DEPARTMENT OF THE TREASURY 

31 CFR Part 33 

RIN 1505-AC30 

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

45 CFR Part 155 

[CMS-9987-P] 

RIN 0938-AQ75 

Application, Review, and Reporting Process for Waivers for 

State Innovation 

AGENCY: Centers for Medicare & Medicaid Services (CMS),

HHS; Department of the Treasury. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule sets forth a procedural 

framework for submission and review of initial applications 

for a Waiver for State Innovation described in section 1332 

of the Patient Protection and the Affordable Care Act 

including processes to ensure opportunities for public 

input in the development of such applications by States and 

in the Federal review of the applications. 

DATES: Comments are due on or before [OFR--insert date 60

days after date of publication in the Federal Register]. 

ADDRESSES: Written comments may be submitted to any of the 

addresses specified below. Any comment that is submitted 

to one Department will be shared with the other Department. 

Please do not submit duplicates. 
CMS-9987-P 2

Department of the Treasury. Interested members of the 

public are invited to submit comments on this proposed 

rule. Comments may be submitted to Treasury by either of 

the following methods: Submit electronic comments through 

the Federal government e-rulemaking portal, 

www.regulations.gov, or send comments in hard copy to: 

Office of Benefits Tax Counsel, Attention: Waivers for 

State Innovation, Room 3050, Department of the Treasury, 

1500 Pennsylvania Avenue, NW, Washington, DC 20220. 

 In general, Treasury will post all comments to 

www.regulations.gov without change, including any business 

or personal information provided such as names, addresses, 

e-mail addresses, or telephone numbers. Treasury will also 

make such comments available for public inspection and 

copying in Treasury’s Library, Room 1428, 1500 Pennsylvania 

Avenue, NW, Washington, DC 20220, on official business days 

between the hours of 10:00 a.m. and 5:00 p.m. Eastern Time. 

Members of the public can make an appointment to inspect 

comments by telephoning (202) 622-0990. All comments 

received, including attachments and other supporting 

materials, are part of the public record and subject to 

public disclosure. You should only submit information that 

you wish to make available publicly.

Centers for Medicare & Medicaid Services. In 

commenting, please refer to file code CMS-9987-P. Because 
CMS-9987-P 3

of staff and resource limitations, we cannot accept 

comments by facsimile (FAX) transmission. 

 You may submit comments in one of four ways (please 

choose only one of the ways listed): 

1. Electronically. You may submit electronic 

comments on this regulation to http://www.regulations.gov. 

Follow the “Submit a comment” instructions. 

 2. By regular mail. You may mail written comments to 

the following address ONLY: 

Centers for Medicare & Medicaid Services, 

Department of Health and Human Services, 

Attention: CMS-9987-P, 

P.O. Box 8016, 

 Baltimore, MD 21244-8016. 

Please allow sufficient time for mailed comments to be 

received before the close of the comment period. 

3. By express or overnight mail. You may send 

written comments to the following address ONLY: 

Centers for Medicare & Medicaid Services, 

Department of Health and Human Services, 

Attention: CMS-9987-P, 

Mail Stop C4-26-05, 

7500 Security Boulevard, 

Baltimore, MD 21244-1850. 
CMS-9987-P 4

4. By hand or courier. If you prefer, you may deliver 

(by hand or courier) your written comments before the close 

of the comment period to either of the following addresses: 

a. For delivery in Washington, DC-- 

Centers for Medicare & Medicaid Services, 

Department of Health and Human Services, 

Room 445-G, Hubert H. Humphrey Building, 

 200 Independence Avenue, SW., 

 Washington, DC 20201 

(Because access to the interior of the 

Hubert H. Humphrey Building is not readily available to 

persons without Federal government identification, 

commenters are encouraged to leave their comments in the 

CMS drop slots located in the main lobby of the building. 

A stamp-in clock is available for persons wishing to retain 

a proof of filing by stamping in and retaining an extra 

copy of the comments being filed.) 

b. For delivery in Baltimore, MD-- 

 Centers for Medicare & Medicaid Services, 

Department of Health and Human Services, 

7500 Security Boulevard, 

Baltimore, MD 21244-1850. 

If you intend to deliver your comments to the 

Baltimore address, please call telephone number 
CMS-9987-P 5

(410) 786-7195 in advance to schedule your arrival with one 

of our staff members. 

Comments mailed to the addresses indicated as 

appropriate for hand or courier delivery may be delayed and 

received after the comment period. 

Submission of comments on paperwork requirements. You 

may submit comments on this document's paperwork 

requirements by following the instructions at the end of 

the "Collection of Information Requirements" section in 

this document. 

 Inspection of Public Comments: All comments received 

before the close of the comment period are available for 

viewing by the public, including any personally 

identifiable or confidential business information that is 

included in a comment. We post all comments received 

before the close of the comment period on the following web 

site as soon as possible after they have been received: 

http://regulations.gov. Follow the search instructions on 

that web site to view public comments. 

 Comments received timely will be also available for 

public inspection as they are received, generally beginning 

approximately 3 weeks after publication of a document, at 

the headquarters of the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, Baltimore, Maryland 

21244, Monday through Friday of each week from 8:30 a.m. to 
CMS-9987-P 6

4 p.m. To schedule an appointment to view public comments, 

phone 1-800-743-3951. 

FOR FURTHER INFORMATION CONTACT: 

Department of the Treasury: 

 Carrie Simons, (202)622-0044. 

Centers for Medicare & Medicaid Services: 

Ben Walker, (301)492-4430. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 1332 of the Patient Protection and Affordable 

Care Act (the Affordable Care Act) (Pub. L. 111-148, 

enacted on March 23, 2010) creates a new Waiver for State 

Innovation and authorizes the Secretary of Health and Human 

Services (HHS) and the Secretary of the Treasury (the 

Secretaries) to waive all or any of the following 

requirements falling under their respective jurisdictions 

for health insurance coverage within a State for plan years 

beginning on or after January 1, 2017: 

● Part I of subtitle D of Title I of the Affordable 

Care Act (relating to the establishment of qualified health 

plans); 

● Part II of subtitle D of Title I of the Affordable 

Care Act (relating to consumer choices and insurance 

competition through health benefit exchanges); 
CMS-9987-P 7

● Section 1402 of the Affordable Care Act (relating 

to reduced cost sharing for individuals enrolling in 

qualified health plans); and 

● Sections 36B (relating to refundable credits for 

coverage under a qualified health plan), 4980H (relating to 

shared responsibility for employers regarding health 

coverage), and 5000A (relating to the requirement to 

maintain minimum essential coverage) of the Internal 

Revenue Code. 

Section 1332 of the Affordable Care Act provides that 

references in that section to “Secretary” refer to the 

Secretary of Health and Human Services for waivers relating 

to Parts I and II of subtitle D of Title I of the 

Affordable Care Act and section 1402 of the Affordable Care 

Act, and refer to the Secretary of the Treasury for waivers 

relating to sections 36B, 4980H, and 5000A of the Internal 

Revenue Code. 

Section 1332(a)(4)(B) of the Affordable Care Act 

requires the Secretaries to issue regulations that provide 

the following: 

● A process for public notice and comment at the 

State level, including public hearings, that is sufficient 

to ensure a meaningful level of public input (section 

1332(a)(4)(B)(i) of the Affordable Care Act); 
CMS-9987-P 8

● A process for the submission of an application that 

ensures the disclosure of (A) the provisions of law that 

the State involved seeks to waive, and (B) the specific 

plans of the State to ensure that the waiver will be in 

compliance with specified statutory requirements relating 

to the comprehensiveness of coverage, affordability of 

coverage, scope of coverage, and the effect on Federal 

deficit (as described below) (section 1332(a)(4)(B)(ii) of 

the Affordable Care Act); 

● A process for providing public notice and comment 

after the application is received by the applicable 

Secretary or Secretaries, that is sufficient to ensure a 

meaningful level of public input and that does not impose 

requirements that are in addition to, or duplicative of, 

requirements imposed under the Administrative Procedure Act 

(APA), or requirements that are unreasonable or 

unnecessarily burdensome with respect to State compliance 

(section 1332(a)(4)(B)(iii) of the Affordable Care Act); 

● A process for the submission to the applicable 

Secretary or Secretaries of periodic reports by the State 

concerning the implementation of the program under a waiver 

(section 1332(a)(4)(B)(iv) of the Affordable Care Act); and 

● A process for the periodic evaluation by the 

applicable Secretary or Secretaries of the program under a 
CMS-9987-P 9

waiver (section 1332(a)(4)(B)(v) of the Affordable Care 

Act). 

 Although section 1332 of the Affordable Care Act does 

not authorize waivers for related programs like Medicaid 

(title XIX of the Social Security Act) or the Children’s 

Health Insurance Program (title XXI of the Social Security 

Act), those programs have existing waiver authorities. 

Section 1332(a)(5) of the Affordable Care Act requires the 

Secretaries to develop a process for coordinating and 

consolidating the State waiver processes applicable under 

the provisions of section 1332 of the Affordable Care Act 

with the existing waiver processes applicable under titles 

XVIII (Medicare), XIX (Medicaid), and XXI (Children’s 

Health Insurance Program, or CHIP) of the Social Security 

Act, and any waiver processes under other Federal laws 

relating to the provision of health care items or services. 

Section 1332(a)(5) of the Affordable Care Act further 

requires the process developed by the Secretaries to permit 

a State to submit a single application for a waiver under 

any or all of those provisions. 

 This proposed rule would implement the procedural 

requirements of section 1332 of the Affordable Care Act. 

The proposed rule is intended to provide for a waiver 

application process that can be coordinated and 

consolidated with the processes for the submission of 
CMS-9987-P 10

applications for waivers under titles XVIII, XIX, and XXI 

of the Social Security Act. 

II. Overview of the Proposed Regulations: Section 1332 of 

the Affordable Care Act, Waiver for State Innovation (31 

CFR Part 33 and 45 CFR Part 155) 

A. Introduction

To implement the provisions of section 1332 of the 

Affordable Care Act, the Department of the Treasury 

proposes to add new part 33 to 31 CFR Subtitle A and the 

Centers for Medicare & Medicaid Services, on behalf of the 

Department of Health and Human Services, proposes to add 

new part 155 to 45 CFR Subtitle A. These new parts would 

address procedures for State development and submission of 

an application for a Waiver for State Innovation under 

section 1332 of the Affordable Care Act (referred to in the 

proposed regulations as a section 1332 waiver), a process 

for providing public notice and opportunity for comment at 

the State and Federal levels, a process for the review of 

applications by the Secretaries, and processes for the 

monitoring and evaluation of approved section 1332 waivers 

by the States and the Secretaries, including the periodic 

submission of reports by the States to the Secretaries. 

