DEPARTMENT OF THE TREASURY 

31 CFR Part 33 

RIN 1505-AC30 

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

45 CFR Part 155 

[CMS-9987-F] 

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: Final rule. 

SUMMARY: This final 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: These regulations are effective on [OFR--please insert date 60 days after

publication in the Federal Register].

FOR FURTHER INFORMATION CONTACT: 

Department of the Treasury: 

 Cameron Arterton, (202)622-0044 

Centers for Medicare & Medicaid Services: 

Ben Walker, (301)492-4430. 

SUPPLEMENTARY INFORMATION: 

I. Executive Summary: 
A. Purpose of the Regulatory Action

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

Affordable Care Act) (Pub. L. 111-148, enacted on March 23, 2010), requires the 

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

Secretaries) to issue regulations regarding procedures for Waivers for State Innovation 

under section 1332 of the Affordable Care Act. On March 14, 2011, the Secretaries 

published proposed rules to satisfy this requirement. This finalizes those proposed rules. 

B. Summary of the Major Provisions of the Regulatory Action in Question

 These final rules make a small number of changes to the proposed rules based on 

comments received from the public. We have removed a requirement for applications to 

be submitted in printed format, to reduce administrative burden. We have clarified that 

evidence of the State public notice and comment must include, “a description of the key 

issues raised...” during such period, to provide the Secretaries with a summary of public 

consultation to date. We have added a provision to specify that States must submit 

waiver applications sufficiently in advance of the requested effective date to ensure that 

an appropriate amount of time is available for implementation if the waiver is approved. 

We have also added a provision to specify that a complete application must include an 

implementation timeline, to facilitate an analysis by States and the Secretaries regarding 

the feasibility of the proposed implementation schedule. We have also clarified that a 

State does not have to enact a new law in support of a section 1332 waiver if the State 

already has a law in place, to eliminate the need for redundant legislative activities. 

 Lastly, we have made some structural changes to one section of the rules to 

reduce complexity, without modifying the content. 

C. Costs and Benefits
 These regulations are not economically significant, under section 3(f) of 

Executive Order 12866. 

II. Background 

Section 1332 of the Affordable Care Act creates a new Waiver for State 

Innovation and authorizes 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); 

● 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 tax penalties for the failure 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 HHS 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); 

● 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 the 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 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 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 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 (the Act)) or the 

Children’s Health Insurance Program (CHIP, title XXI of the 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 (CHIP) of the 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. 

 Proposed rules were issued on March 14, 2011, to implement the procedural 

requirements of section 1332 of the Affordable Care Act. The proposed rules were also 

intended to provide for a waiver application process that can be coordinated and 

consolidated with the processes for the submission of applications for waivers under titles 

XVIII, XIX, and XXI of the Act. 

III. Summary of the Provisions of the Proposed Regulations and Analysis of and 

Responses to Public Comments

 In the March 14, 2011 Federal Register (76 FR 13553), we published proposed 

rules addressing the procedural requirements of section 1332 of the Affordable Care Act. 

We received a total of 32 timely comments on the proposed rules. The modifications to 

the proposed regulations that are included in these final regulations reflect consideration 

of the comments submitted. 

A. Basis and Purpose (31 CFR 33.100 and 45 CFR 155.1300)

To implement the provisions of section 1332 of the Affordable Care Act, the 

Department of the Treasury proposed to add new part 33 to 31 CFR Subtitle A and the 

CMS, on behalf of HHS, proposed to add new part 155 to 45 CFR Subtitle A. These new 

parts 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. 

The final regulations make no change to the proposed regulations regarding these 

provisions. 

B. Coordinated Waiver Process (31 CFR 33.102 and 45 CFR 155.1302)

The proposed regulations at 31 CFR 33.102 and 45 CFR 155.1302 permitted, but 

did 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 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 waiver.1

The proposed regulations required a State seeking a section 1332 waiver to submit 

a waiver application to the Secretary of HHS. Upon receipt, the Secretary of HHS would 

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 the 

regulations. The Secretaries would coordinate the review of any application that includes 

 

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

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

programs have existing waiver authorities.
a request for a waiver of provisions falling under the jurisdiction of each of the 

Departments of HHS and the Treasury (the Departments). 

We received the following comments concerning the proposed coordinated 

waiver process. 

Comment: Commenters supported the proposal to permit the submission of a 

single, coordinated application for a section 1332 waiver and a waiver under one or more 

of the existing waiver processes. Several commenters asked that we provide more detail 

on the coordinated waiver process, and align procedures and timelines. One commenter 

also asked that we allow States to submit a single analysis of cost and coverage to satisfy 

both processes. 

Response: The Departments plan to work closely with States that are considering 

submitting multiple waivers to craft a process that meets a State’s specific circumstances. 

We anticipate that there may be opportunities to streamline and align the processes. We 

also are mindful that each of the specific waiver provisions has unique statutory 

requirements. We encourage any State that is considering a coordinated submission to 

approach the Departments as soon as is practicable to discuss how best to proceed to 

minimize administrative complexity while ensuring that the integrity of the review and 

approval processes is maintained. 

 Comment: One commenter requested that the Secretaries require public comment 

on the market impacts of a combined waiver application. 

 Response: We agree that public comment of this sort is useful, and we believe 

that 31 CFR 33.112 and 45 CFR 155.1312 of the proposed regulations, as finalized, allow 

stakeholders to provide such comments. 

C. Application Procedures (31 CFR 33.108 and 45 CFR 155.1308)
The proposed regulations established 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, 

each application for an initial section 1332 waiver will undergo a preliminary review by 

the Secretaries that will be completed within 45 days after the application is submitted. 

During this preliminary review period, the Secretaries would 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 determined that 

an application is incomplete, the Secretary of HHS would send the State a written notice 

of the elements missing from the application. The proposed regulations provided 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 

application is missing or insufficient, rendering the application incomplete. 

The proposed regulations provided that a submitted application would not be 

considered received until the Secretaries have made this preliminary determination that 

the application is complete. 

The proposed regulations provided that, upon a preliminary determination by the 

Secretaries that an application they have received is complete, as defined under the 

proposed regulations, the Secretary of HHS would 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 would 

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 would not be considered complete unless the application: (1) complies 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 enacted 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: 

+ As required under section 1332(b)(1)(A) of the Affordable Care Act (the 

comprehensive coverage requirement), would 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 

certified by the Office of the Actuary of the Centers for Medicare & 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; 
+ As required under section 1332(b)(1)(B) of the Affordable Care Act (the 

affordability requirement), would 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; 

+ As required under section 1332(b)(1)(B)(C) of the Affordable Care Act (the 

scope of coverage requirement), would 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 

+ As prohibited under section 1332(b)(1)(D) of the Affordable Care Act (the 

Federal deficit requirement), would not 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 costsharing reductions that would have been paid had the State not received a waiver, be paid 

to the State for purposes of 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 cost-sharing 

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 regulations required 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: 

● 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. 

