Insights

HHS Promotes ACA Section 1332 Innovation Waivers


On March 13, 2017, HHS and the Department of the Treasury (the Departments) released a letter giving states greater flexibility in pursuing an innovation waiver under Section 1332 of the ACA.

As background, the ACA allows states to apply for an “innovation waiver” from the employer shared responsibility penalty tax and certain other requirements for plan years beginning on or after Jan. 1, 2017. The waivers provide states the flexibility to pursue their own strategies to provide their residents with access to health insurance that is affordable and provides MEC.

The Departments’ letter highlights innovation waivers as a way for states to modify existing laws or create something entirely new to meet the unique needs of their communities. The Departments are promoting these waivers to give states the opportunity to develop strategies that best suit their individual needs, such as lower premiums for consumers, improved market stability and increased consumer choice.

If a state’s waiver proposal is approved, the state may be able to receive pass-through funding to help offset a portion of the costs for the high-risk pool/state-operated reinsurance and other premium stabilization programs while also lowering costs for consumers. According to the letter, the Departments welcome the opportunity to work with states on Section 1332 innovation waivers, and in particular, invite states to pursue approval of waiver proposals that include high-risk pool/state-operated reinsurance programs.

Departments' Letter »
Innovation Waiver Resources »