State Innovation Waivers: Frequently Asked Questions

February 8, 2017 – January 29, 2021 R44760

State Innovation Waivers:
January 29, 2021
Frequently Asked Questions
Ryan J. Rosso
Section 1332 of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as
Analyst in Health Care
amended) provides states with the option to waive specified requirements of the ACA.
Financing
In the absence of these requirements, a state is to implement its own plan to provide

health insurance coverage to state residents that meets the ACA’s terms.

Under a state innovation waiver, a state can apply to waive ACA requirements related to
qualified health plans, health insurance exchanges, premium tax credits, cost-sharing subsidies, the individual
mandate, and the employer mandate. The state can apply to waive any or al of these requirements, in part or in
their entirety.
To obtain approval for a waiver application, a state must show that the plan it wil implement in the absence of the
waived provision(s) meets certain requirements. Under current guidance, the state’s plan must ensure that a
comparable number of state residents have health insurance coverage under the plan as would have had coverage
absent the waiver. It also must provide a comparable number of residents with the opportunity to purchase
coverage that is as affordable and comprehensive as would have been available absent the waiver. However,
applications do not need to demonstrate that the comparable number of residents would be enrolled in the
affordable and comprehensive coverage, as would have been required under previous guidance. Final y, the state’s
plan cannot increase the federal deficit.
The Secretary of the Department of Health and Human Services (HHS) and the Secretary of the Treasury share
responsibility for reviewing state innovation waiver applications and deciding whether to approve applications.
State innovation waivers cannot extend longer than five years, unless a state requests continuation and the
appropriate Secretary does not deny such request. The earliest a state innovation waiver could have gone into
effect was January 1, 2017.
In October 2018, the Centers for Medicare & Medicaid Services (CMS) released updated guidance regarding the
state innovation waiver process that superseded previously issued CMS guidance from December 2015. In
general, the updated guidance attempts to make it easier for a state plan to be approved. The updated guidance
applies to al waiver applications that had not been approved prior to the date of the guidance’s release. Waivers
approved under the previously issued guidance did not require reconsideration.
As of the date of this report, 16 states—Alaska, Colorado, Delaware, Georgia, Hawai , Maine, Maryland,
Minnesota, Montana, New Hampshire, New Jersey, North Dakota, Oregon, Pennsylvania, Rhode Island, and
Wisconsin—have approved state innovation waivers. Eight of these waivers were considered and approved under
the initial state innovation waiver guidance, and eight were considered and approved under the current state
innovation waiver guidance. Fifteen of the 16 approved waivers implement a variant of a statewide individual
market reinsurance program.
Idaho, Massachuset s, Ohio, and Vermont have submitted applications and received notification that their
applications were incomplete. It does not appear that any of these states has modified its application in response to
the notification (as of the date of this report). If these states take action, any further review of their waiver
application would be under the updated state innovation waiver guidance. Three states—California, Iowa, and
Oklahoma—submitted waiver applications and have since withdrawn their applications.
Congressional Research Service

State Innovation Waivers: Frequently Asked Questions

ection 1332 of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as
amended) al ows states to apply for waivers of specified provisions of the ACA. Under a
S state innovation waiver, a state is expected to implement a plan (in place of the waived
provisions) that meets certain minimum requirements. The Centers for Medicare & Medicaid
Services’ (CMS’s) initial interpretation of these requirements was published in guidance released
in 2015 but has since been superseded, as with other aspects of the waiver process, in updated
guidance released by the agency on October 24, 2018.1 Many aspects of the 2018 guidance were
codified in a final rule issued on January 19, 2021.2
Under current guidance, the state’s plan must ensure that a comparable number of state residents
have health insurance coverage under the plan as would have had coverage absent the waiver. It
also must provide a comparable number of residents with the opportunity to purchase coverage
that is as affordable and comprehensive as would have been available absent the waiver.
However, applications do not need to demonstrate that the comparable number of residents would
be enrolled in the affordable and comprehensive coverage, as would have been required under
previous guidance. Final y, the state’s plan cannot increase the federal deficit.
This report answers frequently asked questions about how states can use and apply for state
innovation waivers. It also addresses changes to the Section 1332 waiver process, as made by the
2018 CMS guidance. Final y, it summarizes states’ submitted waiver applications.
Which ACA Provisions May a State Waive Under a
State Innovation Waiver?
A state may apply to waive any or all of the ACA provisions listed below for plan years
beginning on or after January 1, 2017.3
 Part I of Subtitle D of the ACA: Part I of Subtitle D comprises Sections 1301-
1304. In general, the provisions in Part I relate to the establishment of qualified
health plans (QHPs).4
 Part II of Subtitle D of the ACA: Part II of Subtitle D comprises Sections 1311-
1313, which largely include provisions related to the establishment of health
insurance exchanges and related activities.

1 T he requirements are not specified in regulations. Department of the T reasury, Department of Health and Human
Services (HHS), “Waivers for State Innovation,” 80 Federal Register 78131, December 16, 2015. Department of the
T reasury, HHS, “State Relief and Empowerment Waivers,” 83 Federal Register 53575, October 24, 2018 (Hereinafter
“State Relief and Empowerment Waivers guidance”).
2 “Patient Protection and Affordable Care Act; HHS Notice of Benefit and P ayment Parameters for 2022; Updates to
State Innovation Waiver (Section 1332 Waiver) Implementing Regulations,” 86 Federal Register 6138, January 19,
2021. However, this rule did not take effect before the presidential transition. As a result, it may be re viewed by the
Biden Administration in accordance with a memorandum issued by Ronald A. Klain, Assistant to the President and
Chief of Staff. Office of Management and Budget, “Memorandum for the Heads of Executive Departments and
Agencies,” 86 Federal Register 7424, January 28, 2021.
3 42 U.S.C. §18052(a)(2).
4 A qualified health plan (QHP) is a plan that meets certain requirements and is certified to be sold through a health
insurance exchange (in the non-group or small-group market). Although QHPs are cert ified to be sold through
exchanges, they also can be sold in the non -group or small-group market outside of exchanges. For more information,
see CRS Report R44065, Overview of Health Insurance Exchanges.
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State Innovation Waivers: Frequently Asked Questions

 Section 1402 of the ACA: This section includes the provision of cost-sharing
reductions to eligible individuals who purchase individual market coverage
through a health insurance exchange.5
 Section 36B of the Internal Revenue Code (IRC): This section includes the
provision of premium tax credits to eligible individuals who purchase individual
market coverage through a health insurance exchange.
 Section 4980H of the IRC: This section includes the shared responsibility
requirement for large employers (often cal ed the employer mandate).6
 Section 5000A of the IRC: This section includes the requirement for individuals
to maintain health insurance coverage (often cal ed the individual mandate).7
Each part noted above is comprised of many provisions, which makes the scope of the provisions
that can be waived under a state innovation waiver quite broad. For example, Part I of Subtitle D
of the ACA includes provisions that outline requirements for health plans to be certified as QHPs.
It defines the essential health benefits (EHB) package that each QHP must offer, places
limitations on the enrollee cost sharing that QHPs may impose, and requires that QHPs provide
coverage meeting a minimum level of actuarial value.8 Additional y, Part I of Subtitle D
establishes requirements for catastrophic health plans and determines eligibility for such plans.
Which Federal Agencies Have the Authority to
Grant a Waiver?
The Secretary of the Department of Health and Human Services (HHS) is to review and grant
waiver requests for provisions not included in the IRC; the Secretary of the Treasury is to review
and grant requests to waive provisions in the IRC (the availability of premium tax credits and the
application of the employer and individual mandates).9
What Are the Minimum Requirements for a
Successful Application?
The Secretary of HHS or the Treasury is to assess a waiver application to determine whether the
state’s plan meets the requirements related to coverage, affordability, comprehensiveness, and