(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-of-State, 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 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 solicited 

comments on whether a State should be required to submit an application at least 

12 months in advance of the requested effective date, to allow for the effective 

implementation of approved waivers at the State level. 
The requirement in the proposed regulations that a State provide certain analysis, 

certifications, data, assumptions, targets and other information as part of a section 1332 

waiver application was 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 solicited comments regarding these proposed 

requirements, as well as what other types of analysis, certifications, data, assumptions, 

targets and information 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 provided 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. 

We received the following comments concerning application procedures. 

1. Application Contents 

 Comment: In general, commenters supported the proposed application contents. 

Several commenters asked that the Secretaries require additional information to be 

submitted with the application, including background information on the State’s 

insurance market; the types of health plans or other arrangements a State will utilize to 

provide coverage and the criteria for participation in the plan; the health benefits that will 

be covered and how those compare to the essential health benefits specified in section 
1302(b) of the Affordable Care Act; whether and how the waiver will affect age rating 

and the value of financial assistance for individuals of different ages; how the waiver will 

affect children and youth with special health care needs and women with high-risk 

pregnancies; how the State will select the plans and monitor their performance; how 

payment rates for health plans and/or providers would be determined; how standards for 

provider network adequacy would be determined and met; how quality and 

appropriateness of care would be assessed; and how transparency in coverage and 

consumer choice and access to essential community providers would be monitored. 

Commenters also requested that the Secretaries require a State to provide specific 

information for specific waiver requests. For example, one commenter asked that the 

Secretaries require a State seeking a waiver that would affect Federally-Qualified Health 

Centers (FQHCs) or essential community providers (ECPs) to provide a set of detailed 

information about the rationale for such a proposal and the financial impact of it on 

FQHCs and ECPs. Another made a similar request with respect to waivers that affect 

essential health benefits. 

 Response: We recognize that additional information may be needed to determine 

whether a proposal meets the statutory criteria for approval. As set forth in 31 CFR 

33.108(a)(2)(iv)(D)(6) and 45 CFR 155.1308(a)(2)(iv)(D)(6), a State must also submit 

information consistent with guidance provided by the Secretaries, in addition to the 

enumerated data and analyses. This provision of the regulations allows the Secretaries to 

request additional information, including information suggested by commenters, which is 

relevant to determine whether a waiver proposal meets the statutory criteria for approval. 

As such, we finalized these provisions of the proposed regulations without change. 
 Comment: One commenter requested that States provide an implementation 

timeline as part of a waiver application. 

Response: We agree with this comment and have added language to the final 

regulation in 31 CFR 33.108(f)(4)(iv) and 45 CFR 155.1308(f)(4)(iv). We believe that 

the inclusion of an implementation timeline will help the Secretaries work with States to 

address the concern raised by another commenter that States implement a waiver in a 

manner that does not leave its residents without affordable coverage during the 

implementation period. 

 Comment: Several commenters asked the Secretaries to require States to provide 

a description of why the requested waivers are needed. 

Response: We agree that a discussion of the reasons for requesting the waiver is 

important and should be more than cursory. Accordingly, the final regulation at 31 CFR 

33.108(a)(2)(iv)(C) and 45 CFR 155.1308(a)(2)(iv)(C) no longer characterizes the 

required description as “brief.” 

 Comment: One commenter asked that the Secretaries permit the application to 

use existing reports and data sources available to the Federal government. 

Response: We agree that the process should be minimally burdensome for all 

involved entities, while still ensuring that the Secretaries are able to complete the 

analyses required by statute. We encourage States to utilize existing data wherever 

possible to facilitate the waiver approval process and we look forward to working closely 

with States to ensure that the proposed data sources are reliable and acceptable. 

 Comment: Several commenters asked that the Secretaries require applications to 

include a description of the key issues raised during the State public notice and comment 
period, along with how the State considered those comments in developing the 

application. 

 Response: The provisions of 31 CFR 33.108(a)(2)(iv)(B) and 45 CFR 

155.1308(a)(2)(iv)(B) of the proposed regulations require an application to provide, 

“...written evidence of the State’s compliance with the public notice requirements...” 

We agree with the commenter that this evidence should include a description of the key 

issues raised during the State public notice and comment period, and are adding this 

clarification to 31 CFR 33.108(f)(2) and 45 CFR 155.1308(f)(2) of the final rule. We 

believe that the substantive contents of the application will allow the Secretaries and 

interested parties to discern how the State considered the comments in constructing the 

proposal. 

 Comment: Commenters asked that the Secretaries clarify that in addition to 

providing the proposed actuarial and economic analyses, a State must also provide the 

underlying data and assumptions used to develop the analyses. 

Response: We believe that the provisions of the proposed regulations require the 

State to submit the underlying data and assumption used to develop the analysis. The 

proposed regulations at 31 CFR 33.108(a)(2)(iv)(D)(3) and 45 CFR 

155.1308(a)(2)(iv)(D)(3) specified that an application must include, “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.” We are maintaining this 

language in the final regulations. 
 Comment: One commenter suggested that the Secretaries limit the amount of 

documentation required to be submitted if the waiver proposal does not significantly 

impact the stability of the insurance market. 

Response: The statute requires the Secretaries to determine whether an 

application meets all the statutory approval criteria, regardless of its scope. 

Consequently, the Secretaries must receive and review the data and analyses required to 

be included in the application as provided in the regulations. We have no interest in 

requiring States to submit unnecessary information, and will work with States to ensure 

that the application process is appropriately tailored to the specific proposal and to the 

State’s circumstances. 

 Comment: One commenter asked that the Secretaries require that all actuarial 

estimates of coverage and market stability be performed by independent experts. 

 Response: The Secretaries plan to evaluate the analyses submitted with a State’s 

application. We expect the State analyses to adhere to generally-accepted standards for 

quality and the regulations require the States to submit the data and assumptions 

underlying such analyses, which will enable the Secretaries to conduct a thoughtful 

review. As such, the final regulations follow the proposed regulations without change. 

 Comment: One commenter asked the Secretaries to clarify that there is 

interaction between the statutory requirements for approval of a section 1332 waiver, for 

example, that the affordability of coverage will affect the number of individuals who will 

be covered. 

 Response: We agree with the comment. We expect States to address such 

connections in the analyses supporting an application. 
Comment: One commenter asked that the Secretaries require that any application 

that requested a waiver of the minimum coverage provision be accompanied by detailed 

projections demonstrating that comparable levels of coverage and affordability will be 

attained and maintained over at least a 10-year period in the individual market. 

 Response: We appreciate this comment. The Secretaries intend to work with 

States to ensure that the required analyses are consistent with one another. For future 

guidance, we will consider requiring an analysis for applications requesting a waiver of 

specific provisions to be provided over a specific time frame. 