B. Coordinated Waiver Process (31 CFR 33.102 and 45 CFR 

155.1302)
CMS-9987-P 11

These proposed regulations at 31 CFR 33.102 and 45 CFR 

155.1302 permit, but do not require, States to submit a 

single application for a section 1332 waiver and a waiver 

under one or more of the existing waiver processes 

applicable under titles XVIII, XIX, and XXI of the Social 

Security Act, or under any other Federal law relating to 

the provision of health care items or services, provided 

that the application is consistent with the procedures 

described in these proposed regulations, the procedures for 

section 1115 demonstrations, if applicable, and the 

procedures under any other applicable Federal law under 

which the State seeks a waiver1

. 

The proposed regulations require a State seeking a 

section 1332 waiver to submit a waiver application to the 

Secretary of HHS. Upon receipt, the Secretary of HHS will 

transmit any application that includes a request for a 

waiver of provisions under the jurisdiction of the 

Secretary of the Treasury (sections 36B, 4980H and 5000A of 

the Internal Revenue Code) to be reviewed in accordance 

with the provisions of these proposed regulations. The 

Secretaries will coordinate the review of any application 

that includes a request for a waiver of provisions falling 

 

1 Although section 1332 of the Affordable Care Act does not authorize waivers for related programs like 

Medicaid (title XIX of the Social Security Act) or the Children’s Health Insurance Program (title XXI of 

the Social Security Act), those programs have existing waiver authorities. 
CMS-9987-P 12

under the jurisdiction of each of the Departments of Health 

and Human Services and the Treasury (the Departments). 

C. Application Procedures (31 CFR 33.108 and 45 CFR 

155.1308)

These proposed regulations establish procedures for 

the submission of applications for an initial section 1332 

waiver. 

Under 31 CFR 33.108(a) and 45 CFR 155.1308(a) of the 

proposed regulations, the Secretaries will subject each 

application for an initial section 1332 waiver to a 

preliminary review. The Secretaries will complete the 

preliminary review within 45 days after the application is 

submitted. 

During this preliminary review period, the Secretaries 

will make a preliminary determination as to whether a 

State’s application complies with the requirements set 

forth in 31 CFR 33.108(a)(2) and 45 CFR 155.1308(a)(2). If 

the Secretaries determine that an application is 

incomplete, the Secretary of HHS will send the State a 

written notice of the elements missing from the 

application. These proposed regulations provide that a 

preliminary determination that an application is complete 

does not preclude a finding during the 180-day Federal 

decision-making period that a necessary element of the 
CMS-9987-P 13

application is missing or insufficient, rendering the 

application incomplete. 

These proposed regulations provide that a submitted 

application will not be considered received until the 

Secretaries have made this preliminary determination that 

the application is complete. This timing protocol is 

necessary to ensure that the Federal public notice and 

comment period and the 180-day Federal decision-making 

period are based on applications that the Secretaries 

preliminarily determine to be complete, and that all 

relevant information is available for review during those 

periods. 

The proposed regulations provide that, upon a 

preliminary determination by the Secretaries that an 

application they have received is complete, as defined 

under these proposed regulations, the Secretary of HHS will 

send the State a written notice informing the State that 

the Secretaries have made such a preliminary determination, 

and the date upon which they have made that preliminary 

determination. That date will also mark the beginning of 

the Federal public notice and comment period and the 180-

day Federal decision-making period. 

Under the proposed regulations, an application for 

initial approval of a section 1332 waiver will not be 

considered complete unless the application: (1) complies 
CMS-9987-P 14

with the application procedures of 31 CFR 33.108(a)(2)(iv) 

and 45 CFR 155.1308(a)(2)(iv); (2) provides written 

evidence of the State’s compliance with the public notice 

requirements set forth in 31 CFR 33.112 and 45 CFR 

155.1312; and (3) provides all of the following: 

● A comprehensive description of the State 

legislation and program to implement a plan meeting the 

requirements for a waiver under section 1332, as required 

under section 1332(a)(1)(B)(i) of the Affordable Care Act; 

● A copy of the enacted State legislation authorizing 

such waiver request, as required under section 

1332(a)(1)(C) of the Affordable Care Act; 

● A list of the provisions of law that the State 

seeks to waive including a brief description of the reason 

for the specific requests; and 

● The analyses, actuarial certifications, data, 

assumptions, targets and other information sufficient to 

provide the Secretaries with the necessary data to 

determine that the State’s proposed waiver: 

+ Will, as required under section 1332(b)(1)(A) of 

the Affordable Care Act (the comprehensive coverage 

requirement), provide coverage that is at least as 

comprehensive as the coverage defined in section 1302(b) of 

the Affordable Care Act and offered through Exchanges 

established under Title I of the Affordable Care Act as 
CMS-9987-P 15

certified by the Office of the Actuary of the Centers for 

Medicare and Medicaid Services based on sufficient data 

from the State and from comparable States about their 

experience with programs created by the Affordable Care Act 

and the provisions of the Affordable Care Act that would be 

waived; 

+ Will, as required under section 1332(b)(1)(B) of 

the Affordable Care Act (the affordability requirement), 

provide coverage and cost sharing protections against 

excessive out-of-pocket spending that are at least as 

affordable as the provisions of Title I of the Affordable 

Care Act would provide; 

+ Will, as required under section 1332(b)(1)(B)(C) of 

the Affordable Care Act (the scope of coverage 

requirement), provide coverage to at least a comparable 

number of its residents as the provisions of Title I of the 

Affordable Care Act would provide; and 

+ Will not, as prohibited under section 1332(b)(1)(D) 

of the Affordable Care Act (the Federal deficit 

requirement), increase the Federal deficit. 

Section 1332(a)(3) of the Affordable Care Act requires 

that the Secretaries provide for an alternative means by 

which the aggregate amount of tax credits or cost-sharing 

reductions that would have been paid had the State not 

received a waiver, be paid to the State for purposes of 
CMS-9987-P 16

implementing the waiver. This amount will be determined 

annually by the Secretaries, on a per capita basis, taking 

into consideration the experience of other States for 

participation in an Exchange and tax credits and costsharing reductions provided in such other States. 

To provide information necessary for the Secretaries 

to determine (1) that the State’s proposed waiver meets the 

comprehensive coverage requirement, the affordability 

requirement, the scope of coverage requirement and the 

Federal deficit requirement and (2) the annual amount, if 

any, of foregone tax credits and cost-sharing reductions 

that will be paid to the State for purposes of implementing 

the waiver pursuant to section 1332(a)(3) of the Affordable 

Care Act, the proposed regulation requires that a State’s 

application contain: 

(1) Actuarial analyses and actuarial certifications to 

support the State’s estimates that the proposed waiver will 

comply with the comprehensive coverage requirement, the 

affordability requirement and the scope of coverage 

requirement. 

(2) Economic analyses to support the State’s estimates 

that the proposed waiver will comply with the comprehensive 

coverage requirement, the affordability requirement, the 

scope of coverage requirement and the Federal deficit 

requirement, including: 
CMS-9987-P 17

● A detailed 10-year budget plan that is deficit 

neutral to the Federal government, as prescribed in section 

1332(a)(1)(B)(ii) of the Affordable Care Act, and includes 

all costs under the waiver, including administrative costs 

and other costs to the Federal government, if applicable; 

and 

● A detailed analysis regarding the estimated impact 

of the waiver on health insurance coverage in the State. 

(3) The data and assumptions used to demonstrate that 

the State’s proposal is in compliance with the 

comprehensive coverage requirement, the affordability 

requirement, the scope of coverage requirement and the 

Federal deficit requirement, including: 

● Information on the age, income, health expenses and 

current health insurance status of the relevant State 

population; the number of employers, categorized by number 

of employees and by whether the employer offers health 

insurance; cross-tabulations of these variables; and an 

explanation of data sources and quality; and 

● An explanation of the key assumptions and 

methodology used to develop the estimates of the effect of 

the waiver on health insurance coverage in the State and on 

the Federal budget, such as individual and employer 

participation rates, behavioral changes, premium and price 

effects, and other relevant factors. 
CMS-9987-P 18

(4) Additional information supporting the State's 

proposed waiver, including: 

● An explanation as to whether the waiver increases 

or decreases the administrative burden on individuals, 

insurers, and employers, and if so, how and why; 

● An explanation of whether and how the waiver will 

affect the implementation of the provisions of the 

Affordable Care Act which the State is not requesting to 

waive in the State and at the Federal level; 

● An explanation of how the waiver will affect 

residents who need to obtain health care services out-ofState, as well as the States in which such residents may 

seek such services; 

● If applicable, an explanation of how the State will 

provide the Federal government with all information 

necessary to administer the waiver at the Federal level; 

and 

● An explanation of how the State’s proposal will 

address potential individual, employer, insurer, or 

provider compliance, waste, fraud and abuse within the 

State or in other States. 

(5) For purposes of post-award monitoring, suggested 

quarterly, annual, and cumulative targets for the 

comprehensive coverage requirement, the affordability 

requirement, the scope of coverage requirement and the 
CMS-9987-P 19

Federal deficit requirement of section 1332(b) of the 

Affordable Care Act. 

(6) Other information consistent with guidance 

provided by the Secretaries. 

Under the proposed regulations, there is no minimum 

time specified between the submission of an application and 

start date of the waiver. However, we solicit comments on 

whether a State should be required to submit an application 

at least 12 months in advance of the requested effective 

date, in order to allow for the effective implementation of 

approved waivers at the State level. 

The requirement in the proposed regulation that a 

State provide certain analysis, certifications, data, 

assumptions, targets and other information as part of a 

section 1332 waiver application is designed to ensure that 

a State’s development of a waiver proposal addresses major 

relevant issues for the State and provides the Secretaries 

with sufficient information to fully assess the projected 

impact of section 1332 waiver proposals for the statutory 

requirements and to accurately determine the amount to be 

paid to the State for purposes of implementing the waiver 

under section 1332(a)(3) of the Affordable Care Act. The 

Secretaries also solicit comments regarding these proposed 

requirements, as well as what other types of analysis, 

certifications, data, assumptions, targets and information 
CMS-9987-P 20

States would consider useful in supporting an application 

for a section 1332 waiver and whether these regulations 

should specifically require such additional analyses, 

certifications, data, assumptions, targets and information 

to be included as part of a section 1332 waiver 

application. 

Lastly, during the Federal review process, the 

proposed regulation provides that the Secretaries may 

request additional supporting information from the State as 

needed to address public comments or to address issues that 

arise in reviewing the application. 

D. State Public Notice Requirements (31 CFR 33.112 and 45 

CFR 155.1312) 

Consistent with the provisions of section 1332 of the 

Affordable Care Act, to facilitate public involvement in 

the review and approval of section 1332 waiver 

applications, 31 CFR 33.112(a)(1) and 45 CFR 155.1312(a)(1) 

of the proposed regulations require a State to provide a 

public notice and comment period sufficient to ensure a 

meaningful level of public input for a section 1332 waiver 

application prior to the submission of that application to 

the Secretary of HHS for review and consideration. In 

addition, the proposed regulations require a State with one 

or more Federally-recognized Indian tribes within its 
CMS-9987-P 21

borders to consult with those Indian tribes in accordance 

with Executive Order 13175. 

