42 USC 300gg-44 - State flexibility in individual market reforms

U.S Code last checked for updates: Oct 26, 2025

§ 300gg–44.

State flexibility in individual market reforms

(a)

Waiver of requirements where implementation of acceptable alternative mechanism

(1)

In general

The requirements of section 300gg–41 of this title shall not apply with respect to health insurance coverage offered in the individual market in the State so long as a State is found to be implementing, in accordance with this section and consistent with section 300gg–62(b) of this title, an alternative mechanism (in this section referred to as an “acceptable alternative mechanism”)—

(A)

under which all eligible individuals are provided a choice of health insurance coverage;

(B)

under which such coverage does not impose any preexisting condition exclusion with respect to such coverage;

(C)

under which such choice of coverage includes at least one policy form of coverage that is comparable to comprehensive health insurance coverage offered in the individual market in such State or that is comparable to a standard option of coverage available under the group or individual health insurance laws of such State; and

(D)

in a State which is implementing—

(i)

a model act described in subsection (c)(1),

(ii)

a qualified high risk pool described in subsection (c)(2), or

(iii)

a mechanism described in subsection (c)(3).

(2)

Permissible forms of mechanisms

(b)

Application of acceptable alternative mechanisms

(1)

Presumption

(A)

In general

Subject to the succeeding provisions of this subsection, a State is presumed to be implementing an acceptable alternative mechanism in accordance with this section as of July 1, 1997, if, by not later than April 1, 1997, the chief executive officer of a State—

(i)

notifies the Secretary that the State has enacted or intends to enact (by not later than January 1, 1998, or July 1, 1998, in the case of a State described in subparagraph (B)(ii)) any necessary legislation to provide for the implementation of a mechanism reasonably designed to be an acceptable alternative mechanism as of January 1, 1998,1

 So in original. The comma probably should not appear.

(or, in the case of a State described in subparagraph (B)(ii), July 1, 1998); and

(ii)

provides the Secretary with such information as the Secretary may require to review the mechanism and its implementation (or proposed implementation) under this subsection.

(B)

Delay permitted for certain States

(i)

Effect of delay

In the case of a State described in clause (ii) that provides notice under subparagraph (A)(i), for the presumption to continue on and after July 1, 1998, the chief executive officer of the State by April 1, 1998—

(I)

must notify the Secretary that the State has enacted any necessary legislation to provide for the implementation of a mechanism reasonably designed to be an acceptable alternative mechanism as of July 1, 1998; and

(II)

must provide the Secretary with such information as the Secretary may require to review the mechanism and its implementation (or proposed implementation) under this subsection.

(ii)

States described

(C)

Continued application

(2)

Notice

If the Secretary finds, after review of information provided under paragraph (1) and in consultation with the chief executive officer of the State and the insurance commissioner or chief insurance regulatory official of the State, that such a mechanism is not an acceptable alternative mechanism or is not (or no longer) being implemented, the Secretary—

(A)

shall notify the State of—

(i)

such preliminary determination, and

(ii)

the consequences under paragraph (3) of a failure to implement such a mechanism; and

(B)

shall permit the State a reasonable opportunity in which to modify the mechanism (or to adopt another mechanism) in a manner so that may be an acceptable alternative mechanism or to provide for implementation of such a mechanism.

(3)

Final determination

(4)

Limitation on secretarial authority

(5)

Future adoption of mechanisms

(c)

Provision related to risk

(1)

Adoption of NAIC models

(2)

Qualified high risk pool

For purposes of subsection (a)(1)(D)(ii), a “qualified high risk pool” described in this paragraph is a high risk pool that—

(A)

provides to all eligible individuals health insurance coverage (or comparable coverage) that does not impose any preexisting condition exclusion with respect to such coverage for all eligible individuals, and

(B)

provides for premium rates and covered benefits for such coverage consistent with standards included in the NAIC Model Health Plan for Uninsurable Individuals Act (as in effect as of August 21, 1996).

(3)

Other mechanisms

For purposes of subsection (a)(1)(D)(iii), a mechanism described in this paragraph—

(A)

provides for risk adjustment, risk spreading, or a risk spreading mechanism (among issuers or policies of an issuer) or otherwise provides for some financial subsidization for eligible individuals, including through assistance to participating issuers; or

(B)

is a mechanism under which each eligible individual is provided a choice of all individual health insurance coverage otherwise available.

(July 1, 1944, ch. 373, title XXVII, § 2744, as added Pub. L. 104–191, title I, § 111(a), Aug. 21, 1996, 110 Stat. 1984; amended Pub. L. 104–204, title VI, § 605(b)(1), Sept. 26, 1996, 110 Stat. 2942.)

cite as: 42 USC 300gg-44