Comment: One commenter objected to proposed questions regarding the impact 

of a proposed waiver on unwaived provisions and how the State will provide the Federal 

government with information necessary to administer the waiver at the Federal level. 

 Response: We believe that these questions are important to assess whether the 

proposal complies with the statutory criteria for approval. In particular, we believe that 

the question about Federal administration is important to understand the impact of the 

proposal on the Federal deficit. 

 Comment: One commenter suggested that the Secretaries require States to 

provide analysis to ensure that proposed innovations do not have the unintended effect of 

increasing the cost of insurance for the remaining market and decreasing enrollment. 

 Response: The analyses in 31 CFR 33.108(a)(2)(iv)(C)(4) and 45 CFR 

155.1308(a)(2)(iv)(C)(4) of the proposed rules were based on the statutory criteria for 

waiver approval, as specified in section 1332(b)(1) of the Affordable Care Act. In 

describing the scope of coverage and affordability requirements, the statute specifies that 

comparisons are to be made with respect to the provisions of title I of the Affordable Care 

Act, which contains the market reform provisions that affect the individual and small 
group markets -- inside and outside the Exchange. Consequently, we believe that the 

provisions of the proposed regulations specified that a State must provide the type of 

analysis that is requested by the commenter. We maintain this language in the final 

regulations. 

2. Timing of Applications 

 Comment: We received a number of comments regarding whether the Secretaries 

should require a State to submit an application for a section 1332 waiver 12 months (or 

some other amount of time) in advance of the requested effective date, to allow for the 

careful implementation of what may be complex waivers. In general, commenters 

supported a timing requirement of either 12 or 24 months in advance. However, some 

commenters opposed any timing requirement. In addition, one commenter asked that the 

Secretaries require at least 18 months between approval and implementation. 

 Response: In recognition of the range of time standards recommended by 

commenters, along with the likelihood that the scope of section 1332 waivers will vary 

widely based on the provisions a State proposes to waive and other related factors, we are 

amending the proposed language to specify that applications must be submitted 

sufficiently in advance of the requested effective date to allow for an appropriate 

implementation timeline. In addition, as discussed previously, the final regulations adopt 

a recommendation to include an implementation timeline as part of the waiver 

application. We believe this new timeline requirement will help ensure applications are 

submitted sufficiently in advance of the effective date. We further encourage States to 

contact the Secretaries during the conceptual phase of a section 1332 waiver to establish a 

reasonable timeframe for the submission of an application and the effective date of an 

approved proposal. 
 Comment: One commenter asked the Secretaries to clarify that there can only be 

one 45-day preliminary review period per application. 

 Response: We agree with the commenter’s clarification. We note that to the 

extent that a State’s application is denied and the State resubmits the application, the 

Secretaries will treat the application as a new application that is subject to a 45-day 

preliminary review period. 

3. Approval Standards 

 We received a number of comments regarding standards a section 1332 waiver 

proposal must meet to be approved by the Secretaries. The proposed regulations covered 

only the procedural standards for section 1332 waivers, and did not address the 

substantive standards for approval beyond restating the statutory criteria. 

Comment: Several commenters asked that the Secretaries define the 

comprehensive-coverage, affordability, and scope of coverage requirements specified in 

sections 1332(b)(1)(A), (B), and (C) of the Affordable Care Act. One commenter 

proposed a specific framework for the comprehensive-coverage standard based on the 

service categories specified in section 1302(b) of the Affordable Care Act, along with 

other analyses. Another commenter asked that the Secretaries clarify that affordability 

benchmarks will take into account the income of eligible individuals and the premium 

and cost-sharing subsidies they would receive. Another commenter asked that 

affordability analyses include consideration of services that are excluded from the 

proposed waiver. Lastly, one commenter asked that the Secretaries provide benchmarks 

for the scope of coverage analysis and allow public comment on such benchmarks. 

 Commenters suggested that the Secretaries should expand the criteria for approval 

to include providing a sufficient choice of health plans. One commenter specified that 
the Secretaries should require the State to ensure a selection of health plans that meet the 

needs of low-income individuals. Another commenter asked that States be required to 

demonstrate the adequacy of provider networks as a condition of approval. 

 Commenters also suggested that the Secretaries condition waiver approval on the 

inclusion of specific services and categories of services in the benefit package; the 

coordination of private and public delivery systems; the integration of enrollment and 

renewal processes; and the ability of delivery systems to measure acuity and severity and 

adjust cost structures appropriately. 

One commenter asked the Secretaries to specify that if any waiver alters Medicaid 

and CHIP, a State must maintain Medicaid and CHIP protections and “enabling services” 

(such as transportation and translation) for the Medicaid and CHIP population. Another 

commenter asked the Secretaries to require States to demonstrate adequate protections for 

Medicaid beneficiaries who are included in a section 1332 waiver. Another commenter 

asked the Secretaries to require that States provide children who are currently covered by 

CHIP with coverage, cost-sharing protections, and benefits comparable to CHIP. 

A commenter asked that the Secretaries require States seeking a waiver to provide 

for a similar age rating rule to the rule in section 1334 of the Affordable Care Act. 

Commenters also asked that the Secretaries require States to comply with other 

provisions of the Affordable Care Act as a condition of waiver approval. These included 

the nondiscrimination provisions of section 1557 of the Affordable Care Act and the 

market reform rules that take effect in 2014. 

 One commenter said that States and the Secretaries must consider whether a 

proposal meets the statutory requirements for approval for both the overall population 

and specifically for American Indians and Alaska Natives. 
Lastly, one commenter asked the Secretaries to require the CMS actuary to certify 

whether a State's proposal would provide coverage to a comparable number of residents 

purchasing individual insurance policies. 

Response: We appreciate the comments submitted on standards for approval and 

will consider them as we develop the substantive component of the waiver approval 

process. Further, we clarify that section 1332(a)(2) of the Affordable Care Act clearly 

defines the scope of authority under section 1332, and does not extend to subtitle A of 

title I of the Affordable Care Act, which includes the market reform provisions, or section 

1557 of the Affordable Care Act, which includes the nondiscrimination provisions. 

4. General 

 Comment: Commenters asked the Secretaries to clarify that a State does not have 

to enact a new law and establish new programs if a sufficient law or program already 

exists. 

 Response: We agree with this comment. The final regulations at 31 CFR 

33.108(f)(3)(ii) and 45 CFR 155.1308(f)(3)(ii) were modified to make clear that States 

with an existing law or program that addresses the waiver process and requirements are 

not required to enact a new law. 

 Comment: One commenter suggested that the Secretaries consider not requiring 

applications to be submitted in printed format. 

 Response: We agree with the commenter’s suggestion, and are removing this 

requirement from the final rules. 

 Comment: One commenter asked the Secretaries to specify that they will process 

all submitted applications. 
Response: We agree with the comment and believe that the proposed regulations 

address it. As set forth in 31 CFR 33.108(a)(2) and 45 CFR 155.1308(a)(2), the 

Secretaries will make a determination as to whether each submitted application is 

complete, and 31 CFR 33.116(c) and 45 CFR 155.1316(c) of the proposed rules specified 

that the Secretaries will make a final decision regarding all applications that are found to 

be complete. We are maintaining these provisions in the final regulations. 