5 For more information about the current status of the cost-sharing reductions, see archived CRS Insight IN10786,
Paym ents for Affordable Care Act (ACA) Cost-Sharing Reductions.
6 For more information about the employer mandate, see CRS Report R45455, The Affordable Care Act’s (ACA’s)
Em ployer Shared Responsibility Provisions (ESRP).
7 For more information about the individual mandate, see CRS Report R44438, The Individual Mandate for Health
Insurance Coverage: In Brief. T he 2017 tax revision, P.L. 115-97, effectively eliminated the individual mandate
penalty beginning in 2019. However, the 2017 tax revision did not make any other substantive changes to the statutory
language establishing the mandate and its associated penalty.
8 Note that essential health benefit (EHB) and related cost-sharing and actuarial value requirements apply to all non-
grandfathered plans in the individual and small group markets, including QHPs. For more information about the
essential health benefits package, see CRS Report R44163, The Patient Protection and Affordable Care Act’s Essential
Health Benefits (EHB).
9 42 U.S.C. §18052(a)(6).
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federal-deficit neutrality outlined in statute and further described in guidance.10 These
requirements are described in Table 1. The Secretary or Secretaries (as appropriate) may grant a
request for a state innovation waiver if a state’s application meets the requirements. In making
this determination, the Secretaries wil “consider favorably” any waiver that incorporates some or
al of the following principles: provide increased access to affordable private market coverage,
encourage sustainable spending growth, foster state innovation, support and empower those in
need, and promote consumer-driven health care.11
In guidance, HHS and the Treasury note that their assessment of a state’s waiver application
considers changes to the state’s health care system that are contingent only upon approval of the
waiver.12 Their assessment does not consider policy changes that are dependent on further state
action or other federal determinations. For example, the Secretary’s or Secretaries’ (as
appropriate) assessment of a state innovation waiver application would not consider changes to
Medicaid or the state Children’s Health Insurance Program (CHIP) that require approval outside
of the state innovation waiver process, and savings accrued as a result of changes to Medicaid or
CHIP would not be considered when determining whether the state innovation waiver meets the
deficit-neutrality requirement. HHS and the Treasury indicate that this is the case regardless of
whether a state’s application for a state innovation waiver is submitted alone or in coordination
with another waiver application. (For more information about the coordinated waiver process, see
“May States Submit State Innovation Waiver Applications in Coordination with Other Federal
Waiver Applications?”)
Table 1. Requirements for a Successful State Innovation Waiver Application
(as described in statute and guidance)
Statute
Current Guidancea
Previous Guidance
Coverage: The state’s
At least a comparable number of
At least as many individuals who are
plan must provide
individuals who are forecasted to have
forecasted to have minimum essential
coverage to at least a
health care coverage absent a waiver must
coverage (MEC) absent a waiver must
comparable number of
have health care coverage under the
have MEC under the waiver.c This
individuals as the
waiver.b This requirement general y must
requirement general y must be forecast to
provisions of Title I of
be forecast to be met for each year the
be met for each year the waiver is in
the Patient Protection
waiver is in effect, but a waiver may be
effect.
and Affordable Care
approved if a temporary reduction in
In considering whether this requirement
Act (ACA; P.L. 111-
coverage would produce longer-term
is met, the plan’s impact on al state
148, as amended)
increases in coverage.
residents, regardless of coverage type, wil
would provide.
In considering whether this requirement
be considered and the plan’s effects on
is met, the plan’s impact on al state
different groups of individuals in the state,
residents, regardless of coverage type, wil
particularly those considered vulnerable,
be considered. Whether the plan
wil be assessed.d A state plan that
sufficiently prevents gaps in or
satisfied this requirement in the aggregate
discontinuations of coverage also wil be
but reduced coverage for vulnerable
considered.
populations would not be approved.
Whether the plan sufficiently prevents
gaps in or discontinuations of coverage
also wil be considered.

