To clarify, the FARs require an operational autopilot. There is no requirement in the FARs that it be engaged.
Actually the FARS, specifically Appendix G to Part 91 only says "the aircraft must be equipped with at least one automatic altitude control system ..."
AC 91-85 says "An automatic altitude-control system should be operative and engaged during level cruise, except when circumstances such as the need to retrim the aircraft or turbulence reguire disengagement." Of course an AC is only guidance.