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 required 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 required a State with one or more Federallyrecognized Indian tribes within its 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 public notice and comment period, the proposed 

regulations required a State to provide the public with the following information 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 

required 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. 

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. 

We received the following comments concerning the proposed State public notice 

and comment process. 
1. Timing 

Comment: In general, commenters expressed support for a robust State public 

notice and comment process. Several commenters suggested that the Secretaries should 

specify a minimum amount of time for the State public notice and comment process, 

ranging from 45 to 90 days. 

Response: We agree with commenters that the State public notice and comment 

period is an important element of a transparent approach. The proposed regulations 

require that the State public notice period be, “sufficient to ensure a meaningful level of 

public input”. Because section 1332 waiver applications may take on a wide range of 

proposals, we believe that this approach better suits section 1332 waivers. To the extent 

that a proposal is particularly wide-ranging, the proposed regulations will support a 

longer State public notice and comment period, and if the proposal is minor, it can 

support a shorter period. As such, we are maintaining the language of the proposed 

regulations in the final rules. We further encourage States to contact the Secretaries 

during the conceptual phase of a section 1332 waiver to establish a reasonable timeframe 

for the State public notice and comment period. 

2. Tribal Consultation 

Comment: One commenter suggested that the Secretaries encourage States to use 

Medicaid tribal consultation procedures in the section 1332 waiver process. 

Response: As set forth in 31 CFR 33.112(a)(2) and 45 CFR 155.1312(a)(2), a 

State with one or more Federally-recognized tribes within its borders must conduct a 

separate process for meaningful consultation with such tribes as part of the State public 

notice and comment process. In the preamble associated with this section, the Secretaries 

noted that such process is in accordance with Executive Order 13175, which mandated 
the establishment of regular and meaningful consultation and collaboration with tribal 

officials in the development of Federal policies that have “tribal implications,” which are 

defined as policies or actions “with substantial direct effects on one or more Indian tribes, 

on the relationship between the Federal Government and Indian tribes, or on the 

distribution of power and responsibilities between the Federal Government and Indian 

tribes.” As this executive order also applies to Medicaid, a State could use a Medicaid 

consultation process to satisfy the consultation needed for a section 1332 waiver. We 

agree with the commenter and encourage States to consider whether the use of such a 

process would be appropriate for section 1332 proposals. 

3. Public Hearings 

Comment: Commenters supported the requirement for public hearings. 

Commenters suggested allowing States to determine the appropriate number of public 

hearings, with a minimum of one or two. One commenter asked the Secretaries to 

specify that hearings must happen in multiple geographic locations. 

Response: As set forth in 31 CFR 33.112(c)(1) and 45 CFR 155.1312(c)(1), “...a 

State must conduct public hearings regarding the State’s application.” We believe that 

the proposed regulation permits a State to determine the appropriate number of hearings, 

but, by definition, “hearings” means no less than two. As such, the final regulations were 

not changed. 

31 CFR 33.112(c)(2) and 45 CFR 155.1312(c)(2) provides that “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.” We interpret this to mean that 

a State must provide the opportunity for parties throughout a State to comment, either 
through multiple hearings in different locations, or through the use of phone or 

videoconferencing. We will maintain this provision in the final regulations. 

Comment: Commenters supported the provisions in 31 CFR 33.112(c)(2) and 45 

CFR 155.1312(c)(2) that specify that public hearings must provide an opportunity for an 

interested party to comment on the contents of an application for a section 1332 waiver. 

One commenter recommended that the Secretaries specify that legislative hearings can 

substitute for the State public notice and comment process. Other commenters opposed 

this recommendation, noting that legislative hearings may provide only limited 

opportunities for members of the public to comment. 

Response: While the proposed rules do not specifically address whether 

legislative hearings may satisfy the public hearing requirement, 31 CFR 33.112(c)(2) and 

45 CFR 155.1312(c)(2) of the proposed regulation provide that, “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.” If a legislative hearing provides 

an opportunity for interested parties to comment on the contents of a waiver application, 

then it meets the public hearing requirement; if, however, a legislative hearing does not 

allow the public to contribute, it does not meet the requirement. Specifically, we believe 

that to use a legislative hearing towards meeting this requirement, a State would need to 

provide a concrete proposal for comment well in advance of the hearing, as well as an 

opportunity for the public to speak at the hearing. We are maintaining this approach in 

the final regulations to provide States with flexibility but at the same time ensure that the 

public has a meaningful opportunity to comment. 

4. General 
Comment: One commenter recommended that the Secretaries require consumers 

to be full participants as waivers are designed, implemented, and monitored, and that 

such participation should include serving on an advisory board and a governing board. 

Response: We agree with the commenter that States should involve consumers in 

the development, implementation, and monitoring of section 1332 waivers. We believe 

that the proposed State and Federal public notice and comment processes, along with the 

post-award public forum provision, ensure formal opportunities for participation. To 

ensure that consumers can participate, we clarify that the State public notice and 

comment process, the post-award public forum, and the draft and final annual reports 

published on a State’s public web site must comply with applicable civil rights 

requirements for accessibility, which are discussed in the preamble to this section. We 

also note that we expect that States will inform consumers and other interested parties 

regarding the availability of auxiliary aids and services for public forums. 

We encourage States to consider where other opportunities for consumer 

involvement exist. Given that section 1332 waivers may be broad or narrow in scope, we 

have not modified the proposed regulation to add a provision requiring the establishment 

of advisory or governing boards. We believe that such a requirement would be overly 

burdensome for a State seeking a waiver that is limited in scope. We will work closely 

with States to ensure that the State public notice and comment process is sufficient to 

ensure a meaningful level of public input, as proposed in 31 CFR 33.112(a)(1) and 45 

CFR 155.1312(a)(1). 

Comment: A commenter asked that the Secretaries require that a State send a 

copy of any waiver proposal affecting FQHCs or ECPs directly to each FQHC in the 
State as well as to the State primary care association, and that the State allow the primary 

care association and at least two FQHCs time to speak at the public hearing. 

Response: We acknowledge the critical role that FQHCs and ECPs have in 

providing services to low-income and other vulnerable populations. Given the potentially 

broad scope of section 1332 waivers, the Secretaries opted to take a broad approach to 

describing the State public notice and comment process in the proposed rules, to ensure 

that it would remain flexible to accommodate comments from all key stakeholders. The 

provisions of 31 CFR 33.112(a)(1) and 45 CFR 155.1312(a)(1) specify that, “a State must 

provide public notice and comment period sufficient to ensure a meaningful level of 

public input...” This will give FQHCs, ECPs, and other interested or affected 

stakeholders an opportunity for engagement. 