10 42 U.S.C. §18052(b)(1) and State Relief and Empowerment Waivers guidance.
11 State Relief and Empowerment Waivers guidance.
12 State Relief and Empowerment Waivers guidance.
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Statute
Current Guidancea
Previous Guidance
Affordability: The
Individuals must be provided with the
Individuals’ health care coverage under
state’s plan must
opportunity to purchase coverage that is
the waiver must be as affordable as
provide coverage and
at least as affordable and comprehensive
coverage would be absent the waiver.
cost-sharing
as coverage available absent the waiver.e
Affordability is general y measured by
protections that are at
Applications do not need to demonstrate
comparing the sum of an individual’s
least as affordable as
that the affordable and comprehensive
premium contributions and cost-sharing
the provisions of Title I
coverage wil actual y be received by a
responsibilities for a health plan to the
of the ACA.
comparable number of state residents.
individual’s income. Spending on health
Affordability is general y measured by
care services that are not covered by a
comparing the sum of an individual’s
health plan may be considered if the
premium contributions and cost-sharing
services are affected by the state’s plan.
responsibilities for a health plan or direct
This requirement general y must be
payments for health care to the
forecast to be met for each year the
individual’s income.
waiver is in effect.
In considering whether this requirement
In considering whether this requirement
is met, the plan’s impact on al state
is met, the plan’s impact on al state
residents, regardless of coverage type,
residents, regardless of coverage type, wil
and the plan’s effects on al groups of
be considered, and the plan’s effects on
individuals in the state, including low-
different groups of individuals in the state,
income residents and those with high
particularly those considered vulnerable,
expected health care costs, wil be
wil be assessed.d A state plan that
considered. In assessing the plan, access
satisfied this requirement in the aggregate
to affordable coverage wil be considered
but reduced affordability for vulnerable
according to the number of individuals for
populations would not be approved. In
whom available coverage has become
assessing the plan, the affordability of
more affordable and the magnitude of
coverage on average wil be considered,
such changes.
and how the plan affects the number of
individuals who have large heath care
spending burdens relative to their
incomes wil be examined.
Comprehensiveness:
Individuals must be provided with the
Individuals’ health care coverage under
The state’s plan must
opportunity to purchase coverage that is
the waiver must be at least as
provide coverage that
at least as affordable and comprehensive
comprehensive overal as their coverage
is at least as
as coverage available absent the waiver.e
would be absent the waiver.
comprehensive as the
Applications do not need to demonstrate
Comprehensiveness is measured by
essential health benefits
that the affordable and comprehensive
comparing coverage under the plan to
(EHB),f as certified by
coverage wil actual y be received by a
coverage under the state’s EHB
the Office of the
comparable number of state residents.
benchmark plan or coverage under the
Actuary of the Centers
Comprehensiveness is measured by
state’s Medicaid program and/or the State
for Medicare &
comparing coverage under the plan to
Children’s Health Insurance Programs
Medicaid Services
coverage under the state’s EHB
(CHIP), as appropriate. This requirement
(CMS).
benchmark plan, any other state’s
general y must be forecast to be met for
benchmark plan chosen by the state, or
each year the waiver is in effect.
any benchmark plan chosen by the state
In considering whether this requirement
that could potential y become its EHB
is met, the proposal’s impact on al state
benchmark plan.
residents, regardless of coverage type, wil
In considering whether this requirement
be considered, and the effects of the
is met, the proposal’s impact on al state
proposal on different groups of individuals
residents, regardless of coverage type, wil
in the state, particularly those considered
be considered.
vulnerable, wil be assessed.d A state plan
that satisfied this requirement in the
aggregate but reduced comprehensiveness
for vulnerable populations would not be
approved.
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Statute
Current Guidancea
Previous Guidance
Deficit Neutral: The
Projected federal spending net of federal
Projected federal spending net of federal
state’s plan must not
revenues must be equal to or lower than
revenues must be equal to or lower than
increase the federal
it would be absent the waiver. The state’s
it would be absent the waiver. The state’s
deficit.
plan must not increase the federal deficit
plan must not increase the federal deficit
over the period of the waiver or in total
over the period of the waiver or in total
over the 10-year budget plan submitted
over the 10-year budget plan submitted
by the state as part of its application.g
by the state as part of its application.g
Source: Congressional Research Service’s compilation and summary of statute (42 U.S.C. §18052(b)(1)) and
guidance (80 Federal Register 78131, December 16, 2015, and 83 Federal Register 53575, October 24, 2018). The
requirements are not covered in regulations.
Notes: Previous guidance applies to al waivers approved prior to October 24, 2018. The Secretary of the
Department of Health and Human Services (HHS) is to review requests to waive provisions not included in the
Internal Revenue Code (IRC); the Secretary of the Treasury is to review requests to waive p rovisions in the IRC
(the availability of premium tax credits and the application of the employer and individual mandates).
a. Many aspects of the current guidance were codified in a final rule issued on January 19, 2021. This rule did
not take effect before the presidential transition. As a result, it may be reviewed by the Biden
Administration in accordance with a memorandum issued by Ronald A. Klain, Assistant to the President and
Chief of Staff. See “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment
Parameters for 2022; Updates to State Innovation Waiver (Section 1332 Waiver) Implementing
Regulations,” 86 Federal Register 6138, January 19, 2021 and Office of Management and Budget,
“Memorandum for the Heads of Executive Departments and Agencies,” 86 Federal Register 7424, January 28,
2021.
b. Health care coverage includes al types of coverage that would qualify as MEC or would be included in the
definition of the term health insurance coverage in regulations. MEC, as defined in the tax code (26 U.S.C.
§5000A(f)), includes most types of comprehensive coverage, including public coverage, such as coverage
under programs sponsored by the federal government (e.g., Medicaid, Medicare), as wel as private
insurance (e.g., employer-sponsored insurance, non-group coverage). Health insurance coverage, as defined
in regulations (45 C.F.R. §144.103), includes group health insurance coverage (e.g., employer-sponsored
insurance, association health plans), individual health insurance coverage, and short-term, limited-duration
insurance.
c. MEC is defined in the tax code (26 U.S.C. §5000A(f)) and includes most types of comprehensive coverage,
including public coverage, such as coverage under programs sponsored by the federal government (e.g.,
Medicaid, Medicare), as wel as private insurance (e.g., employer-sponsored insurance, non-group coverage).
d. Vulnerable individuals include “low-income individuals, elderly individuals, and those with serious health
issues or who have a greater risk of developing serious health issues” (80 Federal Register 78131, December
16, 2015, p. 78132).
e. The affordability and comprehensiveness guardrails are considered in conjunction and not in isolation (i.e., a
state plan must make coverage that is both comprehensive and affordable available to a comparable number
of individuals).
f.
Under the ACA, certain health plans must cover the EHB. The ACA does not explicitly define th e EHB;
rather, it lists 10 broad categories from which benefits and services must be included and requires the
Secretary of HHS to further define the EHB. For information about the 10 categories as wel as how the
EHB are currently defined, see the Center for Consumer Information and Insurance Oversight (CCIIO)
webpage, “Information on Essential Health Benefits (EHB) Benchmark Plans,” at https://www.cms.gov/cci o/
resources/data-resources/ehb.
g. The state innovation waivers cannot extend longer than five years unless a state requests continuation and
such request is not denied by the appropriate Secretary. Statute requires that an application for a waiver
include a 10-year budget plan that is budget neutral for the federal government (42 U.S.C.
§18052(a)(1)(B)(i )). This determination takes into account costs associated with changes to federal
administrative processes.
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State Innovation Waivers: Frequently Asked Questions

May a State Modify Its Use of the Federally
Facilitated Health Insurance Exchange Platform
Under a State Innovation Waiver?
HHS administers al federal y facilitated exchanges (FFEs), and it operates the same information
technology platform (Healthcare.gov) in each state that has an FFE. Some states administer their
own state-based exchanges, except they also use the federal information technology platform
(SBE-FP).13
Initial y, it was not possible for states that use the federal technology platform to make eligibility
and enrollment changes related to that platform.14 However, HHS and the Treasury indicated in
the updated guidance released in October 2018 that technical enhancements made it feasible for
CMS to support certain variations. For example, waivers that would require a state to create its
own website to replace the consumer-facing aspects of HealthCare.gov can incorporate CMS’s
enrollment functionalities (e.g., account creation, application, enrollment and coverage
maintenance experience for consumers). States are asked to work with HHS early in the waiver
application process to determine whether specific modifications can be accommodated.
States are responsible for funding al FFE platform modifications and associated operational
support. Any changes to CMS administrative processes are taken into account when determining
whether a waiver application satisfies the deficit neutrality requirement; however, waiver costs
for technical and specialized services that CMS typical y provides to states (and states cover the
cost of) would not be included in such determinations.15
Are There Any Limitations on the Scope of State
Innovation Waivers?
In guidance issued in October 2018, HHS and the Treasury described some federal operational
considerations that may limit the scope of the waivers.16 Specifical y, the Internal Revenue
Service (IRS) general y is not able to accommodate any state-specific changes to tax rules.
However, the IRS may be able to accommodate smal changes to the administration of federal tax
provisions, in particular when such changes overlap with the IRS’s current capabilities.17 For
example, waivers that would require the IRS to expand premium tax credit eligibility to
individuals with household income under 100% of the federal poverty level may be feasible,
because it incorporates a similar special rule that the IRS currently administers.18

13 For more information about exchange types, see CRS Report R44065, Overview of Health Insurance Exchanges.
14 State Relief and Empowerment Waivers guidance.
15 Specifically, the Centers for Medicare & Medicaid Services (CMS) services covered under the Intergovernmental
Cooperation Act (ICA) are not considered for deficit neutrality purposes.
16 State Relief and Empowerment Waivers guidance.
17 States are responsible for funding all changes to IRS administrative processes associated with waiver implementation.
T hese costs are incorporated into the assessment of whether a waiver application satisfies the deficit neutrality
requirement.
18 For more information about how household income is calculated to determine premium tax credit eligibility, see CRS
Report R43861, The Use of Modified Adjusted Gross Incom e (MAGI) in Federal Health Program s.
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State Innovation Waivers: Frequently Asked Questions

