Tracking Section 1332 State Innovation Waivers
Through Section 1332 of the Affordable Care Act (ACA), states may apply for waivers to alter key ACA requirements in the individual and small group insurance markets. States can use the flexibility granted by 1332 waiver authority to shore up fragile insurance markets, address unique state insurance market issues, or experiment with alternative models of providing coverage to state residents. While the ACA provides states with flexibility to alter certain provisions using 1332 waiver authority, it establishes guardrails that limit the extent of the changes states may make. The current statutory language requires that state waiver applications must demonstrate that the innovation plan will provide coverage that is at least as comprehensive in covered benefits; at least as affordable (taking into account premiums and excessive cost sharing); cover at least a comparable number of state residents; and not increase the federal deficit. The ACA requirements states may seek to waive using Section 1332 authority include:
- Individual and employer mandates;
- Essential health benefits (EHBs);
- Limits on cost sharing for covered benefits;
- Metal tiers of coverage;
- Standards for health insurance marketplaces, including requirements to establish a website, a call center, and a navigator program; and
- Premium tax credits and cost-sharing reductions.
Additionally, states may request an aggregate payment of what residents would otherwise have received in premium tax credits and cost-sharing reductions, referred to as subsidy pass-through funding. States may not waive certain provisions through section 1332, including guaranteed issue, age rating, and prohibitions on health status and gender rating. While states can submit 1332 waivers in conjunction with Medicaid waivers (under Sec. 1115 of the Social Security Act), 1332 waivers cannot be used to change Medicaid program requirements. To date, most states have sought 1332 waivers to implement reinsurance programs to lower premiums in the marketplaces. However, new guidance and waiver concepts issued by the Trump administration in 2018 encourage states to use 1332 waiver authority to make broader changes to insurance coverage for their residents. The map below shows the status of 1332 waivers requested by states.
Additional details on state waivers are provided below.
Approved Waivers
| Alaska | |
| Description | Allow federal pass through funding to partially finance the state’s Alaska Reinsurance Program (ARP). The ARP would fully or partially reimburse insurers for incurred claims for high-risk enrollees diagnosed with certain health conditions. |
| Date Submitted | December 29, 2016 |
| Date Approved | July 7, 2017 |
| Source | Alaska 1332 waiver application and Waiver approval letter. |
Colorado | |
| Description | Allow federal pass through funding to partially finance a reinsurance program to be administered by the Colorado Department of Insurance. The reinsurance program will reimburse insurers 60% of claims paid between $30,000 and an estimated $400,000 cap. |
| Date Submitted | May 20, 2019 |
| Date Approved | July 31, 2019 |
| Source | Colorado 1332 waiver application and Waiver approval letter |
| Delaware | |
| Description | Allow federal pass through funding to partially finance Delaware Health Insurance Individual Market Stabilization Reinsurance Program. The reinsurance program will reimburse insurers 75% of claims paid between $65,000 and $215,000. |
| Date Submitted | July 10, 2019 |
| Date Approved | August 20, 2019 |
| Source | Delaware 1332 waiver application and Waiver approval Letter |
| Georgia | |
| Description | The Georgia 1332 waiver will create a reinsurance program and establish the Georgia Access Model.