Because meaningful input requires notice of the nature 

of the section 1332 waiver application, as part of the 

State notice and comment period, the proposed regulations 

require a State to provide the public with the following 

prior to the submission of an application: 

● A comprehensive description of the section 1332 

waiver application to be submitted to the Secretary of HHS, 

including information and assurances related to all 

statutory requirements and other information consistent 

with guidance provided by the Secretaries; 

● Where copies of the section 1332 waiver application 

are available for public review and comment; 

● How and where written comments may be submitted and 

reviewed by the public, and the timeframe during which 

public comments may be submitted; and 

● The location, date and time of public hearings that 

will be convened by the State to seek public input on the 

section 1332 waiver application. 

31 CFR 33.112(a)(2) and 45 CFR 155.1312(a)(2) of the 

proposed regulations require States to conduct public 

hearings that provide interested parties with the 

opportunity to learn about and comment on the contents of 

the section 1332 waiver application. 
CMS-9987-P 22

The State public notice and comment process must 

comply with applicable civil rights rules for 

accessibility, which require, for example – 

● The provision of auxiliary aids and services such 

as interpreters for persons with disabilities where 

necessary for effective communication; 

● The use of accessible meeting places for the 

hosting of public forums provided for in the Rule; 

● Reasonable steps to provide meaningful access for 

limited English proficient (LEP) persons, such as the 

inclusion of “tag lines” on State web sites containing 

phone numbers for LEP persons to call to reach “language 

line” interpreters for assistance; and 

● Other civil rights requirements applicable to the 

States under the Americans with Disabilities Act, section 

504 of the Rehabilitation Act of 1973 and Title VI of the 

Civil Rights Act of 1964, among others. 

E. Federal Public Notice and Approval Process (31 CFR 

33.116 and 45 CFR 155.1316)

Consistent with section 1332 of the Affordable Care 

Act and the Secretaries’ desire to implement a State waiver 

application process that promotes transparency, facilitates 

public involvement and input, and encourages sound 

decision-making at all levels of government, 31 CFR 33.116 

and 45 CFR 155.1316 of the proposed regulations provide for 
CMS-9987-P 23

a Federal public notice and comment period following a 

preliminary determination by the Secretaries that a State’s 

application for a section 1332 waiver is complete. As 

required by section 1332 of the Affordable Care Act, the 

Federal notice and comment period is designed to ensure a 

meaningful level of public input, while avoiding the 

imposition of requirements that are in addition to, or 

duplicative of, those imposed under the APA or that are 

unreasonable or unnecessarily burdensome for State 

compliance. 

ITo facilitate public participation in the section 

1332 waiver application process, the proposed regulations 

require the Secretary of HHS to provide the public with 

notice of a section 1332 waiver application that has been 

preliminarily determined to be complete, including any 

supplemental materials received from a State during the 

Federal public notice and comment period, as well as 

regular updates for the status of a State’s section 1332 

waiver application. In addition, the Secretary of HHS will 

provide the public with information relating to (A) where 

copies of the section 1332 waiver application are available 

for public review and comment; (B) how and where written 

comments may be submitted and reviewed by the public, and 

the timeframe during which comments may be submitted; and 
CMS-9987-P 24

(C) any public comments received during the Federal public 

notice and comment period. 

Following the conclusion of the Federal notice and 

comment period, but in no event later than 180 days 

following the preliminary determination by the Secretaries 

that a State’s application for a section 1332 waiver is 

complete, the final decision of the Secretaries on a 

State’s section 1332 waiver application will be issued by 

the Secretary of HHS. 

F. Monitoring and Compliance (31 CFR 33.120 and 45 CFR 

155.1320)

As section 1332 waivers are likely to a have a 

significant impact on individuals, States and the Federal 

government, the proposed regulations establish processes 

and methodologies to ensure that the Secretaries receive 

adequate and appropriate information regarding the 

effectiveness of section 1332 waivers (consistent with 

section 1332(a)(4)(B)(iv) of the Affordable Care Act). 

Under 31 CFR 33.120(a) and 45 CFR 155.1320(a) of the 

proposed regulations, a State is required to comply with 

all applicable Federal laws, regulations, policy statements 

and Departmental guidance unless a law or regulation has 

specifically been waived. Further, the proposed 

regulations require a State to come into compliance with 

any changes in Federal law, regulation, or policy affecting 
CMS-9987-P 25

section 1332 waivers within the timeframes specified in 

law, regulation, interpretive policy, or guidance, unless 

the provision being changed is expressly waived, and to 

comply with the terms and conditions of the agreement 

entered into between the Secretaries and the State to 

implement a section 1332 waiver, or the section 1332 waiver 

will be suspended or terminated in whole or in part by the 

Secretaries. 

Under 31 CFR 33.120(b) and 45 CFR 155.1320(b) of the 

proposed regulations, as part of the terms and conditions 

of any section 1332 waiver, a State must conduct periodic 

reviews related to the implementation of the waiver. The 

Secretaries will review, and when appropriate investigate, 

documented complaints that a State is failing to materially 

comply with requirements specified in the terms and 

conditions of the section 1332 waiver. In addition, the 

Secretaries will share with the State any complaint that 

has been received, and notify the State of any applicable 

monitoring and compliance issues. 

Under 31 CFR 33.120(c) and 45 CFR 155.1320(c) of the 

proposed regulations, to ensure continued public input 

after the initial 6 months of the waiver’s implementation, 

and annually thereafter, States are required to hold a 

public forum at which members of the public have an 

opportunity to provide comments on the progress of the 
CMS-9987-P 26

section 1332 waiver. The proposed regulation further 

requires States to include a summary of this forum to the 

Secretary of HHS as part of the quarterly and annual 

reporting requirements under 31 CFR 33.124 and 45 CFR 

155.1324. 

Under 31 CFR 33.120(c)(1) and 45 CFR 155.1320(c)(1) of 

the proposed regulations, States are required to publish 

the date, time, and location of the public forum in a 

prominent location on the State’s public Web site at least 

30 days prior to the date of the planned public forum.

 Under 31 CFR 33.120(d) and 45 CFR 155.1320(d) of the 

proposed regulations, the Secretaries reserve the right to 

suspend or terminate a section 1332 waiver, in whole or in 

part, any time before the date of expiration, if the 

Secretaries determine that the State has materially failed 

to comply with the terms and conditions of the section 1332 

waiver. In the event that all or a portion section 1332 

waiver is terminated or suspended by the Secretaries, or if 

all or a portion of the section 1332 waiver is withdrawn, 

Federal funding is limited to normal closeout costs 

associated with an orderly termination of the section 1332 

waiver, as described in 31 CFR 33.120(e) and 45 CFR 

155.1320(e). 

Under 31 CFR 33.120(f) and 45 CFR 155.1320(f) of the 

proposed regulations, in the event that the Secretaries 
CMS-9987-P 27

undertake an independent evaluation of any component of the 

section 1332 waiver, the State must cooperate fully with 

the Secretaries or the independent evaluator selected by 

the Secretaries. This cooperation includes, but is not 

limited to, the submission of all necessary data and 

information to the Secretaries or the independent 

evaluator. 

G. State Reporting Requirements (31 CFR 33.124 and 45 CFR 

155.1324) 

Section 1332 of the Affordable Care Act requires that 

the Secretaries provide for a procedure for the periodic 

submission of reports by a State concerning the 

implementation of the program under a section 1332 waiver. 

In order for the Secretaries to effectively monitor 

the implementation of a waiver, the proposed regulations 

require a State to submit a quarterly progress report in 

accordance with the terms and conditions of the State’s 

section 1332 waiver. States are also required to submit an 

annual report, as described in 31 CFR 33.124(b) and 45 CFR 

155.1324(b), documenting the following: 

● The progress of the section 1332 waiver; 

● Data on compliance with section 1332(b)(1)(A) 

through (D) of the Affordable Care Act; 

● A summary of the annual post-award public forum, 

including all public comments received regarding the 
CMS-9987-P 28

progress of the section 1332 waiver and action taken in 

response to such concerns or comments; and 

● Other information consistent with the State’s 

approved terms and conditions. 

Under 31 CFR 33.124(c) and 45 CFR 155.1324(c) of the 

proposed regulations, States are required to submit a draft 

annual report to the Secretary of Health and Human Services 

no later than 90 days after the end of each waiver year. 

Within 60 days of receipt of comments from the Secretary of 

Health and Human Services, a State is required to submit a 

final annual report for the waiver year to the Secretary of 

Health and Human Services. Finally, a State is required to 

publish the draft and final annual reports on the State’s 

public Web site. 

The Secretaries intend to issue future guidance under 

section 1332 regarding periodic reports. 

H. Periodic Evaluation Requirements (31 CFR 33.128 and 45 

CFR 155.1328) 

Section 1332 of the Affordable Care Act requires that 

the Secretaries provide for a procedure for the periodic 

evaluation of section 1332 waivers by the Secretary or 

Secretaries with jurisdiction over the provisions for which 

the waiver was granted. These proposed regulations require 

that each periodic evaluation shall include a review of all 

annual reports submitted by the State in accordance with 45 
CMS-9987-P 29

CFR 155.1324 and 31 CFR 33.124 that relate to the period of 

time covered by the evaluation. 

As part of this proposed regulation, the Secretaries 

are soliciting public comments regarding specific 

components of the periodic evaluation of a section 1332 

waiver. Potential components of a periodic evaluation could 

include, but not be limited to, the impact of the waiver on 

the following: 

● Choice of health plans for individuals and 

employers; 

● Stability of coverage for individuals and 

employers; 

● Small businesses, individuals with pre-existing 

conditions, and the low-income population; 

● The overall health care system in the State; and 

● Other States and the Federal government. 

The Secretaries intend to issue future guidance under 

section 1332 regarding periodic evaluations. 

III. Collection of Information Requirements 

 Under the Paperwork Reduction Act of 1995, the 

Departments are required to provide notice in the Federal 

Register and solicit public comment before a collection of 

information requirement is approved by the Office of 

Management and Budget (OMB). To fairly evaluate whether an 

information collection should be approved by OMB, section 
CMS-9987-P 30

3506(c)(2)(A) of the Paperwork Reduction Act of 1995 

requires that the Departments solicit comment on the 

following issues: 

● The need for the information collection and its 

usefulness in carrying out the proper functions of the 

Departments. 

● The accuracy of the Departments’ estimate of the 

information collection burden. 

● The quality, utility, and clarity of the 

information to be collected. 

● Recommendations to minimize the information 

collection burden on the affected public, including 

automated collection techniques. 