What Is the Application Process for a State
Innovation Waiver?
A state seeking a state innovation waiver must enact a law that al ows the state to carry out the
actions under the waiver prior to submitting an application for a waiver.19 In certain
circumstances, a state can be considered to have enacted such a law by coupling a state law that
enforces ACA provisions and/or the state plan with administrative or executive actions.20 Prior to
submitting an application, a state must provide a public notice and comment period and conduct
public hearings regarding the state’s application.21 Upon conclusion of these activities, a state
may submit its application to the Secretary of HHS. The Secretary of HHS is to transmit any
application seeking to waive requirements in the IRC to the Secretary of the Treasury for review.
The Secretary or Secretaries (as appropriate) are to review a state’s application to determine
whether it is complete. A state’s application is not considered complete unless it includes the
materials identified in regulations.22 The materials include, but are not limited to, information
about the enacted state legislation al owing the state to carry out the actions under the waiver, a
description of the plan or program the state expects to implement in place of the waived
provisions, and analyses showing that the state’s plan or program meets the requirements for
granting a waiver. If a state’s application is not complete, the state is to be notified about the
missing elements and given an opportunity to submit them. Once the Secretary or Secretaries (as
appropriate) make a preliminary determination that a state’s application is complete, the entire
application is to be made available to the public for review and comment.23
The final decision of the Secretary or Secretaries on a state’s application must be issued no later
than 180 days after the determination that the Secretary of HHS received a complete application
from a state.24

19 42 U.S.C. §18052(b)(2).
20 State Relief and Empowerment Waivers guidance.
21 T he public notice and comment period is to be “sufficient to ensure a meaningful level of public input for the
application for a section 1332 waiver.” In general, the comment period cannot be less than 30 days. However, in light
of the Coronavirus Disease 2019 (COVID-19) pandemic, HHS and the T reasury provided states submitting a waiver
application during the COVID-19 public health emergency period with the ability to request m odification of the public
notice and comment procedures and requirements (e.g., the requirement that states conduct in -person public hearings).
T he Secretaries may grant such requests if a delay of the proposed waiver would undermine the waiver request and if
the state satisfies certain requirements. 45 C.F.R. §§ 155.1312 and 155.1318. HHS, Department of the T reasury, and
Department of Labor, “Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health
Emergency,” 85 Federal Register 71142, November 2, 2020.
22 45 C.F.R. §155.1308(f).
23 T he public notice and comment period is to be “sufficient to ensure a meaningful level of public input and does not
impose requirements that are in addition to, or duplicative of, requirements imposed under the Administrative
Procedures Act, or requirements that are unreasonable to unnecessarily burdensome with respect to state compliance.”
45 C.F.R. §155.1316(b).
24 42 U.S.C. §18052(d)(1) and 45 C.F.R. §155.1316(c).
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Is Any Federal Funding Available Under a State
Innovation Waiver?
It is possible for a state to receive federal funding under an approved waiver. A state’s receipt of a
state innovation waiver could result in the residents of the state not receiving the “premium tax
credits, cost-sharing reductions, or smal business credits under sections 36B of the Internal
Revenue Code of 1986 or under part I of subtitle E for which they would otherwise be eligible.”25
If this occurs, the state is to receive the aggregate amount of subsidies that would have been
available to the state’s residents had the state not received a state innovation waiver—this is
referred to as pass-through funding. The amount of pass-through funding is to be determined
annual y by the appropriate Secretary and may be updated at any time to account for changes in
state or federal law. The state is to use the pass-through funding for purposes of implementing the
plan or program established under the waiver.26
How Long Can a State Innovation Waiver Be
in Effect?
State innovation waivers cannot extend longer than five years, unless a state requests continuation
and the appropriate Secretary does not deny such request.27 Requests for continuation are to be
deemed granted unless, within 90 days of submission, the appropriate Secretary either denies the
request or informs the state that additional information is needed for the Secretary to consider
such request.
May States Submit State Innovation Waiver
Applications in Coordination with Other Federal
Waiver Applications?
The Secretaries were required to develop a process for coordinating applications for state
innovation waivers and applications for other existing waivers under federal law relating to the
provision of health care, including waivers available under Medicare, Medicaid, and CHIP.
Under the coordinated process, a state must be able to submit a single application for a state
innovation waiver and any other applicable waivers available under federal law.28 The single
application must comply with the procedures described for state innovation waiver applications
and the procedures in any other applicable federal law under which the state seeks a waiver.29
As discussed in the answer to the question “What Are the Minimum Requirements for a
Successful Application?,” HHS and the Treasury have indicated that an application for a state
innovation waiver wil be assessed on its own terms and that assessment of the state innovation

25 42 U.S.C. §18052(a)(3).
26 42 U.S.C. §18052(a)(3).
27 42 U.S.C. §18052(e).
28 42 U.S.C. §18052(a)(5).
29 45 C.F.R. §155.1302(a).
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waiver wil not consider the impact of changes that require separate federal approval. This is the
case even if the state submits a single application for multiple waivers.
How Many States Have Applied for State
Innovation Waivers?
As of the date of this report, 23 states have submitted applications for state innovation waivers—
Alaska, California, Colorado, Delaware, Georgia, Hawai , Idaho, Iowa, Maine, Maryland,
Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, North Dakota, Ohio,
Oklahoma, Oregon, Pennsylvania, Rhode Island, Vermont, and Wisconsin.30 HHS and the
Treasury have approved 16 applications, from Alaska, Colorado, Delaware, Georgia, Hawai ,
Maine, Maryland, Minnesota, Montana, New Hampshire, New Jersey, North Dakota, Oregon,
Pennsylvania, Rhode Island, and Wisconsin.
Eight of these waivers were considered and approved under the initial state innovation waiver
guidance, and eight were considered and approved under the current state innovation waiver
guidance. Fifteen of the 16 approved waivers implement a variant of a statewide individual
market reinsurance program.31
Idaho, Massachuset s, Ohio, and Vermont received notification from HHS and the Treasury that
their applications were incomplete, and it does not appear that any of these states has modified its
application in response to the notification. If one of these four states does take action, any review
of its waiver application would be under the updated state innovation waiver guidance (even if
such state initial y submitted its waiver under the initial guidance).
California, Iowa, and Oklahoma have withdrawn their applications.32
See Table 2 for more details.

30 For information about each state’s application, see CMS, Center for Consumer Information and Insurance Oversight
(CCIIO), “Section 1332: State Innovation Waivers,” at https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-
Innovation-Waivers/Section_1332_State_Innovation_Waivers-.html.
31 CMS issued a data brief that compares various aspects of the state-based reinsurance programs implemented through
the Section 1332 waiver process. See CMS, CCIIO, State Relief and Em powerm ent Waivers: State-based Reinsurance
Program s, June 2020, https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/
1332-Data-Brief-June2020.pdf. As described in Table 2, Georgia’s waiver included two parts: a reinsurance program
and the Georgia Access Model. For more information on reinsurance, see CRS In Focus IF10707, Reinsurance in
Health Insurance.
32 T o read the withdrawal letters, see CMS, CCIIO, “Section 1332: State Innovation Waivers,” at https://www.cms.gov/
CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Section_1332_State_Innovation_Waivers-.html.
Congressional Research Service