Comment: A few commenters asked the Secretaries to clarify that the description 

of the proposal that is shared with the public must include specific details of the proposal, 

including analyses of financing and enrollment. 

Response: We agree with the commenters that this information is important to 

ensuring that stakeholders have an opportunity to provide meaningful input. As set forth 

in 31 CFR 33.112(b)(1) and 45 CFR 155.1312(b)(1), the public notice must include the 

following: “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.” We believe that this provision addresses the 

commenters’ recommendations by ensuring that the public will have access to in-depth 

information needed to assess the impact of the proposal. We also retain the flexibility to 

clarify this provision in future guidance to address any areas in which additional 
information is needed to ensure that the State public notice and comment period is 

sufficient to ensure a meaningful level of public input. 

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 

provided for 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. 

To facilitate public participation in the section 1332 waiver application process, 

the proposed regulations required 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 would 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 (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 would be issued by the Secretary 

of HHS. 

We received the following comments concerning the proposed Federal public 

notice and approval process. 

1. Federal public notice process 

Comment: Commenters suggested that the Secretaries post applications and 

supporting materials on a dedicated web site. 

Response: As set forth in 31 CFR 33.116(b)(2) and 45 CFR 155.1316(b)(2), the 

Secretary of HHS, “...will make available through its Web site and otherwise, and shall 

update as appropriate, public notice....” The proposed rules list the contents of this 

public notice, which include applications and supporting materials. We will consider 

whether to implement this requirement through a dedicated website, or through a page on 

the main HHS or CMS web site. 

Comment: Several commenters asked that the Secretaries require a specific 

length for the Federal public notice and comment period. One commenter suggested 

45 days. 

Response: We agree with commenters that the Federal public notice and 

comment period is an important element of a transparent approach. The proposed 

regulations require that the Federal public notice period be, “sufficient to ensure a 

meaningful level of public input”. Because the waiver applications may cover a wide 

range of proposals, we believe that this approach better suits section 1332 waivers. To 

the extent that a proposal is particularly wide-ranging, the proposed regulation will 

support a longer Federal public notice and comment period, and if the proposal is minor, 
it can support a shorter period. As such, we are maintaining the language of the proposed 

regulations in the final rules. 

Comment: Commenters suggested that the Secretaries create an electronic 

mailing list to notify interested parties of the submission of an application and other 

actions taken. 

Response: We will consider this suggestion as we develop the details of the 

Federal public notice and comment process. 

Comment: Commenters asked that the Secretaries specify that the Secretaries 

will electronically publish all comments received during the Federal public notice and 

comment process. 

Response: We agree with the commenter’s suggestion. This provision was 

included in 31 CFR 33.116(b)(2)(iv) and 45 CFR 155.1316(b)(2)(iv) of the proposed 

regulations, and we will maintain this in the final regulations. 

Comment: One commenter suggested that the Secretaries modify the proposed 

process to incorporate a notification of the State primary care association in any State that 

is requesting to waive provisions related to FQHCs, and to require the Secretaries to 

provide written responses related to comments on this topic, as well as explanations and 

supporting information related to the approval of any proposal that contains such 

provisions. 

Response: We acknowledge the critical role that FQHCs have in providing 

services to low-income and other vulnerable populations. Given the potentially broad 

scope of section 1332 waivers, the Secretaries opted to take a broad approach to 

describing the Federal public notice and comment process in the proposed rules, to ensure 

that it would remain flexible to accommodate comments from all key stakeholders. 
31 CFR 33.116(b)(1) and 45 CFR 155.1316(b)(1) specified that, “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...” This will give FQHCs, ECPs, 

and other interested or affected stakeholders an opportunity for engagement. 

Comment: One commenter expressed concerns as to whether comments from 

entities outside a State requesting a waiver would be applicable to the State’s proposal. 

Response: We recognize that entities within a State requesting a waiver are well 

positioned to contribute meaningful comments; we also recognize that there are entities 

throughout the country that will have an interest in and expertise in the topics of waiver 

proposals, particularly to the extent that a State’s waiver proposal could affect other 

States. In the interests of creating a transparent process, the Secretaries will consider all 

comments submitted during the Federal public notice and comment period, and make 

decisions in accordance with the statutory criteria for approval. 

2. Approval Process 

 Comment: One commenter suggested that the Secretaries establish a waiver 

review panel that consists of consumers, providers, and federal and nongovernmental 

technical experts to review testimony and comments and make recommendations 

regarding the approval of a waiver. 

 Response: We will consider this suggestion, along with other approaches to 

creating an efficient and transparent process, as we move closer to the point at which 

States will begin to develop section 1332 proposals. 

 Comment: Commenters asked for clarification on how the Secretaries would 

implement the 180-day Federal decision-making period. One commenter suggested that 

the Secretaries should allow reasonable adjustments to an application without affecting 
timeframes, when the adjustments are the result of State-Federal negotiations. Another 

commenter asked the Secretaries to clarify whether the provision allowing the Secretaries 

to determine an application incomplete after first determining it complete was purposeful, 

and asked for the Secretaries to revise this provision such that it would not affect the 180-

day Federal decision-making period. 

 Response: The Secretaries intend to develop protocols related to the Federal 

decision-making process that are responsive to the needs of each State and promote 

efficiency and transparency. These protocols may vary from proposal to proposal, and 

will certainly evolve as States and the Secretaries gain additional expertise in navigating 

the process. We will strive to ensure clear and open lines of communication between a 

State and the Secretaries throughout the Federal decision-making process. 

We agree with the comment regarding the allowance to modify an application 

without affecting the timeframe as a result of negotiation. We anticipate that this will be 

a regular occurrence during the Federal decision-making period, and that making agreedupon changes as the process moves forward will facilitate an efficient process for all 

involved parties. 

We clarify that the provision in 31 CFR 33.108(a)(2)(i)(C) and 45 CFR 

155.1308(a)(2)(i)(C) of the proposed regulations was indeed purposeful in specifying that 

a preliminary finding that an application is complete does not preclude the Secretaries 

from later finding that an application is not complete. We anticipate that conversations 

between a State and the Secretaries may reveal additional information that is needed to 

evaluate whether an application meets the statutory requirements for approval. When 

such a situation occurs without sufficient time for the State to respond before the end of 

the 180-day Federal decision-making period, the Secretaries can either deny the 
application or find the application incomplete; we believe that the latter option provides 

greater flexibility to States, and reduces duplicate burden that would be placed on States 

and on the Federal government if an application must be resubmitted. As such, we are 

maintaining this provision in the final regulations. As noted above, we intend to work 

closely with States to create an efficient process for waiver approval, and preserve 

timeframes wherever possible. 