 The Departments have no way to accurately quantify the 

burden until the provisions that section 1332 authorizes 

the Secretaries to waive pursuant to an application by a 

State take effect in 2014. The Departments are soliciting 

public comments on the annual number of waiver applications 

that the Departments may receive, and will reevaluate this 

issue in future guidance. With that said, the Departments 

have developed estimates of the burden associated with 

information collection requirements in this proposed 

regulation. 
CMS-9987-P 31

 The Departments are soliciting public comment on each 

of these issues for the following sections of this document 

that contain information collection requirements (ICRs): 

A. ICRs Regarding Application Procedures (31 CFR 33.108 and 

45 CFR 155.1308)

 31 CFR 33.108 and 45 CFR 155.1308 of the proposed 

regulations establish the application process for section 

1332 waivers. A State’s application for approval of a 

section 1332 waiver must be submitted to CMS as both 

printed and electronic documents. Paragraph (a)(2)(iv) of 

31 CFR 33.108 and 45 CFR 155.1308 specify that applications 

for a section 1332 waiver will not be considered complete 

if they do not contain written evidence of compliance with 

the State public notice and comment process described in 31 

CFR 33.112 and 45 CFR 155.1312, as well as the information 

specified in paragraph (a)(2)(iv)(C) and (D) of 31 CFR 

33.108 and 45 CFR 155.1308. 

 The burden associated with the requirements in 31 CFR 

33.108 and 45 CFR 155.1308 is the time and effort necessary 

for a State to develop and submit a complete application 

for a section 1332 waiver. The Departments estimate that 

it will take 200 hours for a State to develop and submit a 

complete section 1332 waiver application, at a total cost 

of $4,134. 
CMS-9987-P 32

B. ICRs Regarding State Public Notice Requirements (31 CFR 

33.112 and 45 CFR 155.1312)

 Paragraph (a)(1) of 31 CFR 33.112 and 45 CFR 155.1312 

of the proposed regulations require a State to provide a 

public notice and comment period regarding applications for 

section 1332 waivers. 31 CFR 33.112 and 45 CFR 155.1312 

specify that prior to submitting an application to HHS and 

Treasury for a section 1332 waiver, the State must provide 

a public notice and comment period sufficient to ensure a 

meaningful level of public input. The public notice must 

address the information requirements listed in paragraphs 

(b)(1) through (4) of 31 CFR 33.112 and 45 CFR 155.1312. 

 The burden estimate associated with this requirement 

is the time and effort necessary to develop and publish a 

public notice that complies with the aforementioned 

information requirements. The Departments estimate that 

each State submitting an application for a section 1332 

waiver will require 40 hours to comply with the 

requirements in this section, at a total cost of $827 per 

State. 

 Paragraph (c) of 31 CFR 33.112 and 45 CFR 155.1312 

specify that after issuing the public notice and prior to 

submitting an application for a section 1332 waiver, a 

State must conduct public hearings regarding the State's 

waiver application. The minimum burden associated with 
CMS-9987-P 33

this requirement is the time and effort necessary for a 

State to conduct public hearings prior to submitting an 

application for a section 1332 waiver. While this 

requirement is subject to the PRA, the Departments believe 

the associated burden is exempt under 5 CFR 1320.3(h)(4). 

Facts or opinions submitted in response to general 

solicitations of comments from the public, published in the 

Federal Register or other publications, regardless of the 

form or format thereof, provided that no person is required 

to supply specific information pertaining to the commenter, 

other than that necessary for self-identification, as a 

condition of the agency’s full consideration of the comment 

are not subject to the PRA. 

 Paragraph (a)(2) of 31 CFR 33.112 and 45 CFR 155.1312 

require States with one or more Federally-recognized Indian 

tribes to consult with such tribes before submitting a 

section 1332 waiver application. Paragraph (a)(2)(iv)(B) 

of 31 CFR 33.108 and 45 CFR 155.1308 explain that 

documentation of the State’s public notice, which 

incorporates this consultation, must be included in the 

waiver application. 

 The burden associated with these requirements is both 

the time and effort necessary for a State to conduct its 

tribal consultations and the time and effort necessary to 

notify CMS of the State’s compliance with paragraph 
CMS-9987-P 34

(a)(2)(iv)(B) of 31 CFR 33.108 and 45 CFR 155.1308. The 

Departments estimate that each State submitting an 

application for a section 1332 waiver will require 40 hours 

to both conduct its tribal consultations and to submit the 

aforementioned evidence to CMS, at a total cost of $827. 

C. ICRs Regarding Monitoring and Compliance (31 CFR 33.120 

and 45 CFR 155.1320)

31 CFR 33.120 and 45 CFR 155.1320 of the proposed 

regulations require States to periodically perform reviews 

of the implementation of the section 1332 waiver. The 

Departments estimate that it will take a State 40 hours 

annually to periodically review the waiver’s 

implementation, at a total cost of $827. 

Paragraph (c) of 31 CFR 33.120 and 45 CFR 155.1320 of 

the proposed regulations further specifies that at least 6 

months after the implementation date of the waiver and 

annually thereafter, the State must hold a public forum to 

solicit comments on the progress of a section 1332 waiver. 

As proposed in paragraph(c)(1) of 31 CFR 33.120 and 45 CFR 

155.1320, the State must publish the date, time, and 

location of the public forum in a prominent location on the 

State’s public web site, at least 30 days prior to the date 

of the planned public forum. 

The burden associated with these provisions includes 

the time and effort necessary to conduct the public meeting 
CMS-9987-P 35

and the time and effort necessary for a State to publish 

the date, time, and location of the public forum in a 

prominent location on the State’s public web site, at least 

30 days prior to the date of the planned public forum. 

While these requirements are subject to the PRA, the 

Departments believe the associated burden is exempt from 

the PRA. As discussed previously in this collection, facts 

or opinions submitted in response to general solicitations 

of comments from the public, published in the Federal 

Register or other publications, regardless of the form or 

format thereof, provided that no person is required to 

supply specific information pertaining to the commenter, 

other than that necessary for self-identification, as a 

condition of the agency’s full consideration of the comment 

are not subject to the PRA. Therefore, the burden 

associated with the annual public hearing requirement is 

exempt. Similarly, the Departments believe the time and 

effort necessary for a State to publish the date, time, and 

location of the public forum in a prominent location on the 

State’s public web site is a burden that would be incurred 

in the course of usual and customary State business 

practices and is therefore exempt from the PRA under 5 CFR 

1320.3(b)(3). 

D. ICRs Regarding State Reporting Requirements (31 CFR 

33.124 and 45 CFR 155.1324) 
CMS-9987-P 36

 Paragraph (a) of 31 CFR 33.124 and 45 CFR 155.1324 of 

the proposed regulations requires States to submit 

quarterly reports to CMS in accordance with the terms and 

conditions of a State’s approved section 1332 waiver. The 

burden associated with this reporting requirement is the 

time and effort necessary to submit quarterly reports to 

CMS. The Departments estimate that it will take 10 hours 

per quarter for each State to comply with this reporting 

requirement, for a total of 40 hours per year, at a total 

annual cost of $827. 

 Paragraph (b) of 31 CFR 33.124 and 45 CFR 155.1324 of 

the proposed regulations requires States to submit annual 

reports to CMS documenting the information listed in 

paragraph (b)(1) through (4) of 31 CFR 33.124 and 45 CFR 

155.1324. As part of the submission process, paragraph (c) 

of 31 CFR 33.124 and 45 CFR 155.1324 requires States to 

submit draft annual reports to CMS no later than 90 days 

after the end of each waiver year, or as specified in the 

State’s terms and conditions. The burden associated with 

this reporting requirement is the time and effort necessary 

to submit draft annual reports to CMS. The Departments 

estimate that it will take 24 hours for each State to 

comply with this reporting requirement, at a total cost of 

$496. 
CMS-9987-P 37

 Paragraph (c)(1) of 31 CFR 33.124 and 45 CFR 155.1324 

of the proposed regulations specifies that within 60 days 

of receipt of comments from CMS, the State must submit to 

CMS the final annual report for the waiver year. While 

this requirement is subject to the PRA, the Departments 

believe the associated burden is exempt under 5 CFR 

1320.3(h)(9). Facts or opinions obtained or solicited 

through non-standardized follow-up questions designed to 

clarify responses to approved collections of information 

are not subject to the PRA. 

 Paragraph (c)(2) of 31 CFR 33.124 and 45 CFR 155.1324 

of the proposed regulations specify that the draft and 

final annual reports must be published on the State’s 

public web site. The burden associated with this is the 

time and effort required for a State to post the 

aforementioned information on the State’s public web site. 

The Departments estimate that it will take 2 hours for each 

State to comply with this requirement, at a total cost of 

$42. 

E. ICRs Regarding Periodic Evaluation Requirements (31 CFR 

33.128 and 45 CFR 155.1328)

31 CFR 33.128 and 45 CFR 155.1328 of the proposed 

regulations specify that the Secretary of Health and Human 

Services and the Secretary of the Treasury shall 

periodically evaluate the implementation of section 1332 
CMS-9987-P 38

waivers. One potential option for satisfying this 

requirement is for a State to design and conduct an 

evaluation, with Federal approval of the evaluation design 

and interim and final reports. The burden associated with 

this approach is the time and effort necessary to design 

and execute an evaluation for a section 1332 waiver. The 

Departments estimate that it will take a State 80 hours to 

develop an evaluation design, 80 hours to develop and 

submit an interim evaluation report, and 36 hours to 

publish CMS-approved evaluations on a State’s public web 

site. The Departments estimate that it will take a State 

196 hours over the course of a 5-year waiver term to 

complete these activities at a total cost of $4,051. 
CMS-9987-P 39

TABLE 1: Estimated Annual Recordkeeping and Reporting 

Burden 

Regulation 

Section(s) 

OMB 

Control 

No. Respondents Responses 

Burden per 

Response 

(hours) 

Total 

Annual 

Burden 

(hours) 

Hourly 

Labor 

Cost of 

Reporting 

($) 

Total 

Labor 

Cost of 

Reporting 

($) 

Total 

Capital/ 

Maintenance 

Costs ($) 

Total Cost 

($) 

31 CFR 33.108 

and 45 CFR 

155.1308 

0938-New X 1 200 n/a 20.67 n/a 0 n/a

Paragraph 

(a)(1) of 31 

CFR 33.112 

and 45 CFR 

155.1312 

0938-New X 1 40 n/a 20.67 n/a 0 n/a

Paragraph 

(a)(2) of 31 

CFR 33.112 

and 45 CFR 

155.1312 

0938-New X 1 40 n/a 20.67 n/a 0 n/a

Paragraph 

(b)(1) of 31 

CFR 33.120 

and 45 CFR 

155.1320 

0938-New X 1 40 n/a 20.67 n/a 0 n/a

Paragraph (a) 

of 31 CFR 

33.124 and 45 

CFR 155.1324 

0938-New X 4 10 n/a 20.67 n/a 0 n/a

Paragraph (b) 

of 31 CFR 

33.124 and 45 

CFR 155.1324 

0938-New X 1 24 n/a 20.67 n/a 0 n/a

Paragraph 

(c)(2) of 31 

CFR 33.124 

and 45 CFR 

155.1324 

0938-New X 1 2 n/a 20.67 n/a 0 n/a

31 CFR 33.128 

and 45 CFR 

155.1328 

0938-New X 1 196 n/a 20.67 n/a 0 n/a 

Total X 10 n/a n/a 0 n/a

If you comment on these information collection and 

recordkeeping requirements, please do either of the 

following: 

 1. Submit your comments electronically as specified 

in the ADDRESSES section of this proposed rule; or 

 2. Submit your comments to the Office of Information 

and Regulatory Affairs, Office of Management and Budget, 

 Attention: CMS Desk Officer, [CMS-9987-P]

 Fax: (202) 395-6974; or 
CMS-9987-P 40

 Email: OIRA_submission@omb.eop.gov

 An agency may not conduct or sponsor, and a person is 

not required to respond to, a collection of information 

unless it displays a control number assigned by OMB. 