9

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Table 2. States That Have Applied for State Innovation Waivers
(as of January 29, 2021)
Application Information
Waiver Information
Estimated
Pass-Through
Effective
State
Submitted
Status
Overview
Fundinga
Period
Approved Waivers
Alaska
Jan. 3, 2017
Approved—
Alaska established a state-based reinsurance program, the Alaska Reinsurance Program (ARP), The Centers for
CY2018-
July 17, 2017
to help health insurance issuers offering plans in the individual market offset the cost of
Medicare & Medicaid CY2022
covering enrol ees with 1 or more of 33 specified high-cost conditions.
Services (CMS)
Under the approved waiver, the Patient Protection and Affordable Care Act (ACA; P.L. 111-
indicated Alaska
148) provision requiring issuers to consider al enrol ees in individual plans offered by the
would receive $58.5
issuer to be members of a single risk pool is waived,b to the extent the provision prohibits
mil ion for CY2018,
issuers from including expected reinsurance payments from the ARP when establishing
$68.7 mil ion for
market-wide index rates.
CY2019, and $76.7
mil ion for CY2020.
The expected effect of al owing issuers to consider the ARP payments when setting market-
wide rates is to reduce premiums in the individual market, and the expected effect of the
reduced premiums is reduced federal spending on premium tax credits for residents of Alaska.
The state is to receive the resulting reductions in federal spending as pass-through funding.
Under the waiver, Alaska is to use the pass-through funding to support ARP and
corresponding payments to issuers beginning in calendar year (CY) 2018 and continuing
through CY2022.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of Alaska.
CRS-10

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Application Information
Waiver Information
Estimated
Pass-Through
Effective
State
Submitted
Status
Overview
Fundinga
Period
Colorado
May 20, 2019 Approved—
Colorado established a state-based reinsurance program. From CY2020 through CY2021, the CMS indicated
CY2020-
July 31, 2019
program is reimbursing issuers sel ing coverage in the state’s individual market for a
Colorado would
CY2021
percentage of enrol ees’ claims between an attachment point and a cap. The reimbursement
receive $169.4
percentage varies across geographic rating areas in the state.
mil ion for CY2020.
Colorado’s approved waiver is similar to other reinsurance-type waivers in that the ACA
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
be members of a single risk pool is waived,b which al ows issuers to consider Colorado
reinsurance program payments when setting market-wide index rates. The expected effect is
that individual market premiums wil decrease and federal spending on premium tax credits
for residents of Colorado wil decrease. The state is to receive the resulting reductions in
federal spending as pass-through funding. Under the waiver, Colorado is to use the pass-
through funding to support the reinsurance program and corresponding payments to issuers
beginning in CY2020 and continuing through CY2021.c
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of Colorado.
Delaware
July 10, 2019
Approved—
Delaware established a state-based reinsurance program, the Delaware Health Insurance
CMS indicated
CY2020-
Aug. 20, 2019
Individual Market Stabilization Reinsurance Program, which reimburses issuers sel ing coverage Delaware would
CY2024
in the state’s individual market for a percentage of enrol ees’ claims between an attachment
receive $21.7 mil ion
point and a cap.
for CY2020.
Delaware’s approved waiver is similar to other reinsurance-type waivers in that the ACA
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
be members of a single risk pool is waived,b which al ows issuers to consider Delaware
reinsurance program payments when setting market-wide index rates. The expected effect is
that individual market premiums wil decrease and federal spending on premium tax credits
for residents of Delaware wil decrease. The state is to receive the resulting reductions in
federal spending as pass-through funding. Under the waiver, Delaware is to use the pass-
through funding to support the reinsurance program and corresponding payments to issuers
beginning in CY2020 and continuing through CY2024.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of Delaware.
CRS-11

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Application Information
Waiver Information
Estimated
Pass-Through
Effective
State
Submitted
Status
Overview
Fundinga
Period
Georgia
December
Approved—
Georgia’s approved waiver has two parts: a reinsurance program scheduled to begin in
Georgia estimated it
CY2022-
23, 2019,
Nov. 1, 2020
CY2022 and the Georgia Access Model, which is to begin in CY2023.
would receive $306
CY2026
application
With respect to first part of the waiver, Georgia established a state-based reinsurance
mil ion for CY2022
was updated
program. Starting in 2022, the program is to reimburse issuers sel ing coverage in the state’s
and $1.6 bil ion over
on July 31,
individual market for a percentage of enrol ees’ claims between an attachment point and a cap. the period CY2022-
2020, and
The reimbursement percentage is to vary across geographic rating areas in the state.
CY2026.
modified on
Oct. 9, 2020.
Georgia’s approved waiver is similar to other reinsurance-type waivers in that the ACA
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
be members of a single risk pool is waived,b which al ows issuers to consider Georgia’s
reinsurance program payments when setting market-wide index rates. The expected effect is
that individual market premiums wil decrease and federal spending on premium tax credits
for residents of Georgia wil decrease. The state is to receive the resulting reductions in
federal spending as pass-through funding. Under the waiver, Georgia is to use the pass-
through funding to support the reinsurance program and corresponding payments to issuers
beginning in CY2022 and continuing through CY2026.
With respect to the second part of the waiver, Georgia is shifting its individual market
exchange enrol ment to the Georgia Access Model beginning in CY2023. Under the Georgia
Access Model, residents would no longer be able to enrol in individual market coverage
through the federal y facilitated exchange and would instead only be able to utilize commercial
market web brokers or buy directly from issuers. Residents are stil to be eligible for premium
tax credits while enrol ing in coverage through the Georgia Access Model.
Under the approved waiver, ACA requirements relating to the state establishment of health
insurance exchanges are waived to the extent they are inconsistent with the Georgia Access
Model.d As a result, Georgia is able to implement the Georgia Access Model. Georgia
anticipates web brokers wil be incentivized to bring in new consumers, and, when combined
with other outreach and support, there wil be increased enrol ment in the individual market.
Georgia anticipates the net effect of these new enrol ees wil be an increase in the amount of
premium tax credits received by residents. Georgia requested to reduce the pass-through
funding that would be provided in accordance with the reinsurance program aspect of the
waiver to account for these costs.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of Georgia.
CRS-12

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Application Information
Waiver Information
Estimated
Pass-Through
Effective
State
Submitted
Status
Overview
Fundinga
Period
Hawai
Aug. 10,
Approved—
Under the approved waiver, multiple ACA provisions relating to the establishment and
CMS indicated
CY2017-
2016
Dec. 30, 2016 operation of a Smal Business Health Options Program (SHOP) exchange, as they pertain to
Hawai would
CY2021
smal employers and SHOP exchanges, are waived.e As a result, Hawai is no longer required
receive $428,864 for
to operate SHOP exchanges for smal employers. The amount that smal employers in Hawai
CY2017, $933,130
would have received in smal business tax credits for coverage purchased through a SHOP
for CY2018,
exchange is provided to the state in pass-through funding to support a program that assists
$287,409 for
smal employers with the cost of health insurance coverage.
CY2019, and
$120,361 for
CY2020. CMS
estimated the state
would receive
$64,544 in CY2021.f
Maine
May 9, 2018
Approved—
Maine established a hybrid state-based reinsurance/invisible high-risk pool program
CMS indicated Maine CY2019-
July 30, 2018
administered by the Maine Guaranteed Access Reinsurance Association (MGARA), which
would receive $62.3
CY2023
helps health insurance issuers offering plans in the individual market offset the cost of covering mil ion for CY2019
enrol ees with one or more of eight specified high-cost conditions. Under the waiver, health
and $26.3 mil ion for
insurance issuers offering plans in the individual market also have the discretion to include
CY2020.
additional enrol ees in the program if such determinations are made during the first 60 days of
an enrol ee’s plan year.
Maine’s approved waiver is similar to other reinsurance-type waivers in that the ACA
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
be members of a single risk pool is waived,b which al ows issuers to consider MGARA
payments when setting market-wide index rates. The expected effect is that individual market
premiums wil decrease and federal spending on premium tax credits for residents of Maine
wil decrease. The state is to receive the resulting reductions in federal spending as pass-
through funding. Under the approved waiver, Maine is to use the pass-through funding to
support MGARA and corresponding payments to issuers beginning in CY2019 and continuing
through CY2023.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of Maine.
CRS-13