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 established processes and 

methodologies to ensure that the Secretaries receive adequate and appropriate 

information regarding 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 required a State to come into compliance with 

any changes in Federal law, regulation, or policy affecting 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 would 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 would 

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 would 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 six months of the waiver’s implementation, 

and annually thereafter, States were required to hold a public forum at which members of 

the public have an opportunity to provide comments on the progress of the section 1332 

waiver. The proposed regulation further required 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 were 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 reserved 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 determined that the 

State materially failed to comply with the terms and conditions of the section 1332 

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

suspended by the Secretaries, or if all or a portion of a section 1332 waiver is withdrawn, 

Federal funding would be 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 undertook 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 would include, but is 

not limited to, the submission of all necessary data and information to the Secretaries or 

the independent evaluator. 

We received the following comments concerning the proposed provisions 

regarding monitoring and compliance. 

1. Post-Award Public Forum 

Comment: In general, commenters supported the proposal for an annual public 

forum. Some commenters requested that the Secretaries provide additional detail on the 

post-award public forum requirement, including requiring the development of a formal 

advisory body similar to the Medical Care Advisory Committee (MCAC). Commenters 

also asked the Secretaries to clarify that the public must have an opportunity to comment 

at a post-award public forum, and that the Secretaries should require States to publish the 

date, time, and location of public forums in the State equivalent of the Federal Register. 

Response: We believe that it is appropriate to provide a State with flexibility to 

determine the appropriate public forums. Consequently, we have not added a provision 

requiring a State to establish an advisory board. Further, given the possibility for section 

1332 waivers to be broad or narrow in scope, we want to avoid requiring the creation of 

burdensome structures. 
We agree with commenters that the public should have an opportunity to 

comment at a post-award public forum, which was reflected in 31 CFR 33.120(c) and 

45 CFR 155.1320(c) of the proposed regulations. We are maintaining this provision in 

the final regulations. 

We also agree that the public should have notice of a public forum. As set forth 

in 31 CFR 33.120(c)(1) and 45 CFR 155.1320(c)(1), a State must publish the date, time, 

and location of a post-award public forum in a prominent location on the State’s public 

Web site at least 30 days prior to the forum. We believe that a State’s public web site is a 

more effective means of communication to the public than a State’s equivalent of the 

Federal Register, and as such, will maintain this provision in the final regulation. With 

that said, we encourage States to publish the notice of a post-award forum in other 

locations that will ensure appropriate public notice. 

Comment: One commenter asked that the Secretaries consider delaying the initial 

post-award public forum and removing the requirement after 2 to 3 years of operation, 

with the potential to trigger forums when changes occur. 

 Response: We support the commenter’s desire to reduce burden on States. 

However, we believe that post-award forums will be critical to ensuring that public has a 

regular opportunity to learn about and comment on the progress of a waiver. As such, we 

are maintaining this provision in the final regulations. 

2. General 

Comment: One commenter suggested that 31 CFR §33.120(a) be modified to 

remove the term “interpretive guidance.” The commenter stated that States should be 

subject only to “laws, regulations, and interpretive policy that have been published and 

are of general applicability. 
Response: We believe that the authority available to States under section 1332 

demands that the Federal government have a broad set of tools for ensuring ongoing 

compliance with the statutory criteria for the approval of waivers and providing needed 

clarifications to States, including interpretive guidance. With that noted, we will work 

closely with States to provide as much advance notice as possible of upcoming guidance 

that affects waivers, as well as to incorporate State input in crafting such guidance where 

possible. 

Comment: A commenter asked the Secretaries to reduce Federal discretionary 

authority to discontinue waivers. 

Response: As set forth in 31 CFR 33.120(d) and 45 CFR 155.1320(d), the 

Secretaries’ authority to terminate or suspend a waiver is limited to situations in which 

the Secretaries find, “...that a State has materially failed to comply with the terms of a 

section 1332 waiver.” We believe that this provision is sufficiently limited and is critical 

to ensuring that Federal dollars are spent in accordance with applicable rules. As such, 

we will maintain this provision in the final regulations. 

Comment: One commenter asked that the Secretaries require States to develop a 

transition plan that would allow the public to continue to have access to quality, 

affordable health care should a State’s waiver be terminated or suspended. 

Response: We agree that it would be useful for States to develop a transition 

plan, depending on the scope of the approved section 1332 waiver. We will consider 

including this as a standard component of the terms and conditions of an approved 

waiver. 

Comment: One commenter asked the Secretaries to closely monitor approved 

waivers to ensure fair and adequate access to and payment for FQHC services. 
Response: We believe that there are many areas in which monitoring will be 

particularly important to ensure that approved waivers continue to meet the statutory 

criteria for approval. To the extent possible, we will align this monitoring with each 

State’s waiver design to reduce administrative burden. 

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 process for the periodic submission of reports by a State concerning the implementation 

of the program under a section 1332 waiver. 

For the Secretaries to effectively monitor the implementation of a waiver, the 

proposed regulations required a State to submit a quarterly progress report in accordance 

with the terms and conditions of the State’s section 1332 waiver. States were 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 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 were 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 would be 
required to submit a final annual report for the waiver year to the Secretary of Health and 

Human Services. Finally, a State would be required to publish the draft and final annual 

reports on the State’s public web site. 

The Secretaries noted that they intended to issue future guidance under section 

1332 regarding periodic reports. 

We received the following comments concerning the proposed process for State 

reporting on approved waivers. 

Comment: Several commenters requested that the Secretaries require States and 

the Federal government to publish quarterly and annual reports on State and Federal web 

sites in a timely fashion. 

Response: The provisions of 31 CFR 33.124(c)(2) and 45 CFR 155.1324(c)(2) 

specify that a State must publish both draft and final annual reports on its public web site. 

We are maintaining this provision in the final regulations. We will consider the other 

elements of this comment in developing future guidance on reporting. 

Comment: In general, commenters supported the proposed quarterly and annual 

reporting provisions. Some commenters requested that the Secretaries add specific 

reporting topics and analyses in regulation, as opposed to addressing this in future 

guidance. 

Response: We appreciate the commenters’ detailed suggestions. We are not 

including additional specificity in the final regulations at this time, given that the rules 

regarding the underlying provisions are not yet final. We will consider the specific 

suggestions in developing future guidance on reporting, as well as in crafting the 

reporting provisions that may be specific to an approved waiver. 
Comment: One commenter recommended that the frequency of reporting be 

reduced from quarterly to semi-annual for the first 2 to 3 years of a waiver period, with 

annual reporting after that. The commenter also suggested that annual reports be 

replaced with high-level summaries after the first 2 to 3 years of a waiver period. 

Response: We support the commenter’s desire to reduce burden on States. 

However, we believe that given the potentially broad scope of section 1332 waivers, 

quarterly and annual reporting will be critical to ensuring that the Secretaries can exercise 

appropriate oversight of approved waivers, and States can formally communicate areas in 

which best practices have emerged or technical assistance may be needed. We also 

believe that such reporting is important to enable the Secretaries to calibrate future 

budgetary estimates. Within this construct, we intend to work with States to ensure that 

quarterly and annual reporting do not include duplicative or unnecessary information, and 

are closely aligned to the design of a State’s waiver. 