IV. Response to Comments

Because of the large number of public comments the 

Departments normally receive on Federal Register documents, 

the Departments are not able to acknowledge or respond to 

them individually. The Departments will consider all 

comments the Departments receive by the date and time 

specified in the "DATES" section of this preamble, and, 

when the Departments proceed with a subsequent document, 

the Departments will respond to the comments in the 

preamble to that document.

V. Regulatory Impact Statement 

The Departments have examined the impacts of this 

proposed rule as required by Executive Order 13563 on 

Improving Regulation and Regulatory Review (January 18. 

2011), Executive Order 12866 on Regulatory Planning and 

Review (September 30, 1993), the Regulatory Flexibility Act 

(RFA) (5 U.S.C. 601 et seq.), section 202 of the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 104-4), Executive 

Order 13132 on Federalism (August 4, 1999), and the 

Congressional Review Act (5 U.S.C. 804(2)). 
CMS-9987-P 41

Executive Order 12866 directs agencies to assess all 

costs and benefits of available regulatory alternatives 

and, if regulation is necessary, to select regulatory 

approaches that maximize net benefits (including potential 

economic, environmental, public health and safety effects, 

distributive impacts, and equity). This rule has been 

designated a “significant regulatory action” although not 

economically significant, under section 3(f) of Executive 

Order 12866. Accordingly, the rule has been reviewed by 

the Office of Management and Budget. 

The RFA requires agencies to analyze options for 

regulatory relief for small entities, if a rule has a 

significant impact on a substantial number of small 

entities. For purposes of the RFA, small entities include 

small businesses, nonprofit organizations, and small 

governmental jurisdictions. Most hospitals and most other 

health care providers and suppliers are small entities, 

either by being nonprofit organizations or by meeting the 

SBA definition of a small business and having revenues of 

less than $7 million to $34.5 million in any 1 year. (For 

details, see the Small Business Administration's final rule 

that set forth size standards for health care industries, 

at 65 FR 69432, November 17, 2000). Individuals and States 

are not included in the definition of a small entity. The 

Departments are not preparing an analysis for the RFA 
CMS-9987-P 42

because the Departments have determined, and the 

Secretaries certify, that this proposed rule will not have 

a significant impact on a substantial number of small 

entities. 

Section 202 of the Unfunded Mandates Reform Act of 

1995 (UMRA) (Pub. L. 104-4) also requires that agencies 

assess anticipated costs and benefits before issuing any 

rule whose mandates require spending in any 1 year of $100 

million in 1995 dollars, updated annually for inflation. 

In 2011, that threshold is approximately $136 million. 

Because this rule does not mandate State participation in 

section 1332 waivers, there is no obligation for the State 

to make any change to their existing programs. As a 

result, there is no mandate for the State. Therefore, the 

Departments estimate this rule will not mandate 

expenditures in the threshold amount of $136 million in any 

1 year. 

Executive Order 13132 establishes certain requirements 

that an agency must meet when it promulgates a proposed 

rule (and subsequent final rule) that imposes substantial 

direct requirement costs on State and local governments, 

preempts State law, or otherwise has Federalism 

implications. Since this regulation would not impose costs 

on State or local governments, the requirements of 

Executive Order 13132 are not applicable. In accordance 
CMS-9987-P 43

with the provisions of Executive Order 12866, this 

regulation was reviewed by the Office of Management and 

Budget. 
CMS-9987-P 44

List of Subjects 

31 CFR Part 33 

Health care, Health insurance, Reporting and 

Recordkeeping requirements. 

45 CFR Part 155 

Health care, Health insurance, Reporting and 

Recordkeeping requirements. 
CMS-9987-P 45

Department of the Treasury 

31 CFR Subtitle A 

For the reasons set forth in the preamble, the 

Department of the Treasury proposes to amend 31 CFR 

subtitle A to add new part 33 to read as follows: 

PART 33--WAIVERS FOR STATE INNOVATION 

Sec. 

33.100 Basis and purpose. 

33.102 Coordinated waiver process. 

33.104 Definitions. 

33.108 Application procedures. 

33.112 State public notice requirements. 

33.116 Federal public notice and approval process. 

33.120 Monitoring and compliance. 

33.124 State reporting requirements. 

33.128 Periodic evaluation requirements. 

Authority: Sec. 1332, Pub. L. 111-148, 124 Stat. 119 

 

§33.100 Basis and purpose. 

(a) Statutory basis. This part implements provisions 

of section 1332 of the Patient Protection and Affordable 

Care Act (Affordable Care Act), Pub. L. 111-148, relating 

to Waivers for State Innovation, which the Secretary may 

authorize for plan years beginning on or after 

January 1, 2017. Section 1332 of the Affordable Care Act 
CMS-9987-P 46

requires the Secretary to issue regulations that provide 

for all of the following: 

(1) A process for public notice and comment at the 

State level, including public hearings, sufficient to 

ensure a meaningful level of public input. 

(2) A process for the submission of an application 

that ensures the disclosure of all of the following: 

(i) The provisions of law that the State involved 

seeks to waive. 

(ii) The specific plans of the State to ensure that 

the waiver will meet all requirements specified in section 

1332 of the Affordable Care Act. 

(3) A process for the provision of public notice and 

comment after a waiver application is received by the 

Secretary of Health and Human Services, that is sufficient 

to ensure a meaningful level of public input and that does 

not impose requirements that are in addition to, or 

duplicative of, requirements imposed under the 

Administrative Procedures Act, or requirements that are 

unreasonable or unnecessarily burdensome with respect to 

State compliance. 

(4) A process for the submission of reports to the 

Secretary by a State relating to the implementation of a 

waiver. 
CMS-9987-P 47

(5) A process for the periodic evaluation by the 

Secretary of programs under waivers. 

(b) Purpose. This part sets forth certain procedural 

requirements for Waivers for State Innovation under section 

1332 of the Affordable Care Act. 

§33.102 Coordinated waiver process. 

(a) Coordination with applications for waivers under 

other Federal laws. A State may submit a single 

application to the Secretary of Health and Human Services 

for a waiver under section 1332 of the Affordable Care Act 

and a waiver under one or more of the existing waiver 

processes applicable under titles XVIII, XIX, and XXI of 

the Social Security Act, or under any other Federal law 

relating to the provision of health care items or services, 

provided that such application is consistent with the 

procedures described in this part, the procedures for 

section 1115 demonstrations, if applicable, and the 

procedures under any other applicable Federal law under 

which the State seeks a waiver. 

(b) Coordinated process for section 1332 waivers. A 

State seeking a section 1332 waiver must submit a waiver 

application to the Secretary of Health and Human Services. 

Any application submitted to the Secretary of Health and 

Human Services that requests to waive sections 36B, 4980H, 

and 5000A of the Internal Revenue Code, in accordance with 
CMS-9987-P 48

section 1332(a)(2)(D) of the Affordable Care Act, shall 

upon receipt be transmitted by the Secretary of Health and 

Human Services to the Secretary to be reviewed in 

accordance with 31 CFR Part 33. 

§33.104 Definitions. 

For the purposes of this part: 

Complete application means an application that has 

been submitted and for which the Secretary and the 

Secretary of Health and Human Services have made a 

preliminary determination that it includes all required 

information and satisfies all requirements that are 

described in §33.108(a)(2)(iv). 

Public notice means a notice issued by a government 

agency or legislative body that contains sufficient detail 

to notify the public at large of a proposed action 

consistent with §33.112. 

Section 1332 waiver means a Waiver for State 

Innovation under section 1332 of the Affordable Care Act. 

§33.108 Application procedures. 

(a) Initial waiver applications -- (1) Acceptable 

formats for applications. (i) Applications for initial 

approval of a section 1332 waiver shall be submitted in 

both printed and electronic formats to the Secretary of 

Health and Human Services. 

(ii) [Reserved] 
CMS-9987-P 49

(2) Guidelines for applications. (i) Each application 

for a section 1332 waiver will be subject to a preliminary 

review by the Secretary and the Secretary of Health and 

Human Services, who will make a preliminary determination 

that the application is complete. A submitted application 

will not be deemed received until the Secretary and the 

Secretary of Health and Human Services have made the 

preliminary determination that the application is complete. 

(A) The Secretary and the Secretary of Health and 

Human Services will complete the preliminary review of the 

application within 45 days after it is submitted. 

(B) If the Secretary and the Secretary of Health and 

Human Services determine that the application is not 

complete, the Secretary of Health and Human Services will 

send the State a written notice of the elements missing 

from the application. 

(C) The preliminary determination that an application 

is complete does not preclude a finding during the 180-day 

Federal decision-making period that a necessary element of 

the application is missing or insufficient. 

(ii) Upon making the preliminary determination that an 

application is complete, as defined in this part, the 

Secretary of Health and Human Services will send the State 

a written notice informing the State that the Secretary and 

the Secretary of Health and Human Services have made such a 
CMS-9987-P 50

preliminary determination. That date will also mark the 

beginning of the Federal public notice process and the 180-

day Federal decision-making period. 

(iii) Upon receipt of a complete application for an 

initial section 1332 waiver, the Secretary of Health and 

Human Services will-- 

(A) Make available to the public the application, and 

all related State submissions, including all supplemental 

information received from the State following the receipt 

of a complete application for a section 1332 waiver. 

(B) Indicate the status of the application. 

(iv) An application for initial approval of a section 

1332 waiver will not be considered complete unless the 

application meets all of the following conditions: 

(A) Complies with paragraph (a) of this section. 

(B) Provides written evidence of the State’s 

compliance with the public notice requirements set forth in 

§33.112. 

