menu

The independent source for health policy research, polling, and news.

Donate

Tracking Section 1332 State Innovation Waivers


Published:

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.

  • Phase 1: Allow federal pass through funding to partially finance a claims-based reinsurance program. For plan year 2022, the reinsurance program will reimburse insurers a percentage of claims paid between $20,000 and an estimated $500,000 cap. The program has a three-tiered reimbursement structure based on geography with greater coinsurance rates (i.e., a higher share of claims paid) for regions with the highest premiums. The state proposes a coinsurance rate of 15% for low-cost regions, 45% for mid-cost regions, and 80% for high-cost regions.
  • Phase 2: Transition Georgia from the Federally Facilitated Marketplace (FFM) to the Georgia Access Model for plan year 2023. Under this model, consumers will enroll in coverage through private web brokers or directly with insurance carriers. All individual health plans, including Qualified Health Plans (QHPs) and non-QHPs that will offer a more limited set of benefits will be available for purchase. The state will conduct eligibility determinations for advanced premium tax credits (APTCs), using the Georgia Gateway platform, which is used for Medicaid, SNAP, and other social service programs. APTCs will continue to only be available to consumers who enroll in QHPs.
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.

  • Require participating insurers to offer a single, standard health plan in the ACA-compliant market with an actuarial value of 68%-72% and a deductible of $7,350/individual and $14,700/family
  • Provide flat premium credits based only on income and age in lieu of ACA premium tax credits, and provide premium credits to eligible consumers with income above 400% of poverty who purchase the standard plan.
  • Continue to provide cost sharing subsidies for individuals with incomes up to 200% FPL by increasing the actuarial value (AV) of the standard plan to 94% for those with income 133%-150% FPL and 83% for those 150%-200% FPL; eliminate cost sharing subsidies for those with incomes 200%-250% FPL
  • Create an alternative process for applying for premium credits and enrolling in coverage.
  • Use federal pass though funding to establish a reinsurance program to reimburse insurers for 85% of claims between $100,000 and $3 million, and 100% of claims above $3 million
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

Topics

Tags

KFF Headquarters: 185 Berry St., Suite 2000, San Francisco, CA 94107 | Phone 650-854-9400
Washington Offices and Barbara Jordan Conference Center: 1330 G Street, NW, Washington, DC 20005 | Phone 202-347-5270

www.kff.org | Email Alerts: kff.org/email | facebook.com/KFF | twitter.com/kff

The independent source for health policy research, polling, and news, KFF is a nonprofit organization based in San Francisco, California.