More than half a million New Jersey residents will face new federal requirements next year to maintain Medicaid coverage, prompting state officials to warn that complicated paperwork and administrative hurdles could cause some eligible residents to lose their health insurance.

Beginning Jan. 1, approximately 540,000 adults — about 30% of New Jersey’s 1.85 million Medicaid recipients — will be subject to new work and activity requirements under federal law. Some recipients will qualify for exemptions.

Adults ages 19 to 64 who receive Medicaid through the Affordable Care Act expansion will generally be required to complete at least 80 hours per month of approved activities, which can include employment, school or vocational training, or volunteer work. Parents, caregivers and people with certain disabilities or medical conditions may be exempt, while children and adults 65 and older are not subject to the requirement.

Affected NJ FamilyCare members will also be required to renew their eligibility every six months instead of annually.

The New Jersey Department of Human Services has urged the federal Centers for Medicare & Medicaid Services to simplify the process, reduce documentation requirements and provide states with additional guidance and implementation time.

Human Services Commissioner Stephen Cha said the state will comply with the law but is seeking greater flexibility to prevent unnecessary administrative barriers from causing eligible residents to lose coverage.

State officials have raised particular concerns over how medical exemptions will be determined. Federal guidance allows exemptions for people whose medical conditions leave them “significantly impaired,” but New Jersey officials argue that the standard is unclear and could force residents with serious medical conditions, disabilities, mental illness or substance use disorders to provide extensive documentation.

Self-attestation for medical exemptions will be permitted during the first year of the program, but documentation is currently expected to be required beginning in 2028.

New Jersey officials are also seeking additional time to update computer systems, train workers and communicate the changes to hundreds of thousands of residents before the new requirements take effect.