(C) Provides all of the following: 

(1) A comprehensive description of the State 

legislation and program to implement a plan meeting the 

requirements for a waiver under section 1332; 

(2) A copy of the enacted State legislation 

authorizing such waiver request, as required under section 

1332(a)(1)(C) of the Affordable Care Act; 
CMS-9987-P 51

(3) A list of the provisions of law that the State 

seeks to waive, including a brief description of the reason 

for the specific requests; and 

(4) The analyses, actuarial certifications, data, 

assumptions, analysis, targets and other information set 

forth in paragraph (a)(2)(iv)(D) of this section sufficient 

to provide the Secretary and the Secretary of Health and 

Human Services with the necessary data to determine that 

the State’s proposed waiver: 

(i) Will, as required under section 1332(b)(1)(A) of 

the Affordable Care Act (the comprehensive coverage 

requirement), provide coverage that is at least as 

comprehensive as the coverage defined in section 1302(b) of 

the Affordable Care Act and offered through Exchanges 

established under the Affordable Care Act as certified by 

the Office of the Actuary of the Centers for Medicare and 

Medicaid Services based on sufficient data from the State 

and from comparable States about their experience with 

programs created by the Affordable Care Act and the 

provisions of the Affordable Care Act that the State seeks 

to waive; 

(ii) Will, as required under section 1332(b)(1)(B) of 

the Affordable Care Act (the affordability requirement), 

provide coverage and cost sharing protections against 

excessive out-of-pocket spending that are at least as 
CMS-9987-P 52

affordable as the provisions of Title I of the Affordable 

Care Act would provide; 

(iii) Will, as required under section 1332(b)(1)(C) of 

the Affordable Care Act (the scope of coverage 

requirement), provide coverage to at least a comparable 

number of its residents as the provisions of Title I of the 

Affordable Care Act would provide; and 

(iv) Will not, as prohibited under section 

1332(b)(1)(D) of the Affordable Care Act (the Federal 

deficit requirement), increase the Federal deficit. 

(D) Contains the following supporting information: 

(1) Actuarial analyses and actuarial certifications. 

Actuarial analyses and actuarial certifications to support 

the State’s estimates that the proposed waiver will comply 

with the comprehensive coverage requirement, the 

affordability requirement, and the scope of coverage 

requirement. 

(2) Economic analyses. Economic analyses to support 

the State’s estimates that the proposed waiver will comply 

with the comprehensive coverage requirement, the 

affordability requirement, the scope of coverage 

requirement and the Federal deficit requirement, including: 

(i) A detailed 10-year budget plan that is deficit 

neutral to the Federal government, as prescribed by section 

1332(a)(1)(B)(ii) of the Affordable Care Act, and includes 
CMS-9987-P 53

all costs under the waiver, including administrative costs 

and other costs to the Federal government, if applicable; 

and 

(ii) A detailed analysis regarding the estimated 

impact of the waiver on health insurance coverage in the 

State. 

(3) Data and assumptions. The data and assumptions 

used to demonstrate that the State’s proposed waiver is in 

compliance with the comprehensive coverage requirement, the 

affordability requirement, the scope of coverage 

requirement and the Federal deficit requirement, including: 

(i) Information on the age, income, health expenses 

and current health insurance status of the relevant State 

population; the number of employers by number of employees 

and whether the employer offers insurance; crosstabulations of these variables; and an explanation of data 

sources and quality; and 

(ii) An explanation of the key assumptions used to 

develop the estimates of the effect of the waiver on 

coverage and the Federal budget, such as individual and 

employer participation rates, behavioral changes, premium 

and price effects, and other relevant factors. 

(4) Additional information. Additional information 

supporting the State's proposed waiver, including: 
CMS-9987-P 54

(i) An explanation as to whether the waiver increases 

or decreases the administrative burden on individuals, 

insurers, and employers, and if so, how and why; 

(ii) An explanation of how the waiver will affect the 

implementation of the provisions of the Affordable Care Act 

which the State is not requesting to waive in the State and 

at the Federal level; 

(iii) An explanation of how the waiver will affect 

residents who need to obtain health care services out-ofState, as well as the States in which such residents may 

seek such services; 

(iv) If applicable, an explanation as to how the State 

will provide the Federal government with all information 

necessary to administer the waiver at the Federal level; 

and 

(v) An explanation of how the State’s proposal will 

address potential individual, employer, insurer, or 

provider compliance, waste, fraud and abuse within the 

State or in other States. 

(5) Reporting targets. Quarterly, annual, and 

cumulative targets for the comprehensive coverage 

requirement, the affordability requirement, the scope of 

coverage requirement, and the Federal deficit requirement. 
CMS-9987-P 55

(6) Other information. Other information consistent 

with guidance provided by the Secretary and the Secretary 

of Health and Human Services. 

(b) Additional supporting information. (1) During the 

Federal review process, the Secretary may request 

additional supporting information from the State as needed 

to address public comments or to address issues that arise 

in reviewing the application. 

(2) Requests for additional information, and responses 

to such requests, will be made available to the public in 

the same manner as information described in §33.116(b). 

§33.112 State public notice requirements. 

(a) General. (1) Prior to submitting an application 

for a new section 1332 waiver to the Secretary of Health 

and Human Services for review and consideration, a State 

must provide a public notice and comment period sufficient 

to ensure a meaningful level of public input for the 

application for a section 1332 waiver. 

(2) Such public notice and comment period shall 

include, for a State with one or more Federally-recognized 

Indian tribes within its borders, a separate process for 

meaningful consultation with such tribes. 

(b) Public notice and comment period. The State shall 

make available at the beginning of the public notice and 

comment period, through its web site or other effective 
CMS-9987-P 56

means of communication, and shall update as appropriate, a 

public notice that includes all of the following: 

(1) A comprehensive description of the application for 

a section 1332 waiver to be submitted to the Secretary of 

Health and Human Services including information and 

assurances related to all statutory requirements and other 

information consistent with guidance provided by the 

Secretary and the Secretary of Health and Human Services. 

(2) Information relating to where copies of the 

application for a section 1332 waiver are available for 

public review and comment. 

(3) Information relating to how and where written 

comments may be submitted and reviewed by the public, and 

the timeframe during which comments will be accepted. 

(4) The location, date, and time of public hearings 

that will be convened by the State to seek public input on 

the application for a section 1332 waiver. 

(c) Public hearings. (1) After issuing the public 

notice and prior to submitting an application for a new 

section 1332 waiver, a State must conduct public hearings 

regarding the State's application. 

(2) Such public hearings shall provide an interested 

party the opportunity to learn about and comment on the 

contents of the application for a section 1332 waiver. 
CMS-9987-P 57

(d) Submission of initial application. After the 

State public notice and comment period has concluded, the 

State may submit an application to the Secretary of Health 

and Human Services for an initial waiver in accordance with 

the requirements set forth in §33.108. 

§33.116 Federal public notice and approval process. 

(a) General. The Federal public notice and approval 

process begins on the first business day after the 

Secretary and the Secretary of Health and Human Services 

determine that all elements for a complete application were 

documented and submitted to the Secretary of Health and 

Human Services. 

(b) Public notice and comment period. (1) Following a 

determination that a State’s application for a section 1332 

waiver is complete, the Secretary and the Secretary of 

Health and Human Services will provide for a public notice 

and comment period that is sufficient to ensure a 

meaningful level of public input and that does not impose 

requirements that are in addition to, or duplicative of, 

requirements imposed under the Administrative Procedures 

Act, or requirements that are unreasonable or unnecessarily 

burdensome with respect to State compliance. 

(2) At the beginning of the Federal notice and comment 

period, the Secretary of Health and Human Services will 

make available through its web site and otherwise, and 
CMS-9987-P 58

shall update as appropriate, public notice that includes 

all of the following: 

(i) The complete application for a section 1332 

waiver, updates for the status of the State’s application, 

and any supplemental materials received from the State 

prior to and during the Federal public notice and comment 

period. 

(ii) Information relating to where copies of the 

application for a section 1332 waiver are available for 

public review and comment. 

(iii) Information relating to how and where written 

comments may be submitted and reviewed by the public, and 

the timeframe during which comments will be accepted. 

(iv) Any public comments received during the Federal 

public notice and comment period. 

(c) Approval of a section 1332 waiver application. 

The final decision of the Secretary and the Secretary of 

Health and Human Services on a State application for a 

section 1332 waiver will be issued by the Secretary of 

Health and Human Services no later than 180 days after the 

determination by the Secretary and the Secretary of Health 

and Human Services that a complete application was received 

in accordance with §33.108. 

§33.120 Monitoring and compliance.

(a) General. (1) Following the issuance of a final 
CMS-9987-P 59

decision to approve a section 1332 waiver by the Secretary 

and the Secretary of Health and Human Services, a State 

must comply with all applicable Federal laws, regulations, 

interpretive policy statements and interpretive guidance 

unless expressly waived. A State must, within the 

timeframes specified in law, regulation, policy, or 

guidance, come into compliance with any changes in Federal 

law, regulation, or policy affecting section 1332 waivers, 

unless the provision being changed is expressly waived. 

(2) A State must comply with the terms and conditions 

of the agreement between the Secretary, the Secretary of 

Health and Human Services, and the State to implement a 

section 1332 waiver. 

(b) Implementation reviews. (1) The terms and 

conditions of an approved section 1332 waiver will provide 

that the State will perform periodic reviews of the 

implementation of the section 1332 waiver. 

(2) The Secretary and the Secretary of Health and 

Human Services will review documented complaints that a 

State is failing to comply with requirements specified in 

the terms and conditions of any approved section 1332 

waiver. 

(3) The Secretary and the Secretary of Health and 

Human Services will promptly share with a State any 

complaint that the Secretary and the Secretary of Health 
CMS-9987-P 60

and Human Services has received and will also provide 

notification of any applicable monitoring and compliance 

issues. 

(c) Post award. Within 6 months after the 

implementation date of a section 1332 waiver and annually 

thereafter, a State must hold a public forum to solicit 

comments on the progress of a section 1332 waiver. The 

State must hold the public forum at which members of the 

public have an opportunity to provide comments and must 

provide a summary of the forum to the Secretary of Health 

and Human Services as part of the quarterly report 

specified in §33.124(a) that is associated with the quarter 

in which the forum was held, as well as in the annual 

report specified in §33.124(b) that is associated with the 

year in which the forum was held. 

(1) The State must publish the date, time, and 

location of the public forum in a prominent location on the 

State’s public web site, at least 30 days prior to the date 

of the planned public forum. 

(2) [Reserved] 

(d) Terminations and suspensions. The Secretary and 

the Secretary of Health and Human Services reserve the 

right to suspend or terminate a section 1332 waiver in 

whole or in part, at any time before the date of 

expiration, whenever the Secretaries determine that a State 
CMS-9987-P 61

has materially failed to comply with the terms of a section 

1332 waiver. 

(e) Closeout costs. If all or part of a section 1332 

waiver is terminated or suspended, or if a portion of a 

section 1332 waiver is withdrawn, Federal funding is 

limited to normal closeout costs associated with an orderly 

termination, suspension, or withdrawal, including service 

costs during any approved transition period, and 

administrative costs of disenrolling participants. 

(f) Federal evaluators. (1) A State must fully 

cooperate with the Secretary, the Secretary of Health and 

Human Services, or an independent evaluator selected by the 

Secretary or the Secretary of Health and Human Services to 

undertake an independent evaluation of any component of a 

section 1332 waiver. 

(2) As part of this required cooperation, a State must 

submit all requested data and information to the Secretary, 

the Secretary of Health and Human Services, or the 

independent evaluator. 

