Indiana Medicaid Work Requirements: What HIP Members in Addiction Treatment Need to Know

Updated July 27, 2026

Beginning January 1, 2027, Indiana will impose new work and community-engagement requirements on many adults covered through the Healthy Indiana Plan (HIP). Depending on when someone applies or renews coverage, Indiana may examine activity or exemption status during months before that date.

The encouraging news for people receiving substance use disorder treatment is that Indiana’s published guidance identifies two potentially relevant exemptions. HIP members may be exempt for a month if they are:

• in a drug or alcohol treatment program; or
• medically frail or have special medical needs, which Indiana says includes having a substance use disorder or a serious mental health condition.

Indiana has not yet published all the technical details explaining how these exemptions will be identified and verified. People receiving treatment should therefore understand what the state currently says, when the requirements may affect them, and what they can do now to protect their coverage.

What are Indiana’s new HIP work requirements?

Beginning January 1, 2027, most HIP members between ages 19 and 64 must satisfy the work requirement unless they qualify for an exemption.

A member can generally meet the requirement by completing at least 80 hours per month through one or more qualifying activities, including:

• employment;
• community service or volunteering;
• college or job training;
• an internship; or
• an approved work program.

Attending school at least half-time also satisfies the requirement. A member may also qualify based on monthly earnings.

Indiana will check members’ compliance every three months, while HIP eligibility renewals will occur every six months. The timing will vary based on each member’s application and renewal dates. The state provides additional information on its HIP Work Requirements page.

Do the requirements really begin before January 2027?

The requirements officially take effect January 1, 2027, but some applicants may need to demonstrate compliance or an exemption for months in 2026.

Indiana says applicants must establish compliance or exemption status for the three months before applying. Therefore, someone applying for HIP in January 2027 could be evaluated based on October, November, and December 2026.

That does not mean October is the universal starting date for everyone already enrolled in HIP.

For existing members, Indiana’s sample notice says the state will begin applying the requirement at renewals occurring on or after April 1, 2027. A member renewing in May 2027, for example, would need to demonstrate compliance or exemption status for February, March, and April.

The relevant months will therefore depend on whether the person is applying or renewing and on the date of the individual renewal.

Who is exempt?

Indiana’s current guidance lists numerous exemptions. These include certain parents and caregivers, pregnant and postpartum people, qualifying former foster youth, members of federally recognized Tribes, certain veterans, people following SNAP or TANF work rules, and people who are incarcerated or were recently released.

Two exemptions are particularly important for people receiving behavioral health treatment.

Indiana says a HIP member does not have to meet the work requirement for a month if, for at least one day during that month, the member:

1. Is in a drug or alcohol treatment program; or
2. Is medically frail or has special medical needs.

Indiana expressly says the medically frail category includes:

• having a substance use disorder;
• having a serious mental health condition;
• having a serious physical, intellectual, or developmental disability; and
• having another serious or complex medical condition.

These protections are important because treatment and recovery can involve significant clinical demands. Patients may attend individual and group therapy, medical appointments, peer-support services, care-management sessions, drug testing, and intensive outpatient or partial hospitalization programming. Symptoms of addiction or co-occurring mental health conditions may also affect a person’s ability to work, attend school, volunteer, or manage administrative requirements.

Does treatment from any licensed provider qualify?

Indiana’s public guidance says that someone “in a drug or alcohol treatment program” may be exempt. It does not currently limit that language to a particular type of facility, organizational structure, or treatment modality.

The state has not yet explained, however:

• which outpatient providers will be recognized as treatment programs;
• whether provider ownership or organizational structure will matter;
• whether in-person, virtual, and hybrid programs will be treated identically;
• which claims, diagnoses, medications, or service codes will produce an automatic exemption;
• whether having an SUD diagnosis will be sufficient to establish medical frailty in every case;
• how Indiana will evaluate co-occurring SUD and mental health conditions; or
• what documentation a provider or member must submit when the state cannot verify an exemption from its existing records.

Indiana has said it will release additional information as implementation progresses. Until it does, patients and providers should not assume either that every person in treatment will be identified automatically or that treatment delivered in a particular setting will be excluded.

The state’s current language is nevertheless meaningful: it recognizes both treatment participation and SUD-related medical frailty as potential protections. Indiana should implement those protections broadly and consistently across legitimate clinical settings.

How will Indiana determine whether someone is exempt?