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Application Information
Waiver Information
Estimated
Pass-Through
Effective
State
Submitted
Status
Overview
Fundinga
Period
Maryland
May 31, 2018 Approved—
Maryland established a state-based reinsurance program administered by the Maryland Health
CMS indicated
CY2019-
Aug. 22, 2018
Benefit Exchange, which reimburses issuers sel ing coverage in the state’s individual market for Maryland would
CY2023h
a percentage of enrol ees’ claims between an attachment point and a cap.
receive $373.4
Maryland’s approved waiver is similar to other reinsurance-type waivers in that the ACA
mil ion for CY2019
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
and $447.3 mil ion
be members of a single risk pool is waived,b which al ows issuers to consider the state’s
for CY2020.
reinsurance program payments when setting market-wide index rates. The expected effect is
that individual market premiums wil decrease and federal spending on premium tax credits
for residents of Maryland wil decrease. The state requested to receive a portion of the
resulting reductions in federal spending as pass-through funding. Under the waiver, Maryland
is to use the pass-through funding to support the reinsurance program and corresponding
payments to issuers beginning in CY2019 and continuing through CY2021, unless additional
funds become available.h
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of Maryland.
Minnesota
May 30, 2017 Approvedi—
Minnesota established a state-based reinsurance program, the Minnesota Premium Security
CMS indicated
CY2018-
Sept. 22, 2017 Plan (MSPS), which reimburses issuers sel ing coverage in the state’s individual market for a
Minnesota would
CY2022
percentage of enrol ees’ claims between an attachment point and a cap.
receive $130.7
Minnesota’s approved waiver is similar to other reinsurance-type waivers in that the ACA
mil ion for CY2018,
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
$84.8 mil ion for
be members of a single risk pool is waived,b which al ows issuers to consider MSPS payments
CY2019, and $86.1
when setting market-wide index rates. The expected effect is that individual market premiums mil ion for CY2020.
wil decrease and federal spending on premium tax credits for residents of Minnesota wil
decrease. The state is to receive the resulting reductions in federal spending as pass-through
funding. Under the waiver, Minnesota is to use the pass-through funding to support MSPS and
corresponding payments to issuers beginning in CY2018 and continuing through CY2022.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of Minnesota.
CRS-14

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Application Information
Waiver Information
Estimated
Pass-Through
Effective
State
Submitted
Status
Overview
Fundinga
Period
Montana
June 19, 2019 Approved—
Montana established a state-based reinsurance program, the Montana Reinsurance Program,
CMS indicated
CY2020-
Aug. 16, 2019
which reimburses issuers sel ing coverage in the state’s individual market for a percentage of
Montana would
CY2024
enrol ees’ claims between an attachment point and a cap.
receive $22.5 mil ion
Montana’s approved waiver is similar to other reinsurance-type waivers in that the ACA
for CY2020.
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
be members of a single risk pool is waived,b which al ows issuers to consider Montana
reinsurance program payments when setting market-wide index rates. The expected effect is
that individual market premiums wil decrease and federal spending on premium tax credits
for residents of Montana wil decrease. The state is to receive the resulting reductions in
federal spending as pass-through funding. Under the waiver, Montana is to use the pass-
through funding to support the reinsurance program and corresponding payments to issuers
beginning in CY2020 and continuing through CY2024.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of Montana.
New
Apr. 23,
Approved—
New Hampshire established a state-based reinsurance program, which reimburses issuers
New Hampshire
CY2021-
Hampshire
2020
Aug. 5, 2020
sel ing coverage in the state’s individual market for a percentage of enrol ees’ claims between
estimated it would
CY2025
an attachment point and a cap.
receive $32.9 mil ion
New Hampshire’s approved waiver is similar to other reinsurance-type waivers in that the
for CY2021 and
ACA provision requiring issuers to consider al enrol ees in individual plans offered by the
$180.9 mil ion over
issuer to be members of a single risk pool is waived,b which al ows issuers to consider
the period CY2021-
reinsurance program payments when setting market-wide index rates. The expected effect is
CY2025.
that individual market premiums wil decrease and federal spending on premium tax credits
for residents of New Hampshire wil decrease. The state is to receive the resulting reductions
in federal spending as pass-through funding. Under the waiver, New Hampshire is to use the
pass-through funding to support the reinsurance program and corresponding payments to
issuers beginning in CY2021 and continuing through CY2025.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of New Hampshire.
CRS-15

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Application Information
Waiver Information
Estimated
Pass-Through
Effective
State
Submitted
Status
Overview
Fundinga
Period
New Jersey
July 2, 2018
Approved—
New Jersey established a state-based reinsurance program, the Health Insurance Premium
CMS indicated New
CY2019-
Aug. 16, 2018
Security Plan, which reimburses issuers sel ing coverage in the state’s individual market for a
Jersey would receive
CY2023
percentage of enrol ees’ claims between an attachment point and a cap.
$180.2 mil ion for
New Jersey’s approved waiver is similar to other reinsurance-type waivers in that the ACA
CY2019 and $190.0
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
mil ion for CY2020.
be members of a single risk pool is waived,b which al ows issuers to consider the state’s
reinsurance program payments when setting market-wide index rates. The expected effect is
that individual market premiums wil decrease and federal spending on premium tax credits
for residents of New Jersey wil decrease. The state is to receive the resulting reductions in
federal spending as pass-through funding. Under the waiver, New Jersey is to use the pass-
through funding to support the reinsurance program and corresponding payments to issuers
beginning in CY2019 and continuing through CY2023.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of New Jersey.
North Dakota May 10, 2019 Approved—
North Dakota established a state-based reinsurance program, the Reinsurance Association of
CMS indicated
CY2020-
July 31, 2019
North Dakota (RAND), which reimburses issuers sel ing coverage in the state’s individual
North Dakota would CY2024
market for a percentage of enrol ees’ claims between an attachment point and a cap.
receive $21.5 mil ion
North Dakota’s approved waiver is similar to other reinsurance-type waivers in that the ACA for CY2020.
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
be members of a single risk pool is waived,b which al ows issuers to consider RAND payments
when setting market-wide index rates. The expected effect is that individual market premiums
wil decrease and federal spending on premium tax credits for residents of North Dakota wil
decrease. The state is to receive the resulting reductions in federal spending as pass-through
funding. Under the waiver, North Dakota is to use the pass-through funding to support
RAND and corresponding payments to issuers beginning in CY2020 and continuing through
CY2024.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of North Dakota.
CRS-16