§33.124 State reporting requirements. 

(a) Quarterly reports. A State must submit quarterly 

reports to the Secretary of Health and Human Services in 

accordance with the terms and conditions of the State’s 

section 1332 waiver. These quarterly reports must include, 

but are not limited to, reports of any ongoing operational 
CMS-9987-P 62

challenges and plans for and results of associated 

corrective actions. 

(b) Annual reports. A State must submit an annual 

report to the Secretary of Health and Human Services 

documenting all of the following: 

(1) The progress of the section 1332 waiver. 

(2) Data on compliance with section 1332(b)(1)(A) 

through (D) of the Affordable Care Act. 

(3) A summary of the annual post-award public forum, 

held in accordance with §33.120(c), including all public 

comments received at such forum regarding the progress of 

the section 1332 waiver and action taken in response to 

such concerns or comments. 

(4) Other information consistent the State’s approved 

terms and conditions. 

(c) Submitting and publishing annual reports. A State 

must submit a draft annual report to the Secretary of 

Health and Human Services no later than 90 days after the 

end of each waiver year, or as specified in the waiver’s 

terms and conditions. 

(1) Within 60 days of receipt of comments from the 

Secretary of Health and Human Services, a State must submit 

to the Secretary of Health and Human Services a final 

annual report for the waiver year. 
CMS-9987-P 63

(2) The draft and final annual reports are to be 

published on a State’s public web site within 30 days of 

submission and approval to the Secretary of Health and 

Human Services, respectively. 

§33.128 Periodic evaluation requirements. 

 (a) General. (1) The Secretary and the Secretary of 

Health and Human Services shall periodically evaluate the 

implementation of a program under a section 1332 waiver 

consistent with guidance published by the Secretary and the 

Secretary of Health and Human Services and any terms and 

conditions governing the section 1332 waiver. 

(2) Each periodic evaluation must include a review of 

the annual report or reports submitted by the State in 

accordance with §33.124 that relate to the period of time 

covered by the evaluation. 
CMS-9987-P 64

Department of Health and Human Services 

45 CFR Subtitle A 

For the reasons set forth in the preamble, the 

Department of Health and Human Services proposes to amend 

45 CFR subtitle A, subchapter B to add new Part 155 to read 

as follows: 

PART 155--WAIVERS FOR STATE INNOVATION 

Subparts A through M [Reserved] 

Subpart N – State Flexibility 

Sec. 

155.1300 Basis and purpose. 

155.1302 Coordinated waiver process. 

155.1304 Definitions. 

155.1308 Application procedures. 

155.1312 State public notice requirements. 

155.1316 Federal public notice and approval process. 

155.1320 Monitoring and compliance. 

155.1324 State reporting requirements. 

155.1328 Periodic evaluation requirements. 

Authority: Sec. 1332, Pub. L. 111-148, 124 Stat. 119 

Subparts A through M [Reserved] 

Subpart N – State Flexibility 

§155.1300 Basis and purpose. 

(a) Statutory basis. This subpart implements 

provisions of section 1332 of the Patient Protection and 
CMS-9987-P 65

Affordable Care Act (Affordable Care Act), Pub. L. 111-148, 

relating to Waivers for State Innovation, which the 

Secretary may authorize for plan years beginning on or 

after January 1, 2017. Section 1332 of the Affordable Care 

Act requires the Secretary to issue regulations that 

provide for all of the following: 

(1) A process for public notice and comment at the 

State level, including public hearings, sufficient to 

ensure a meaningful level of public input. 

(2) A process for the submission of an application 

that ensures the disclosure of all of the following: 

(i) The provisions of law that the State involved 

seeks to waive. 

(ii) The specific plans of the State to ensure that 

the waiver will meet all requirements specified in section 

1332. 

(3) A process for the provision of public notice and 

comment after a waiver application is received by the 

Secretary, that is sufficient to ensure a meaningful level 

of public input and that does not impose requirements that 

are in addition to, or duplicative of, requirements imposed 

under the Administrative Procedures Act, or requirements 

that are unreasonable or unnecessarily burdensome with 

respect to State compliance. 
CMS-9987-P 66

(4) A process for the submission of reports to the 

Secretary by a State relating to the implementation of a 

waiver. 

(5) A process for the periodic evaluation by the 

Secretary of programs under waivers. 

(b) Purpose. This subpart sets forth certain 

procedural requirements for Waivers for State Innovation 

under section 1332 of the Affordable Care Act. 

§155.1302 Coordinated waiver process. 

(a) Coordination with applications for waivers under 

other Federal laws. A State may submit a single 

application to the Secretary for a waiver under section 

1332 of the Affordable Care Act and a waiver under one or 

more of the existing waiver processes applicable under 

titles XVIII, XIX, and XXI of the Social Security Act, or 

under any other Federal law relating to the provision of 

health care items or services, provided that such 

application is consistent with the procedures described in 

this part, the procedures for section 1115 demonstrations, 

if applicable, and the procedures under any other 

applicable Federal law under which the State seeks a 

waiver. 

(b) Coordinated process for section 1332 waivers. A 

State seeking a section 1332 waiver must submit a waiver 

application to the Secretary. Any application submitted to 
CMS-9987-P 67

the Secretary that requests to waive sections 36B, 4980H, 

and 5000A of the Internal Revenue Code, in accordance with 

section 1332(a)(2)(D) of the Affordable Care Act, shall 

upon receipt be transmitted by the Secretary to the 

Secretary of the Treasury to be reviewed in accordance with 

31 CFR Part 33. 

§155.1304 Definitions. 

For the purposes of this subpart: 

Complete application means an application that has 

been submitted and for which the Secretary and the 

Secretary of the Treasury have made a preliminary 

determination that it includes all required information and 

satisfies all requirements that are described in 

§155.1308(a)(2)(iv). 

Public notice means a notice issued by a government 

agency or legislative body that contains sufficient detail 

to notify the public at large of a proposed action 

consistent with §155.1312. 

Section 1332 waiver means a Waiver for State 

Innovation under section 1332 of the Affordable Care Act. 

§155.1308 Application procedures. 

(a) Initial waiver applications -- (1) Acceptable 

formats for applications. (i) Applications for initial 

approval of a section 1332 waiver shall be submitted in 

both printed and electronic formats to the Secretary. 
CMS-9987-P 68

(ii) [Reserved] 

(2) Guidelines for applications. (i) Each application 

for a section 1332 waiver will be subject to a preliminary 

review by the Secretary and the Secretary of the Treasury 

will make a preliminary determination that the application 

is complete. A submitted application will not be deemed 

received until the Secretary and the Secretary of the 

Treasury have made the preliminary determination that the 

application is complete. 

(A) The Secretary and the Secretary of the Treasury 

will complete the preliminary review of the application 

within 45 days after it is submitted. 

(B) If the Secretary and the Secretary of the Treasury 

determine that the application is not complete, the 

Secretary will send the State a written notice of the 

elements missing from the application. 

(C) The preliminary determination that an application 

is complete does not preclude a finding during the 180-day 

Federal decision-making period that a necessary element of 

the application is missing or insufficient. 

(ii) Upon making the preliminary determination that an 

application is complete, as defined in this part, the 

Secretary will send the State a written notice informing 

the State that the Secretary and the Secretary of the 

Treasury have made such a preliminary determination. That 
CMS-9987-P 69

date will also mark the beginning of the Federal public 

notice process and the 180-day Federal decision-making 

period. 

(iii) Upon receipt of a complete application for an 

initial section 1332 waiver, the Secretary will-- 

(A) Make available to the public the application, and 

all related State submissions, including all supplemental 

information received from the State following the receipt 

of a complete application for a section 1332 waiver. 

(B) Indicate the status of the application. 

(iv) An application for initial approval of a section 

1332 waiver will not be considered complete unless the 

application meets all of the following conditions: 

(A) Complies with paragraph (a) of this section. 

(B) Provides written evidence of the State’s 

compliance with the public notice requirements set forth in 

§155.1312. 

(C) Provides all of the following: 

(1) A comprehensive description of the State 

legislation and program to implement a plan meeting the 

requirements for a waiver under section 1332; 

(2) A copy of the enacted State legislation 

authorizing such waiver request, as required under section 

1332(a)(1)(C) of the Affordable Care Act; 
CMS-9987-P 70

(3) A list of the provisions of law that the State 

seeks to waive including a brief description of the reason 

for the specific requests; and 

(4) The analyses, actuarial certifications, data, 

assumptions, analysis, targets and other information set 

forth in paragraph (a)(2)(iv)(D) of this section sufficient 

to provide the Secretary and the Secretary of the Treasury 

with the necessary data to determine that the State’s 

proposed waiver: 

(i) Will, as required under section 1332(b)(1)(A) of 

the Affordable Care Act (the comprehensive coverage 

requirement), provide coverage that is at least as 

comprehensive as the coverage defined in section 1302(b) of 

the Affordable Care Act and offered through Exchanges 

established under the Affordable Care Act as certified by 

the Office of the Actuary of the Centers for Medicare and 

Medicaid Services based on sufficient data from the State 

and from comparable States about their experience with 

programs created by the Affordable Care Act and the 

provisions of the Affordable Care Act that the State seeks 

to waive; 

(ii) Will, as required under section 1332(b)(1)(B) of 

the Affordable Care Act (the affordability requirement), 

provide coverage and cost sharing protections against 

excessive out-of-pocket spending that are at least as 
CMS-9987-P 71

affordable as the provisions of Title I of the Affordable 

Care Act would provide; 

(iii) Will, as required under section 1332(b)(1)(C) of 

the Affordable Care Act (the scope of coverage 

requirement), provide coverage to at least a comparable 

number of its residents as the provisions of Title I of the 

Affordable Care Act would provide; and 

(iv) Will not, as prohibited under section 

1332(b)(1)(D) of the Affordable Care Act (the Federal 

deficit requirement), increase the Federal deficit. 

(D) Contains the following supporting information: 

(1) Actuarial analyses and actuarial certifications. 

Actuarial analyses and actuarial certifications to support 

the State’s estimates that the proposed waiver will comply 

with the comprehensive coverage requirement, the 

affordability requirement, and the scope of coverage 

requirement; 

(2) Economic analyses. Economic analyses to support 

the State’s estimates that the proposed waiver will comply 

with the comprehensive coverage requirement, the 

affordability requirement, the scope of coverage 

requirement and the Federal deficit requirement, including: 

(i) A detailed 10-year budget plan that is deficit 

neutral to the Federal government, as prescribed by section 

1332(a)(1)(B)(ii) of the Affordable Care Act, and includes 
CMS-9987-P 72

all costs under the waiver, including administrative costs 

and other costs to the Federal government, if applicable; 

and 

(ii) A detailed analysis regarding the estimated 

impact of the waiver on health insurance coverage in the 

State. 