Comment: One commenter objected to the provision that allows the Secretaries 

to review a draft version of the annual report prior to its release to the public. 

Response: Consistent with the practice that we are adopting for section 1115 

waivers, which is specified in a concurrently issued final rule in 42 CFR 431.428(b), the 

provisions of 31 CFR 33.124(c)(2) and 45 CFR 155.1324(c)(2) specify that a State must 

publish the draft annual report on a public Web site within 30 days of submission to the 

Secretary of HHS. We believe that this is appropriate to allow the State to complete any 

internal process it has for preparing the document for publication (for example, ensuring 

that the document meets electronic accessibility standards) and posting it electronically. 

We are maintaining this provision in the final rules. 

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 process for the periodic evaluation of section 1332 waivers by the Secretary or 

Secretaries with jurisdiction over the provisions for which the waiver was granted. The 

proposed regulations required that each periodic evaluation include a review of all annual 

reports submitted by the State in accordance with 45 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 solicited public comments 

regarding specific components of the periodic evaluation of a section 1332 waiver. The 

Secretaries noted that 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 noted that they intended to issue future guidance under section 

1332 regarding periodic evaluations. 

We received the following comments concerning the proposals regarding the 

evaluation of approved waivers. 

Comment: Several commenters asked the Secretaries to include additional 

specific evaluation criteria in regulation, including, the use of Healthcare Effectiveness 

Data and Information Set (HEDIS) and the Consumer Assessment of Healthcare 

Providers and Systems (CAHPS); system-wide, audited quality outcome measures; and 
metrics on accessibility, cost, health and wellness, administrative expenses, evidencebased practices, and the impact of the waiver on individuals with pre-existing conditions 

and low-income populations. 

Commenters also offered additional suggestions for the evaluation process, 

including requiring comparisons with States without waivers; requiring that evaluations 

be conducted by objective, independent, peer-reviewed evaluators at least every 3 years; 

and allowing States flexibility in constructing evaluations. 

Response: We have carefully reviewed the submitted comments and will 

consider them as we develop guidance on this topic. We intend to work closely with 

States and stakeholders to ensure that evaluations are aligned with the design and goals of 

a State’s waiver and section 1332. 

Comment: Commenters asked that evaluation criteria not necessarily include 

choice of health plans, to allow evaluation criteria to accommodate different approaches 

that States may take in section 1332 waivers. 

Response: The potential evaluation criteria offered in the preamble to the 

proposed regulations represents a starting point for the development of guidance on the 

evaluation of approved section 1332 waivers. We anticipate that the primary focus of the 

evaluation will be the four statutory criteria for approval specified in section 1332(b)(1) 

of the Affordable Care Act. As noted above, we intend to work closely with States to 

ensure that evaluations are aligned with the design and goals of a State’s waiver and 

section 1332. 

Comment: Commenters asked that the Secretaries, and not the States, conduct 

evaluations. 
Response: We are maintaining the language in 31 CFR 33.128(a)(1) and 45 CFR 

155.1328(a)(1), as the law requires periodic evaluations by the Secretaries. We will 

consider how best to carry out this responsibility as we develop future guidance related to 

the evaluation process. 

I. Other Comments

 We received the following comments, which were not related to a specific section 

of the proposed regulation. 

1. Scope of Waivers 

 Comment: We received a number of comments that requested that the Secretaries 

clarify or restrict waiver authority in various ways, including prohibiting States from: 

imposing more stringent coverage requirements on employers; waiving the minimum 

coverage provision; waiving provisions related to essential community providers; 

granting exceptions from the medical loss ratio requirement; or affecting employersponsored insurance. One commenter also asked that the Secretaries emphasize the 

importance of preserving employer-based coverage. 

 In particular, a number of commenters asked the Secretaries to clarify the 

interaction between section 1332 waivers and the Employee Retirement Income Security 

Act (ERISA). 

 In addition, one commenter asked whether States will be permitted to use 

redirected premium tax credits and cost-sharing reductions to fund Health Savings 

Accounts (HSAs). 

 Response: Section 1332(a)(2) of the Affordable Care Act specifies that waiver 

authority is limited to parts I and II of subtitle D of the Affordable Care Act; section 1402 

of the Affordable Care Act; and sections 36B, 4980H, and 5000A of the Internal Revenue 
Code. Further, section 1332(c) of the Affordable Care Act states while the Secretaries 

have broad discretion to determine the scope of a waiver, no Federal laws or 

requirements may be waived that are not within the Secretaries’ authority. As previously 

noted, we encourage States to contact the Secretaries to discuss specific waiver proposals, 

particularly after the substantive rules subject to section 1332 waivers are finalized. 

2. General 

 Comment: One commenter asked that the Secretaries include provisions for 

waiver amendments and renewals, and clarify which requirements apply in these 

situations. Another commenter recommended that the renewal process include a thorough 

reevaluation. 

 Response: We acknowledge that information regarding waiver amendments and 

renewals will be needed as we move closer to the date on which section 1332 waivers 

could be effective. However, amendments and renewals are beyond the purview of the 

proposed rules, which were limited in accordance with section 1332(a)(4)(B) of the 

Affordable Care Act. 

 Comment: A commenter asked that the Secretaries clarify that waivers are 

approved for a fixed timeframe. 

 Response: We note that section 1332(e) of the Affordable Care Act specifies that 

the initial term of a section 1332 waiver may not extend longer than five years. 

 Comment: One commenter asked how HHS will determine the total amount of 

Federal funding under an approved waiver. 

 Response: We will provide additional information on this issue as we move 

closer to the date on which section 1332 waivers could be effective and regulations 

regarding the underlying provisions are promulgated. 
IV. Provisions of the Final Regulations 

 For the most part, these final rules incorporate the provisions of the proposed 

rules. Those provisions of these final rules that differ from the proposed rules are as 

follows: 

A. Coordinated Waiver Process (31 CFR 33.102 and 45 CFR 155.1302)

 We have clarified that “section 1115 demonstration” in 31 CFR 33.102(a) and 

45 CFR 155.1302(a) refers to a demonstration under section 1115 of the Act. 

 We have replaced the word “and” with the word “or” in 31 CFR 33.102(b) and 

45 CFR 155.1302(b) to clarify that the Secretary of Health and Human Services will 

transmit any proposal that requests to waive one or more of the provisions under the 

authority of the Secretary of the Treasury to the Secretary of the Treasury. 

B. Definitions (31 CFR 33.104 and 45 CFR 155.1304)

 We have revised the definition of “Complete application” to reflect structural 

changes in 31 CFR 33.108 and 45 CFR 155.1308. 