|
| Date Submitted | December 23, 2019 (original application); July 31, 2020 (revised application); October 9, 2020 (further revised application) |
| Date Approved | November 1, 2020 |
| Source | Georgia Section 1332 Waiver Application 10/9/20 and Waiver approval letter |
| Hawaii | ||
| Description | Waive ACA Small Business Health Options Program (SHOP) requirements that conflict with the state’s Prepaid Health Care Act. Enacted in 1974, the Prepaid Health Care Act requires employers to provide more generous coverage than is required under the ACA. Additionally, waive the requirement that the small business tax credits only be available through the SHOP. | |
| Date Submitted | August 10, 2016 | |
| Date Approved | December 30, 2016 | |
| Source | Hawaii 1332 waiver application and Waiver approval letter | |
Maine | |
| Description | Allow federal pass through funding to partially finance reinstatement of the Maine Guaranteed Access Reinsurance Association (MGARA), the state’s reinsurance program that operated in 2012 and 2013. The MGARA will reimburse insurers 90% of claims paid between $47,000 and $77,000 and 100% of claims in excess of $77,000 for high-risk enrollees diagnosed with certain health conditions or who are referred by the insurer’s underwriting judgment. |
| Date Submitted | May 9, 2018 |
| Date Approved | July 30, 2018 |
| Source | Maine 1332 waiver application and Waiver approval letter |
Maryland | |
| Description of Waiver | Allow federal pass-through funding to partially finance the Maryland Reinsurance Program. The plan will reimburse insurers 80% of claims between an attachment point that is to be determined and a cap of $250,000. |
| Date Submitted | May 31, 2018 |
| Date Approved | August 22, 2018 |
| Source | Maryland 1332 waiver application and Waiver approval letter |
Minnesota | |
| Description | Allow federal pass-through funding to partially finance the Minnesota Premium Security Plan (MPSP), a reinsurance program that would reimburse insurers 80% of claims above $50,000 and up to a cap of $250,000. The waiver also seeks federal pass-through funding equal to the amount the federal government would have spent on tax credits and cost sharing subsidies for residents eligible for the state’s Basic Health Program, MInnesotaCare if the reinsurance program were not in place. |
| Date Submitted | May 5, 2017 |
| Date Approved | September 22, 2017. Although the federal government approved pass-through funding for the reinsurance program, it did not approve pass-through funding for BHP, thus providing the state with less federal funding than it had sought. |
| Source: | Minnesota 1332 waiver application and supporting materials; Letter from Governor Dayton to HHS Secretary Price; Waiver approval letter. |
Montana | |
| Description | Allow federal pass through funding to partially finance a reinsurance program to be administered by the Montana Reinsurance Association Board and the Commissioner of Securities and Insurance. The reinsurance program will reimburse insurers 60% of claims paid between $40,000 and an estimated $101,750 cap. |
| Date Submitted | June 19, 2019 |
| Date Approved | August 16, 2019 |
| Source: | Montana 1332 waiver application and Waiver approval letter |
New Hampshire | |
| Description | Allow federal pass-through funding to partially finance the New Hampshire reinsurance programs. The New Hampshire Health Plan would reimburse insurers a target coinsurance percentage of 74% of claims between $60,000 and $400,000 for plan year 2021. |
| Date Submitted | April 21, 2020 |
| Date Approved | August 5, 2020 |
| Source | New Hampshire 1332 waiver application and Waiver approval letter |
New Jersey | |
| Description | Allow federal pass-through funding to partially finance the Health Insurance Premium Security Plan. The plan would reimburse insurers 60% of claims between $40,000 and $215,000. |
| Date Submitted | July 2, 2018 |
| Date Approved | August 16, 2018 |
| Source | New Jersey 1332 waiver application and Waiver approval letter |
North Dakota | |
| Description of Waiver | Allow federal pass through funding to partially finance the Reinsurance Association of North Dakota (RAND). RAND would reimburse insurers 75% of claims paid between $100,000 and $1,000,000. |
| Date Submitted | May 10, 2019 |
| Date Approved | July 31, 2019 |
| Source | North Dakota 1332 waiver application and Waiver approval letter |
| Oregon | |
| Description | Allow federal pass-through funding to partially finance the Oregon Reinsurance Program (ORP). The ORP would reimburse insurers 50% of claims between an attachment point (to be determined) and an estimated $1 million cap. |
| Date Submitted | August 31, 2017 |
| Date Approved | October 18, 2017 |
| Source | Oregon 1332 waiver application and Waiver approval letter |
| Pennsylvania | ||
| Description | Allow federal pass-through funding to partially finance the Pennsylvania Reinsurance Program. The plan would reimburse insurers an estimated 60% of claims between an attachment point of $60,000 and an estimated $100,000 cap for plan year 2021. | |
| Date Submitted | February 11, 2020 | |
| Date Approved | July 24, 2020 | |
| Source | Pennsylvania 1332 waiver application and Waiver approval letter. | |
| Rhode Island | ||