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Application Information
Waiver Information
Estimated
Pass-Through
Effective
State
Submitted
Status
Overview
Fundinga
Period
Oregon
Aug. 31,
Approved—
Oregon established a state-based reinsurance program, the Oregon Reinsurance Program
CMS indicated that
CY2018-
2017
Oct. 18, 2017
(ORP), which reimburses issuers sel ing coverage in the state’s individual market for a
Oregon would
CY2022
percentage of enrol ees’ claims between an attachment point and a cap.
receive $54.5 mil ion
Oregon’s approved waiver is similar to other reinsurance-type waivers in that the ACA
for CY2018, $41.8
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
mil ion for CY2019,
be members of a single risk pool is waived,b which al ows issuers to consider ORP payments
and $54.4 mil ion for
when setting market-wide index rates. The expected effect is that individual market premiums CY2020.
wil decrease and federal spending on premium tax credits for residents of Oregon wil
decrease. The state is to receive the resulting reductions in federal spending as pass-through
funding. Under the waiver, Oregon is to use the pass-through funding to support ORP and
corresponding payments to issuers beginning in CY2018 and continuing through CY2022.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of Oregon.
Pennsylvania
Feb. 11, 2020 Approved—
Pennsylvania established a state-based reinsurance program, which reimburses issuers sel ing
Pennsylvania
CY2021-
July 24, 2020
coverage in the state’s individual market for a percentage of enrol ees’ claims between an
estimated it would
CY2025
attachment point and a cap.
receive $95.1 mil ion
Pennsylvania’s approved waiver is similar to other reinsurance-type waivers in that the ACA
for CY2021 and
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
$547.5 mil ion over
be members of a single risk pool is waived,b which al ows issuers to consider reinsurance
the period CY2021-
program payments when setting market-wide index rates. The expected effect is that
CY2025.
individual market premiums wil decrease and federal spending on premium tax credits for
residents of Pennsylvania wil decrease. The state is to receive the resulting reductions in
federal spending as pass-through funding. Under the waiver, Pennsylvania is to use the pass-
through funding to support the reinsurance program and corresponding payments to issuers
beginning in CY2021 and continuing through CY2025.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of Pennsylvania.
CRS-17

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Application Information
Waiver Information
Estimated
Pass-Through
Effective
State
Submitted
Status
Overview
Fundinga
Period
Rhode Island
July 8, 2019
Approved—
Rhode Island established a state-based reinsurance program, the Rhode Island Reinsurance
CMS indicated
CY2020-
Aug. 26, 2019
Program, which reimburses issuers sel ing coverage in the state’s individual market for a
Rhode Island would
CY2024
percentage of enrol ees’ claims between an attachment point and a cap.
receive $5.2 mil ion
Rhode Island’s approved waiver is similar to other reinsurance-type waivers in that the ACA
for CY2020.
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
be members of a single risk pool is waived,b which al ows issuers to consider Rhode Island
reinsurance program payments when setting market-wide index rates. The expected effect is
that individual market premiums wil decrease and federal spending on premium tax credits
for residents of Rhode Island wil decrease. The state is to receive the resulting reductions in
federal spending as pass-through funding. Under the waiver, Rhode Island is to use the pass-
through funding to support the reinsurance program and corresponding payments to issuers
beginning in CY2020 and continuing through CY2024.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of Rhode Island.
Wisconsin
Apr. 18,
Approved—
Wisconsin established a state-based reinsurance program, the Wisconsin Healthcare Stability
CMS indicated
CY2019-
2018
July 29, 2018
Plan (WIHSP), which reimburses issuers sel ing coverage in the state’s individual market for a
Wisconsin would
CY2023
percentage of enrol ees’ claims between an attachment point and a cap.
receive $127.7
Wisconsin’s approved waiver is similar to other reinsurance-type waivers in that the ACA
mil ion for CY2019
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
and $142.0 mil ion
be members of a single risk pool is waived,b which al ows issuers to consider WIHSP
for CY2020.
payments when setting market-wide index rates. The expected effect is that individual market
premiums wil decrease and federal spending on premium tax credits for residents of
Wisconsin wil decrease. The state is to receive the resulting reductions in federal spending as
pass-through funding. Wisconsin is to use the pass-through funding to support WIHSP and
corresponding payments to issuers beginning in CY2019 and continuing through CY2023.
The approved waiver does not modify the eligibility criteria for premium tax credits for
residents of Wisconsin.
CRS-18

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Application Information
Waiver Information
Estimated
Pass-Through
Effective
State
Submitted
Status
Overview
Fundinga
Period
Pending Applications
Idaho
July 15, 2019
Received
Idaho is seeking to waive the requirements that prevent individuals purchasing health
Idaho is not
N.A.
notification of
insurance through an exchange from being eligible to claim premium tax credits and cost
requesting pass-
incomplete
sharing reductions if they are eligible for other types of qualifying coverage (e.g., Medicaid).j
through funding.
application—
At the time the application was submitted, Idaho residents with incomes between 100% and
Aug. 29, 2019
138% of the federal poverty level (FPL) who purchased health insurance through the individual
exchange were eligible for premium tax credits and cost-sharing reductions (assuming other
eligibility criteria also were met). However, Idaho was in the process of expanding Medicaid
eligibility to individuals with incomes between 100% and 138% of the FPL, which was assumed
by Idaho to be effective beginning CY2020. Once the Medicaid expansion went into effect,
those who were newly eligible for Medicaid would no longer be eligible for premium tax
credits and cost-sharing reductions through the exchange.
By waiving the specified provisions, Idaho indicates that individuals with incomes between
100% and 138% of the FPL would be able to choose between subsidized exchange coverage
and Medicaid.
Massachusetts Sept. 8, 2017 Received
Massachusetts is seeking to create a Premium Stabilization Fund (PSF), which would be used
Massachusetts
N.A.
notification of
to reimburse issuers amounts equal to what would have been provided by cost-sharing
estimated it would
incomplete
reduction payments. At the time the application was submitted, cost-sharing reduction
receive between
application—
payments were stil being made to insurers; however, there was uncertainty as to whether the $143 and $146
Oct. 23, 2017
current administration would continue to make payments moving forward. Massachusetts
mil ion for CY2018.
sought to use the waiver process to avoid the need for a rate revision in the event that cost-

sharing reduction payments stopped.
Under the proposed waiver, the ACA provision that provides for cost-sharing subsidy
payments to issuers from HHS would be waived,k which Massachusetts indicates would al ow
the state to substitute these payments with al ocations from the PSF. The expected effect is
that individual market premiums would decrease and federal spending on premium tax credits
for residents of Massachusetts also would decrease. The state would receive the resulting
reductions in federal spending as pass-through funding.
Under the proposed waiver, Massachusetts would use the pass-through funding for PSF
payments to issuers for an initial period of one year, beginning in CY2018, and the state would
request the opportunity to renew the waiver through CY2022.
CRS-19

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Application Information
Waiver Information
Estimated
Pass-Through
Effective
State
Submitted
Status
Overview
Fundinga
Period
Ohio
Mar. 30,
Received
Ohio is seeking to waive the requirement that individuals must maintain minimum essential
Ohio is not
N.A.
2018
notification of
coverage, as established under the ACA’s individual mandate provision.l Under the proposed
requesting pass-
incomplete
waiver, the requirement would be waived beginning in CY2019.m
through funding.
application—

May 17, 2018
Vermont
Apr. 25,
Received
Vermont is seeking an exemption from the requirement that a state must establish a SHOP
Vermont is not
N.A.
2016
notification of
exchange for smal employers.
requesting pass-
incomplete
Under the proposed waiver, Vermont seeks to waive multiple ACA provisions relating to the
through funding.
application—
establishment and operation of a SHOP exchange.n As a result, Vermont indicates that
June 9, 2016
employers in the smal -group market would purchase qualified health plans directly from an
issuer.
Withdrawn Applications
California
Dec. 19,
Withdrawn—
California sought to provide undocumented immigrants with the ability to purchase
California did not
N.A.
2016
Jan. 18, 2017
unsubsidized insurance through its exchange.
request pass-through
Under this waiver, the ACA provision that prohibits the marketing of nonqualified health plans funding.
(QHPs) on the exchanges would have been waived,o which California indicates would have
al owed “California Qualified Health Plans (CQHP)” to be offered through its exchange.
CQHPs would have differed from QHPs only in that undocumented individuals could
purchase CQHPs and enrol ment in CQHPs would disqualify individuals from receiving
premium tax credits and cost-sharing subsidies.
CRS-20

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Application Information
Waiver Information
Estimated
Pass-Through
Effective
State
Submitted
Status
Overview
Fundinga
Period
Iowa
Aug. 21,
Withdrawn—
Iowa sought to al ow issuers in its individual market to offer one standard health plan, to
Iowa estimated it
N.A.
2017
Oct. 23, 2017
provide age- and income-based premium tax credits to individuals purchasing the standard
would have received
plans, and to support a state-based reinsurance program.
$422 mil ion for
Under this waiver, Iowa sought to waive the fol owing ACA provisions.p
CY2018.