(3) Data and assumptions. The data and assumptions 

used to demonstrate that the State’s proposed waiver is in 

compliance with the comprehensive coverage requirement, the 

affordability requirement, the scope of coverage 

requirement and the Federal deficit requirement, including: 

(i) Information on the age, income, health expenses 

and current health insurance status of the relevant State 

population; the number of employers by number of employees 

and whether the employer offers insurance; crosstabulations of these variables; and an explanation of data 

sources and quality; and 

(ii) An explanation of the key assumptions used to 

develop the estimates of the effect of the waiver on 

coverage and the Federal budget, such as individual and 

employer participation rates, behavioral changes, premium 

and price effects, and other relevant factors. 

(4) Additional information. Additional information 

supporting the State's proposed waiver, including: 
CMS-9987-P 73

(i) An explanation as to whether the waiver increases 

or decreases the administrative burden on individuals, 

insurers, and employers, and if so, how and why; 

(ii) An explanation of how the waiver will affect the 

implementation of the provisions of the Affordable Care Act 

which the State is not requesting to waive in the State and 

at the Federal level; 

(iii) An explanation of how the waiver will affect 

residents who need to obtain health care services out-ofState, as well as the States in which such residents may 

seek such services; 

(iv) If applicable, an explanation as to how the State 

will provide the Federal government with all information 

necessary to administer the waiver at the Federal level; 

and 

(v) An explanation of how the State’s proposal will 

address potential individual, employer, insurer, or 

provider compliance, waste, fraud and abuse within the 

State or in other States. 

(5) Reporting targets. Quarterly, annual, and 

cumulative targets for the comprehensive coverage 

requirement, the affordability requirement, the scope of 

coverage requirement and the Federal deficit requirement. 
CMS-9987-P 74

(6) Other information. Other information consistent 

with guidance provided by the Secretary and the Secretary 

of the Treasury. 

(b) Additional supporting information. (1) During the 

Federal review process, the Secretary may request 

additional supporting information from the State as needed 

to address public comments or to address issues that arise 

in reviewing the application. 

(2) Requests for additional information, and responses 

to such requests, will be made available to the public in 

the same manner as information described in §155.1316(b). 

§155.1312 State public notice requirements. 

(a) General. (1) Prior to submitting an application 

for a new section 1332 waiver to the Secretary for review 

and consideration, a State must provide a public notice and 

comment period sufficient to ensure a meaningful level of 

public input for the application for a section 1332 waiver. 

(2) Such public notice and comment period shall 

include, for a State with one or more Federally-recognized 

Indian tribes within its borders, a separate process for 

meaningful consultation with such tribes. 

(b) Public notice and comment period. The State shall 

make available at the beginning of the public notice and 

comment period, through its web site or other effective 
CMS-9987-P 75

means of communication, and shall update as appropriate, a 

public notice that includes all of the following: 

(1) A comprehensive description of the application for 

a section 1332 waiver to be submitted to the Secretary 

including information and assurances related to all 

statutory requirements and other information consistent 

with guidance provided by the Secretary and the Secretary 

of the Treasury. 

(2) Information relating to where copies of the 

application for a section 1332 waiver are available for 

public review and comment. 

(3) Information relating to how and where written 

comments may be submitted and reviewed by the public, and 

the timeframe during which comments will be accepted. 

(4) The location, date, and time of public hearings 

that will be convened by the State to seek public input on 

the application for a section 1332 waiver. 

(c) Public hearings. (1) After issuing the public 

notice and prior to submitting an application for a new 

section 1332 waiver, a State must conduct public hearings 

regarding the State's application. 

(2) Such public hearings shall provide an interested 

party the opportunity to learn about and comment on the 

contents of the application for a section 1332 waiver. 
CMS-9987-P 76

(d) Submission of initial application. After the 

State public notice and comment period has concluded, the 

State may submit an application to the Secretary for an 

initial waiver in accordance with the requirements set 

forth in §155.1308. 

§155.1316 Federal public notice and approval process. 

(a) General. The Federal public notice and approval 

process begins on the first business day after the 

Secretary and the Secretary of the Treasury determine that 

all elements for a complete application were documented and 

submitted to the Secretary. 

(b) Public notice and comment period. (1) Following a 

determination that a State’s application for a section 1332 

waiver is complete, the Secretary and the Secretary of the 

Treasury will provide for a public notice and comment 

period that is sufficient to ensure a meaningful level of 

public input and that does not impose requirements that are 

in addition to, or duplicative of, requirements imposed 

under the Administrative Procedures Act, or requirements 

that are unreasonable or unnecessarily burdensome with 

respect to State compliance. 

(2) At the beginning of the Federal notice and comment 

period, the Secretary will make available through its web 

site and otherwise, and shall update as appropriate, public 

notice that includes all of the following:
CMS-9987-P 77

(i) The complete application for a section 1332 

waiver, updates for the status of the State’s application, 

and any supplemental materials received from the State 

prior to and during the Federal public notice and comment 

period. 

(ii) Information relating to where copies of the 

application for a section 1332 waiver are available for 

public review and comment. 

(iii) Information relating to how and where written 

comments may be submitted and reviewed by the public, and 

the timeframe during which comments will be accepted. 

(iv) Any public comments received during the Federal 

public notice and comment period. 

(c) Approval of a section 1332 waiver application. The 

final decision of the Secretary and the Secretary of the 

Treasury on a State application for a section 1332 waiver 

will be issued by the Secretary no later than 180 days 

after the determination by the Secretary and the Secretary 

of the Treasury that a complete application was received in 

accordance with §155.1308. 

§155.1320 Monitoring and compliance.

(a) General. (1) Following the issuance of a final 

decision to approve a section 1332 waiver by the Secretary 

and the Secretary of the Treasury, a State must comply with 

all applicable Federal laws, regulations, interpretive 
CMS-9987-P 78

policy statements and interpretive guidance unless 

expressly waived. A State must, within the timeframes 

specified in law, regulation, policy or guidance, come into 

compliance with any changes in Federal law, regulation, or 

policy affecting section 1332 waivers, unless the provision 

being changed is expressly waived. 

(2) A State must comply with the terms and conditions 

of the agreement between the Secretary, the Secretary of 

the Treasury, and the State to implement a section 1332 

waiver. 

(b) Implementation reviews. (1) The terms and 

conditions of an approved section 1332 waiver will provide 

that the State will perform periodic reviews of the 

implementation of the section 1332 waiver. 

(2) The Secretary and the Secretary of the Treasury 

will review documented complaints that a State is failing 

to comply with requirements specified in the terms and 

conditions of any approved section 1332 waiver. 

(3) The Secretary and the Secretary of the Treasury 

will promptly share with a State any complaint that the 

Secretary and the Secretary of the Treasury has received 

and will also provide notification of any applicable 

monitoring and compliance issues. 

(c) Post award. Within at least 6 months after the 

implementation date of a section 1332 waiver and annually 
CMS-9987-P 79

thereafter, a State must hold a public forum to solicit 

comments on the progress of a section 1332 waiver. The 

State must hold the public forum at which members of the 

public have an opportunity to provide comments and must 

provide a summary of the forum to the Secretary as part of 

the quarterly report specified in §155.1324(a) that is 

associated with the quarter in which the forum was held, as 

well as in the annual report specified in §155.1324(b) that 

is associated with the year in which the forum was held. 

(1) The State must publish the date, time, and 

location of the public forum in a prominent location on the 

State’s public web site, at least 30 days prior to the date 

of the planned public forum. 

(2) [Reserved] 

(d) Terminations and suspensions. The Secretary and 

the Secretary of the Treasury reserve the right to suspend 

or terminate a section 1332 waiver in whole or in part, at 

any time before the date of expiration, whenever the 

Secretaries determine that a State has materially failed to 

comply with the terms of a section 1332 waiver. 

(e) Closeout costs. If all or part of a section 1332 

waiver is terminated or suspended, or if a portion of a 

section 1332 waiver is withdrawn, Federal funding is 

limited to normal closeout costs associated with an orderly 

termination, suspension, or withdrawal, including service 
CMS-9987-P 80

costs during any approved transition period, and 

administrative costs of disenrolling participants. 

(f) Federal evaluators. (1) A State must fully 

cooperate with the Secretary, the Secretary of the 

Treasury, or an independent evaluator selected by the 

Secretary or the Secretary of the Treasury to undertake an 

independent evaluation of any component of a section 1332 

waiver. 

(2) As part of this required cooperation, a State must 

submit all requested data and information to the Secretary, 

the Secretary of the Treasury, or the independent 

evaluator. 

§155.1324 State reporting requirements. 

(a) Quarterly reports. A State must submit quarterly 

reports to the Secretary in accordance with the terms and 

conditions of the State’s section 1332 waiver. These 

quarterly reports must include, but are not limited to, 

reports of any ongoing operational challenges and plans for 

and results of associated corrective actions. 

(b) Annual reports. A State must submit an annual 

report to the Secretary documenting all of the following: 

(1) The progress of the section 1332 waiver. 

(2) Data on compliance with section 1332(b)(1)(A) 

through (D) of the Affordable Care Act. 
CMS-9987-P 81

(3) A summary of the annual post-award public forum, 

held in accordance with §155.1320(c), including all public 

comments received at such forum regarding the progress of 

the section 1332 waiver and action taken in response to 

such concerns or comments. 

(4) Other information consistent the State’s approved 

terms and conditions. 

(c) Submitting and publishing annual reports. A State 

must submit a draft annual report to the Secretary no later 

than 90 days after the end of each waiver year, or as 

specified in the waiver’s terms and conditions. 

(1) Within 60 days of receipt of comments from the 

Secretary, a State must submit to the Secretary the final 

annual report for the waiver year. 

(2) The draft and final annual reports are to be 

published on a State’s public web site within 30 days of 

submission and approval to the Secretary, respectively. 

§155.1328 Periodic evaluation requirements. 

 (a) General. (1) The Secretary and the Secretary of 

the Treasury shall periodically evaluate the implementation 

of a program under a section 1332 waiver consistent with 

guidance published by the Secretary and the Secretary of 

the Treasury and any terms and conditions governing the 

section 1332 waiver. 
CMS-9987-P 82

(2) Each periodic evaluation must include a review of 

the annual report or reports submitted by the State in 

accordance with §155.1324 that relate to the period of time 

covered by the evaluation. 
CMS-9987-P 

Authority: Sec. 1332 of the Patient Protection and 

Affordable Care Act (Pub. L. 111-148). 

Approved: February 22, 2011. 

 

 ______________________________

Donald M. Berwick, 

 Administrator,

 Centers for Medicare & Medicaid 

Services. 

Approved: March 4, 2011.

 __________________________________ 

Kathleen Sebelius, 

Secretary of Health and Human 

Services. 
CMS-9987-P 

Approved: March 7, 2011. 

Michael F. Mundaca, 

Assistant Secretary of the 

Treasury (Tax Policy). 

BILLING CODE 4120-01-P; 4510-29-P 

[FR Doc. 2011-5583 Filed 03/10/2011 at 11:15 am; 

Publication Date: 03/14/2011]