
Visit MTAC →Save Medicaid Toolkit
HFS-produced messaging and materials for provider organizations responding to the Medicaid cuts.
Access Toolkit →Medicaid Federal Policy Changes — Full FAQ
HFS's detailed FAQ covering eligibility, funding, and SNAP crossover questions.
Read FAQ →Other Impacts to Watch
H.R. 1 reaches beyond SNAP and Medicaid eligibility rules. These related items are worth tracking because they affect funding and costs across the community-based service system IARF members operate in. We'll expand this section as more provisions relevant to our field come into focus.
Rural Health Transformation Program
H.R. 1 created a $50 billion federal fund for rural healthcare. Illinois was awarded $193.4 million for 2026 (toward a $1 billion, 5-year application), with funding uses including primary care/behavioral health integration, telehealth, and rural workforce expansion — directly relevant to members providing behavioral health and rehabilitation services in rural Illinois.
Provider Tax & Reimbursement Pressure
The same provider tax and State Directed Payment caps described in the Medicaid section reduce the state dollars available to support providers generally — a funding pressure worth factoring into budget planning even for organizations not directly billing Medicaid for these services.
ACA Marketplace Premiums (related, not H.R. 1)
Separately, the enhanced ACA premium tax credits expired December 31, 2025 under a different law (not H.R. 1 itself). Clients using ACA marketplace coverage may see notably higher premiums in 2026 — worth mentioning alongside H.R. 1 changes since members often experience both at once, even though the two are legally distinct.
Rural Health Transformation Program — Illinois
HFS's application details, funding uses, and timeline.
Read More →HFS Federal Resource Center
The source page for all HFS H.R. 1 / Medicaid materials on this page.
Visit HFS →National Partner Resources
Beyond Illinois state agencies, two national associations IARF members already have access to maintain their own H.R. 1 resource hubs, each written for a specific part of our field: ANCOR for I/DD community-based service providers (IARF members receive full ANCOR membership), and the National Council for Mental Wellbeing for behavioral health and substance use organizations.
Summary of Medicaid Provisions in H.R. 1
ANCOR's overview of key Medicaid provisions, written for I/DD community providers.
Read Summary →Access Rule & Budget Reconciliation Implementation Timeline
Cross-references H.R. 1 changes against the separate HCBS Access Rule — useful for members running HCBS programs.
View Timeline →State Financing Mechanisms: Provider Taxes & SDPs
The provider tax / State Directed Payment changes, explained specifically for I/DD providers.
Read Fact Sheet →Medicaid Work Requirements & People with Disabilities
The administrative burden case against work requirements for I/DD beneficiaries and providers.
Read Fact Sheet →Medicaid Cuts & Community Services
Frequently asked questions on how the cuts affect community-based disability services.
Browse FAQs →ANCOR Medicaid Resource Center
The full hub — advocacy toolkits, fact sheets, workforce data, and ongoing updates.
Visit ANCOR →H.R. 1 Direct Service Provider Talking Points
Written for frontline staff, not policy teams — useful for training direct support and case management staff.
Get Talking Points →H.R. 1 Implementation Journey Map
Visual walkthrough of how the changes unfold for organizations and the clients they serve.
View Journey Map →H.R. 1 Implementation Timeline
Federal/CMS-level effective-date timeline, a useful cross-check against the Illinois-specific dates above.
View Timeline →Medicaid Work Requirements: Impact & Recommendations
Analysis of how community engagement requirements affect behavioral health and SUD service organizations.
Read White Paper →National Council H.R. 1 Hub
The full hub — RHTP resources, work requirement guidance, redetermination fact sheets, and CMS resources.
Visit National Council →Stay Informed
Ongoing Updates
IARF NewsNotes
Weekly hot-sheet on Capitol and state agency updates relevant to members.
Read NewsNotes →HFS Stakeholder Newsletter
Quarterly updates on major HFS initiatives, policy, and program changes.
Subscribe →
Illinois Department of Human Services (IDHS) — source for SNAP work requirement content on this page.
Illinois Dept. of Healthcare and Family Services (HFS) — source for Medicaid content on this page, via its Federal Resource Center.
IARF Policy Context
Working with the State of Illinois to disseminate information on H.R. 1's changes to Medicaid, SNAP, and related federal programs is a pillar of IARF's 2026 Strategic Framework. Member organizations are encouraged to share these resources with clients, families, and community partners. For policy updates, visit the IARF Policy Action Center or review the 2026 Strategic Framework.
