12 States Are Already Solving the Benefits Cliff. Is Yours One of Them?

For years, the benefits cliff has been the problem everyone acknowledged and no one legislated. That changed on January 6, 2026, when Senator Jon Husted introduced the Upward Mobility Act—a bipartisan-framed bill that would create a five-year pilot allowing states to combine funding from 10 federal anti-poverty programs into a single stream and design graduated benefit phase-outs. Meanwhile, 12 states are already running their own cliff mitigation pilots. The policy landscape is moving. The question is whether your organization is ready to operate in it.

What the Upward Mobility Act Would Do

The bill would let five pilot states combine funding from SNAP, TANF, Section 8, Rural Rental Assistance, Public Housing, the Child Care Development Fund, LIHEAP, CDBG, and WIOA Dislocated Workers into a single flexible funding stream with graduated benefit reductions. Congressman Blake Moore introduced companion legislation in the House. The Alliance for Opportunity and multiple state-level organizations have endorsed the approach.

This is the first serious federal legislative vehicle for benefits cliff reform with real political momentum. Even if it doesn't pass this session, it establishes the framework that future legislation will build on—and states aren't waiting.

12 States Are Already Moving

Colorado, Connecticut, DC, Maine, Massachusetts, New Hampshire, Ohio, Rhode Island, Tennessee, Utah, Vermont, and Washington are piloting benefits cliff mitigation across Child Care, HUD, LIHEAP, Medicaid/CHIP, SNAP, and TANF. Washington, DC's $17.7 million pilot with roughly 600 families showed employment rates rising from 35% to 41% in early results. Rhode Island's Post-Employment Benefits Program, launching June 2026, will provide $200 per month for up to 12 months for those exiting TANF—a concrete graduated phase-out model.

These pilots are generating real data about what works. If your state isn't one of them, you should be watching what they're learning. If your state is, you should be part of the conversation.

The ACA Cliff Is Back

The enhanced ACA premium subsidies expired on January 1, 2026. Enrollees whose household income exceeds 400% of the Federal Poverty Level by even one dollar now lose all premium tax credits. This isn't a gradual phase-out. It's a cliff—and it affects families at higher income levels who may not realize the cliff applies to them until they file their taxes.

The Metrics Problem

Current WIOA performance metrics incentivize exactly the wrong behavior. Combined with limited funding, workforce boards are encouraged to exit workers from programs once they obtain any job—regardless of wage or sustainability. A workforce board that exits someone into a $12/hour job and calls it a “placement” has hit a metric. But if that placement triggers a benefits cliff that makes the family financially worse off than before, the system has failed.

The Upward Mobility Act's framework essentially requires the kind of coordinated, long-horizon case management that measures trajectory, not just placement. The policy world is catching up to what frontline staff have known for years: you can't measure success at the point of exit. You have to measure it 12 months later.

The Path Forward

Benefits cliff legislation is moving at both the state and federal level. Whether the Upward Mobility Act passes this session or not, the direction is clear: graduated, coordinated approaches are replacing the cliff-and-cut model. The organizations that build integrated data systems, modeling tools, and case management workflows for this reality now will be positioned when the policy catches up. The ones still running parallel tracks for workforce and benefits will be scrambling.

The 12 pilot states are proving that cliff mitigation works. The federal bill is establishing the framework. The only question left is organizational: are you building the system, or waiting for someone else to?