Indiana says it will first use information it already has to determine whether a member met the requirement or qualifies for an exemption. That information could include eligibility records, Medicaid claims, encounter data, diagnoses, prescriptions, or other state data.

If the state cannot verify compliance or an exemption, it will send the member a notice requesting additional information. Indiana’s sample notice says the member will have 35 days to respond.

A missing claim should not necessarily mean that a person does not qualify. Claims can be delayed, incomplete, submitted under different provider classifications, or lack enough information to demonstrate the nature or intensity of treatment. Newly diagnosed patients and people who recently entered treatment may have little relevant claims history.

That makes it essential for Indiana to provide a straightforward method for patients and treating providers to confirm treatment, diagnosis, or medical-frailty status when automated verification is unsuccessful.

What should HIP members receiving treatment do now?

HIP members should not wait for a coverage-termination notice to begin preparing. People receiving SUD or intensive mental health treatment can take several steps now:

Confirm that FSSA has current contact information

Make sure Indiana has the correct mailing address, telephone number, and email address. Missing a notice could mean missing the opportunity to provide documentation before coverage ends.

Create or check a Benefits Portal account

The FSSA Benefits Portal can be used to manage coverage and submit requested information. Members should confirm that they can access their accounts before the requirements take effect.

Report entering treatment

Indiana’s sample notice specifically tells members to report changes that may affect an exemption, including entering treatment. Changes can be reported through the Benefits Portal, by telephone, by mail, or at a Division of Family Resources office.

Keep basic treatment information

Members may want to retain:

• the provider’s name and contact information;
• the date treatment began;
• confirmation of active enrollment;
• the general type and frequency of treatment;
• relevant appointment or attendance records; and
• any provider documentation concerning diagnosis, treatment intensity, or functional limitations.

Patients should not ordinarily need to disclose complete psychotherapy notes, detailed substance-use histories, toxicology results, or other sensitive records merely to establish eligibility. Indiana should request only the information necessary to verify the exemption.

Respond promptly to every FSSA notice

If Indiana requests additional information, the member should respond within the deadline even if the state already has related Medicaid claims. Members should retain confirmation that the information was submitted.

Appeal an incorrect decision

Before terminating coverage, Indiana says it will send a separate notice explaining the decision and the right to appeal. A member who believes an exemption was overlooked or incorrectly denied should follow the appeal instructions immediately.

What happens if someone loses HIP coverage?

If a member does not satisfy the work requirement and does not have an approved exemption, Indiana says HIP coverage will stop.

The member may reapply at any time; Indiana does not impose a waiting period or lockout. But even a temporary loss of coverage can interrupt medication, counseling, psychiatric treatment, and recovery support.

Indiana also warns that a person losing HIP because of noncompliance may not qualify for financial assistance for Marketplace coverage during that period, and the coverage loss will not necessarily create a Marketplace special-enrollment period. These consequences make accurate exemption determinations especially important. More detail appears in Indiana’s sample HIP notice.

How Affect Therapeutics can help

Affect Therapeutics provides evidence-based outpatient treatment for substance use and co-occurring mental health conditions through appropriately licensed clinicians.

For current Affect patients, our team can help provide appropriate documentation of facts such as:

• active treatment enrollment;
• treatment dates and frequency;
• diagnosis, when disclosure is authorized and necessary;
• level or intensity of care; and
• clinically documented functional impairment, when applicable.

Affect cannot make the final Medicaid eligibility decision or guarantee that Indiana will approve a particular exemption. That decision belongs to Indiana FSSA. We can, however, help ensure that patients have accurate, concise treatment information if the state requests it.

The bottom line

Indiana’s guidance is encouraging for people receiving addiction treatment. It recognizes that being in a drug or alcohol treatment program may create an exemption and separately identifies substance use disorder and serious mental health conditions within the medically frail category.

The remaining question is how Indiana will translate that language into claims rules, provider criteria, screening processes, and documentation requirements.

Implementation should be broad enough to recognize evidence-based outpatient treatment across licensed clinical settings, whether care is delivered in person, remotely, or through a hybrid model. Patients should not lose Medicaid coverage because claims are delayed, a provider is classified incorrectly, or the patient does not understand which legal exemption applies.

Affect will continue reviewing Indiana’s guidance and update this article as FSSA publishes additional implementation details.

This article provides general information and is not legal advice or a guarantee of Medicaid eligibility. Individual eligibility and exemption decisions are made by Indiana FSSA.