(a) A State must require applicable individuals, as defined at § 435.551, to demonstrate community engagement under § 435.552, or be deemed to demonstrate community engagement under § 435.553 or, if applicable, § 435.555, as a condition of eligibility for medical assistance. The State must require—

(1) For an applicable individual who files an application for medical assistance under a State plan, or a waiver of such plan, demonstration of community engagement for at least one, but not more than 3 consecutive months, as specified in the State plan, immediately preceding the month of application.

(2) For an applicable individual who is enrolled and receiving medical assistance under a State plan, or waiver of such plan, demonstration of community engagement for 1 or more months, as specified in the State plan and subject to paragraph (b) of this section, whether or not consecutive—

(i) During the period between the effective date of such individual's most recent determination or redetermination at renewal, as applicable, and the date the individual's renewal is due, consistent with section 1902(e)(14)(L) of the Act and § 435.916, as applicable, if the State has not opted to conduct more frequent verifications of community engagement compliance under § 435.557(d);

(ii) During the period between the most recent demonstration of community engagement and the date the individual's next demonstration of community engagement is due, consistent with § 435.557(d), if the State has opted to conduct more frequent verifications of community engagement compliance as provided in § 435.557(d); or

(iii) During the period between the effective date of such individual's most recent determination or redetermination at renewal, as applicable, and the end of the month prior to the month in which the individual becomes an applicable individual as a result of a redetermination based on a change in circumstances in accordance with § 435.916(d).

(b) A State must not require an applicable individual to demonstrate community engagement for a period that exceeds the period specified in paragraph (a)(2)(i), (ii), or (iii) of this section, as applicable.

(c) A State may not apply the requirements in paragraph (a) of this section to a specified excluded individual defined at § 435.554.

(d) A State must inform applicants and beneficiaries of the State's eligibility determination consistent with §§ 435.917 and 435.918 and part 431, subpart E of this subchapter, which includes a clear statement of the basis of eligibility consistent with § 435.917(b)(1)(i), or a statement of the State's intended action and the specific reasons for the action consistent with § 431.210(a) and (b) of this subchapter, as applicable, which must specify whether the individual:

(1) Meets the criteria as a specified excluded individual as defined in § 435.554; or

(2) Is determined to be an applicable individual as defined at § 435.551, and whether the individual demonstrates community engagement under § 435.552 or is deemed to have demonstrated community engagement under § 435.553 or, if applicable, § 435.555, for the month(s) specified in accordance with paragraph (a) of this section.