Iowa applied to waive the provisions establishing premium tax credits and cost-sharing
reductions. Iowa indicates that it would have received the resulting reductions in federal
spending as pass-through funding and would have al ocated this funding to its age- and
income-based premium tax credit and its reinsurance program.

Iowa applied to waive the provision that defines the coverage levels based on actuarial
value. Iowa indicates waiving the provision would authorize issuers to offer one standard
plan to consumers. The standard plan would be similar in actuarial value to a silver-tier
plan and would be purchased directly from an issuer.

Final y, Iowa applied to waive the provision that provides the Secretary with 180 days to
review al state innovation waiver requests. Iowa indicates that waiving the provision
would have al owed for expedited review of its waiver application.
The Iowa waiver would have begun in CY2018 and would have al owed Iowa to request
renewal of the program for CY2019 if necessary.
Oklahoma
Aug. 16,
Withdrawn—
Oklahoma established a state-based reinsurance program, the Oklahoma Individual Health
Oklahoma estimated
N.A.
2017
Sept. 29, 2017 Insurance Market Stabilization Program (OMSP), though the operation of the program was
it would have
conditional upon receiving federal funds to implement and sustain the OMSP. Had the waiver
received $309
been approved, the OMSP would have reimbursed issuers sel ing coverage in the state’s
mil ion for CY2018
individual market for a percentage of enrol ees’ claims between an attachment point and a cap. and $1,395 mil ion
Oklahoma’s withdrawn waiver was similar to other reinsurance-type waivers in that the ACA
over the period
provision requiring issuers to consider al enrol ees in individual plans offered by the issuer to
CY2018-CY2022.
be members of a single risk pool would have been waived,b which would have al owed issuers
to consider OMSP payments when setting market-wide index rates. The expected effect was
that individual market premiums would have decreased and federal spending on premium tax
credits for residents of Oklahoma also would have decreased. The state would have received
the resulting reductions in federal spending as pass-through funding. Under the waiver,
Oklahoma would have used the pass-through funding for OMSP payments to issuers beginning
in CY2018.
Source: Various documents available on the CMS website, “Section 1332: State Innovation Waivers,” at https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-
Innovation-Waivers/Section_1332_State_Innovation_Waivers-.html, viewed January 25, 2021.
CRS-21

Notes: Estimated pass-through funding describes either the amount of pass-through funding that a state estimates it wil receive in its waiver application or, when
available, the amount of pass-through funding CMS estimates it wil provide to the state as determined annual y by the Secretary of the Department of Healt h and Human
Services and/or the Secretary of the Department of the Treasury (as appropriate). For more information on reinsurance, see CRS In Focus IF10707, Reinsurance in Health
Insurance.
a. At the time of this report’s publication, CMS has not communicated the amount of pass-through funding for approved waivers in CY2021.
b. Specifical y, ACA §1312(c)(1).
c. Although waivers can be approved for a period of up to five years, the Colorado application requested, and was approved for, an effective period from CY2020
through CY2021.
d. Specifical y, ACA §1311(b), (c), (d), (e), and (i) only to the extent that it is inconsistent with the Georgia Access Model.
e. Specifical y, the fol owing ACA §§: 1301(a)(1)(C)(i ); 1301(a)(2); 1304(b)(4)(D)(i) and (i ); 1311(b)(1)(B); 1312(a)(2); 1312(f)(2)(A); and 1321(c)(1).
f.
The final amounts of pass-through funding received by Hawai account for budget sequestration. The final amount of pass-through funding to be received by Hawai
in 2021 is subject to a final administrative determination by the Department of the Treasury.
g. The final amount of pass-through funding to be received by Hawai in 2021 is subject to a final administrative determination by the Department of the Treasury.
h. Although Maryland’s waiver application anticipated having enough funds to operate the Maryland State Reinsurance Program from CY2019 through CY2021, the
application requested, and was approved for, an effective period from CY2019 through CY2023.
i.
In addition to what is described in the table about Minnesota’s approved waiver, Minnesota’s waiver application also requested that the state receive, in pass-
through funding, the amount that the federal government would save in payments to Minnesota’s Basic Health Program because of premium reductions due to
MSPS. This request was not granted under the approved waiver. For details, see Letter from Mark Dayton, Governor of Minnesota, et al. to Thomas Price,
Secretary of the U.S. Department of Health and Human Services, September 19, 2017, http://mn.gov/gov-stat/pdf/
2017_09_19_Governor_Dayton_Letter_to_Secretary_Price_1332_Waiver.pdf, and Letter from Mark Dayton, Governor of Minnesota, to Seema Verma,
Administrator of the Centers for Medicare & Medicaid Services, October 16, 2017, https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/
Downloads/Approval-Letter-MN.pdf.
j.
Idaho applied to waive ACA §1402 and 26 U.S.C. §36B(c)(2)(B), the latter of which was added to the Internal Revenue Code by ACA §1401.
k. Massachusetts applied to waive ACA §1402(c)(3)(A).
l.
Ohio applied to waive 26 U.S.C. §5000A(a), which was added to the Internal Revenue Code by ACA §1501.
m. Ohio’s House Bil 49 requires Ohio’s department of insurance to submit a 1332 waiver application that includes a request to waive the ACA’s individual and
employer mandates. In its waiver application, Ohio acknowledges that the 2017 tax revision (P.L. 115-97) effectively eliminates the penalty associated with the
individual mandate beginning in CY2019 but points out that the law does not eliminate the individual mandate. As such, Ohio’s 1332 waiver application requests to
waive the individual mandate (however, the application does not include a request to waive the employer mandate).
n. Vermont applied to waive the fol owing ACA §§: 1311(b)(1)(B); 1311(c)(3); 1311(c)(4); 1311(c)(5); 1311(d)(1); 1311(d)(2); 1311(d)(4)(A); 1311(d)(4)(B);
1311(d)(4)(C); 1311(d)(4)(D); 1311(d)(4)(E); 1311(d)(4)(G); 1311(k); 1312(a)(2); 1312(f)(2)(A) .
o. California applied to waive ACA §1311(d)(2)(B)(i).
p. Iowa applied to waive ACA §§1402; 1401(a); 1302(d); and 1332(d).
CRS-22

State Innovation Waivers: Frequently Asked Questions

Author Information

Ryan J. Rosso

Analyst in Health Care Financing

Acknowledgments
Earlier versions of this report were authored by Annie Mach, former CRS Specialist in Health Care
Financing.

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.

Congressional Research Service
R44760 · VERSION 20 · UPDATED
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