| Description | Allow federal pass-through funding to partially finance the Rhode Island Reinsurance Program. The plan would reimburse insurers an estimated 50% of claims between an attachment point of $40,000 and an estimated $97,000 cap for plan year 2020. | |
| Date Submitted | July 8, 2019 | |
| Date Approved | August 26, 2019 | |
| Source | Rhode Island 1332 waiver application and Waiver approval letter. | |
Wisconsin | |
| Description | Allow federal pass-through funding to partially finance the Wisconsin Healthcare Stability Plan (WIHSP). The WIHSP will reimburse insurers 50%-80% (exact percentage to be determined) of claims between $50,000 and $250,000. |
| Date Submitted | April 19, 2018 |
| Date Approved | July 29, 2018 |
| Source | Wisconsin 1332 waiver application and Waiver approval letter |
Waivers Deemed Incomplete
| Idaho | |
| Description | Permit individuals with incomes 100%-138% FPL who would otherwise be eligible for Medicaid to receive advanced premium tax credits to purchase a qualified health plan through the Idaho health insurance exchange instead of enrolling in Medicaid. Any individual eligible for Medicaid may choose to enroll in Medicaid instead of purchasing coverage through the marketplace. |
| Date Submitted | July 15, 2019 |
| Status | Waiver deemed incomplete on August 29, 2019. In its letter to the state, CMS indicated that the state’s application did not include sufficient information to evaluate the effect of the waiver and even if the application were to be completed, it would not be approvable because it does not meet the “deficit neutrality” requirement. |
| Source | Idaho 1332 waiver application and CMS letter |
| Massachusetts | |
| Description | Waive cost sharing reduction (CSR) payments to insurers in Massachusetts and allow federal pass-through funding of those CSR payments and any advanced premium tax credit (APTC) payments resulting from lower premiums to partially finance a Premium Stabilization Fund (PSF). The PSF will make payments to insurers that are equivalent to the payments that would have been made through the federal CSR program. |
| Date Submitted | September 8, 2017 |
| Status | Waiver deemed incomplete on October 23, 2017. CMS indicated in the letter that given the required federal comment period, the waiver could not be implemented for the 2018 coverage year. |
| Source | Massachusetts 1332 waiver application and CMS letter |
| Ohio | |
| Description | Waive the individual mandate requirement. Although Congress “zeroed out” the penalty associated with the individual mandate beginning in 2019, it did not eliminate the requirement. |
| Date Submitted | March 30, 2018 |
| Status | Waiver deemed incomplete on May 17, 2018. In its letter to the state, CMS indicated that the application did not comply with section 1332 requirements. |
| Source | Ohio 1332 waiver application and CMS letter |
| Vermont | |
| Description | Allow small employers to enroll directly with health insurance carriers rather than through an online SHOP web portal. The state had adopted the direct enrollment approach for small businesses after the SHOP portal developed by the state failed to launch in 2014. |
| Date Submitted | March 15, 2016 |
| Status | Waiver deemed incomplete on June 9, 2016. Guidance from CMS issued on April 18, 2016 delayed the required implementation of the SHOP online portal until 2019 and the final Notice of Benefit and Payment Parameters for 2019 permanently eliminated the requirement. As a result, the state is no longer pursuing the waiver. |
| Source | Vermont 1332 waiver application and CMS letter |
Withdrawn Waivers
California | |
| Description | The state requested approval to provide California Qualified Health Plans (CQHPs) to individuals ineligible to purchase coverage through Covered California, the state’s marketplace, due to their immigration status. Individuals purchasing CQHPs would not be eligible for premium tax credits or cost sharing subsidies. |
| Date Submitted | December 16, 2016 |
| Date Withdrawn | January 18, 2017 |
| Source | California 1332 waiver application; Letter withdrawing application |
Iowa | |
| Description | The state sought to establish the Iowa Stopgap Measure (ISM) to restructure the coverage offered in the state’s individual market and to establish a reinsurance program.
|
| Date Submitted | August 21, 2017 |
| Date Withdrawn | October 23, 2017 |
| Source | Iowa Stopgap Measure, Iowa Insurance Division, August 21, 2017 and Iowa Stopgap Measure Supplement submitted to CCIIO. Additional information available at: https://iid.iowa.gov/iowa-stopgap-measure. Letter withdrawing application |
| Oklahoma | |
| Description | The state requested federal pass-through funding to partially finance the Oklahoma Individual Health Insurance Market Stabilization Program (OMSP). The OMSP would reimburse insurers 80% of claims above $15,000 and up to $400,000. The state estimated OMSP would reduce premiums by over 30% and requested that funds the federal government would have paid in premium tax credits to eligible marketplace enrollees had the reinsurance program not been in place be provided to the state to finance the program. |
| Date Submitted | August 15, 2017 |
| Date Withdrawn | September 29, 2017 |
| Source | Oklahoma 1332 waiver application; Letter withdrawing application |