1332 State Innovation Waivers

Under Section 1332 of the ACA, states can apply for State Innovation Waivers (also referred to as section 1332 waivers) and pursue innovative strategies to adapt many of the law's requirements to suit the state's specific needs. To receive approval,

Under Section 1332 of the ACA, states can apply for State Innovation Waivers (also referred to as section 1332 waivers) and pursue innovative strategies to adapt many of the law's requirements to suit the state's specific needs. To receive approval, the state must demonstrate that a proposed section 1332 waiver meets the statutory guardrails to provide coverage that is at least as comprehensive as the coverage provided without the waiver; provides coverage and cost-sharing protections against excessive out-of-pocket spending that are at least as affordable as without the waiver; provides coverage to at least a comparable number of residents as without the waiver; and does not increase the federal deficit. Before submitting its section 1332 waiver application the state must also provide a public notice and comment period, including public hearings, sufficient to ensure a meaningful level of public input, and enact a law providing for implementation of the waiver. Under a section 1332 waiver, a state may receive pass-through funding associated with the resulting reductions in federal spending on Exchange financial assistance consistent with the statute.

This funding opportunity is only open to US States, Territories and Possessions.

Federal pass-through funding made available through a section 1332 waiver must be used only to implement the waiver program. The amount of federal pass-through funding equals the Departments' annual estimate of the federal financial assistance, including premium tax credits (PTC), small business tax credits, or cost-sharing reductions, provided pursuant to the ACA that would have been paid on behalf of participants in the Exchange in the state in the calendar year in the absence of the waiver, but will not be paid as a result of the waiver. The pass-through funds cannot be obligated by the state prior to the waiver effective date. The state agrees to use the full amount of pass-through funding for purposes of implementing the state's plan as approved by the Departments. To the extent any pass-through funding exceeds the amount necessary to implement the waiver program, the remaining funds must be rolled over and used for purposes of implementing the state's plan under the waiver. If the waiver is not extended or amended, or is suspended or terminated, unused pass-through funds will be returned to the Treasury promptly, and the state will comply with all the necessary steps to do so.

The pass-through funds cannot be obligated by the state prior to the section 1332 waiver effective date. The state agrees to use the full amount of pass-through funding for purposes of implementing the state's plan as approved by the U.S. Department of Health and Human Services (HHS) and the Department of the Treasury (collectively, the Departments). To the extent any pass-through funding exceeds the amount necessary to implement the waiver program, the remaining funds must be rolled over and used for purposes of implementing the state's plan under the waiver. The default waiver period is five years, but waivers can be extended beyond that timeframe. Waivers can be amended as well. If the waiver is not extended or amended, or if it is suspended or terminated, unused pass-through funds will be returned to the Treasury promptly, and the state will comply with all the necessary steps to do so. Assistance is in the form of a grant, and will be released using the Payment Management System. Method of awarding/releasing assistance: quarterly

Preapplication coordination is strongly encouraged. Environmental impact information is not required for this program. This program is excluded from coverage under E.O. 12372.

OMB Circular N. A-102 applies. Applicants must complete a section 1332 waiver application package. Information about the application process is available at https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Section_1332_State_Innovation_Waivers-. This package must be submitted to the 1332 e-mail box, stateinnovationwaivers@cms.hhs.gov. HHS/CMS will review the request and coordinate accordingly with the applicant. A review team will review the package and make recommendations. The final approval authority rests with the Secretary of Health and Human Services and the Secretary of the Treasury (collectively, the Secretaries). Technical assistance may be provided to any state interested in a section 1332 waiver. States should electronically submit their applications, as well as any supporting documentation or information, to the 1332 e-mail mailbox at stateinnovationwaivers@cms.hhs.gov. The Departments will render decisions on both completeness and approval; if complete, the application is posted for a Federal comment period.

No more than 180 days from the determination of application completeness of an initial section 1332 waiver application. For a waiver extension request, no more than 90 days from the determination of application completeness. For a waiver amendment request, no more than 180 days from the determination of application completeness.

The Patient Protection and Affordable Care Act; Updating Payment Parameters, Section 1332 Waiver Implementing Regulations, and Improving Health Insurance Markets for 2022 and Beyond final rule (31 CFR 33.132 and 45 CFR 155.1332), as well as the state's approval letter and specific terms and conditions (STCs), include information regarding waiver extension requests. In accordance with Section 1332(e) of the ACA, waiver extension requests are deemed granted within 90 days, unless the Departments deny the request or request additional information.