C. Application Procedures (31 CFR 33.108 and 45 CFR 155.1308)

 We have revised 31 CFR 33.108 and 45 CFR 155.1308 substantially to adopt a 

simpler structural layout. We have revised and added headings and sections for (a), (b), 

(c), (d), (e), and (f), now titled, “Acceptable formats for applications”; “Application 

timing”; “Preliminary review”; “Notification of preliminary determination”; “Public 

notice of completed application”; and, “Criteria for a complete application”, respectively. 

We also made changes to cross-references to reflect the new layout. With the exception 

of the new headings, revised cross-references, and the below modifications, all content is 

the same. 
 We have modified 31 CFR 33.108(a) and 45 CFR 155.1308(a) to remove the 

requirement that a State submit applications in printed format. 

 We have added a provision at 31 CFR 33.108(b) and 45 CFR 155.1308(b) to 

specify that States must submit waiver applications sufficiently in advance of the 

requested effective date to allow for an appropriate implementation timeline. 

 We have modified 31 CFR 33.108(f)(2) and 45 CFR 155.1308(f)(2) to clarify that 

written evidence of the State’s compliance with the public notice and comment process 

includes, “a description of the key issues raised during the State public notice and 

comment period.” 

 We have amended 31 CFR 33.108(f)(3)(ii) and 45 CFR 155.1308(f)(3)(ii) to 

clarify that the requirement to provide a copy of a law that provides the State with 

authority to implement the proposed waiver can be satisfied through the submission of an 

existing law, if such a law exists. 

 We have amended 31 CFR 33.108(f)(3)(iii) and 45 CFR 155.1308(f)(3)(iii) to 

remove the word “brief” from the provision describing information that States must 

provide regarding the rationale for a State’s specific waiver requests. 

 We have made minor wording changes to 31 CFR 33.108(f)(3)(v)(A)-(D) and 45 

CFR 155.1308(f)(3)(v)(A-D) to improve clarity. 

 We have added a provision at 31 CFR 33.108(f)(4)(iv) and 45 CFR 

155.1308(f)(4)(iv) to specify that States must submit an implementation timeline as part 

of the supporting information required for a complete initial application. 

 We have modified 31 CFR 33.108(g)(1) and 45 CFR 155.1308(g)(1) to clarify 

that requests for additional information from the Secretary of the Treasury will be 
transmitted to a State through the Secretary of Health and Human Services, which 

follows the process used elsewhere in the rules. 

D. General

 Throughout 45 CFR 155 subpart N, we have added, “as applicable” after 

references to the Secretary of the Treasury, to clarify that the specified requirements only 

involve the Secretary of the Treasury to the extent that a waiver proposal or approved 

waiver includes a waiver of a provision under the authority of the Secretary of the 

Treasury. 

V. Collection of Information Requirements 

 Under the Paperwork Reduction Act of 1995 (PRA), 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 3506(c)(2)(A) of the PRA 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 will be able to more accurately estimate 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 solicited public comments on the annual 

number of waiver applications that the Departments may receive, but did not receive any 

responses. With that said, the Departments developed estimates of the burden associated 

with information collection requirements in the proposed regulations, and has modified 

them based on the below comments. Further, the burden estimates provided are 

estimated averages, and the actual burden will vary based on the scope of the waiver and 

the State’s existing infrastructure for these activities. 

 We received the following comments on information collection requirements. 

 Comment: One commenter asked that we estimate the number of States that will 

seek waivers. 

 Response: We solicited comment on this in the proposed rules, and did not 

receive any responses. Given the lack of response and length of time before the earliest 

possible effective date for section 1332 waivers, the Secretaries have no way to 

accurately quantify the number of States that will seek waivers. With that said, we 

believe that the per-State burden estimates provided in the proposed rule provide 

adequate information regarding the collections related to these rules. As such, for the 

purpose of this estimate, we use one State. 

 Comment: One commenter asked that we explain the average wage used in the 

burden analyses. Another suggested that the calculated burden estimates were too low. 

 Response: We have revisited the average wage used and agree with the 

commenter that it was too low. We have also revisited some of the estimates of the 

number of hours and adjusted them. The combined impact of these changes is to increase 

the overall burden estimate, both in terms of hours and dollars. We have recomputed the 

average wage based on a 75 percent/25 percent blend for a Management Analyst 
(Occupation No. 13-1111 in the Bureau of Labor Statistics’ May 2010 National 

Occupational Employment and Wage Estimate; Industry: State Government; Category: 

Business and Financial Operations Occupations) and a General and Operations Manager 

(Occupation No. 11-1021 in the May 2010 Bureau of Labor Statistics’ National 

Occupational Employment and Wage Estimate; Industry: State Government; Category: 

Management Occupations). We believe that this better reflects wages for these activities 

by using actual average wages for State government employees at an expected 

staff/management mix. In addition, we have incorporated a factor of 31.2 percent to 

account for additional employer costs (paid leave, supplemental pay, insurance, 

retirement and savings, and legally-required benefits) by using the State and local 

government rate for such costs for management, professional, and related workers from 

the Bureau of Labor Statistics’ September 2011 Employer Costs for Employee 

Compensation survey. By using this methodology, we have revised the average wage 

from $20.67 per hour to $46.67 per hour, which results in commensurate increases to all 

of the burden estimates. 

 The Departments solicited public comment on each of these issues for the 

following sections of this document that contain information collection requirements 

(ICRs): 

A. ICRs Regarding the Coordinated Waiver Process (31 CFR 33.102 and 45 CFR 

155.1302) and Application Procedures (31 CFR 33.108 and 45 CFR 155.1308)

 Under certain conditions, 31 CFR 33.102 and 45 CFR 155.1302(a) and (b) 

provide that a State may submit a single application 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 Act, or under any other Federal law 
relating to the provision of health care items or services. 31 CFR 33.108 and 45 CFR 

155.1308 establish the application process for section 1332 waivers. Under 31 CFR 

33.108(a) and 45 CFR 155.1308(a), a State’s application for approval of a section 1332 

waiver must be submitted to the Secretary as an electronic document. Paragraph (f) of 31 

CFR 33.108 and 45 CFR 155.1308 specifies that an application for a section 1332 waiver 

will not be considered complete unless the application meets all of the conditions set out 

those sections. 

 The burden associated with the requirements in 31 CFR 33.102 and 33.108 and 

45 CFR 155.1302 and 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 400 hours for a State to develop and submit a complete section 1332 

waiver application, at a cost of $18,668. 

B. ICRs Regarding State Public Notice Requirements (31 CFR 33.112 and 45 CFR 

155.1312)

 Paragraph (a) of 31 CFR 33.112 and 45 CFR 155.1312 require a State to provide 

a public notice and comment period prior to submitting an application for a section 1332 

waiver. 

 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 the requirements in paragraph (a)(1) and (b) of this section is the time and 

effort necessary to develop and provide public notice and obtain and consider public 

comments. The Departments estimate that each State submitting an application for a 

section 1332 waiver will require 80 hours to comply with the requirements in this section, 

at a total cost of $3,734 per State. 
 Paragraph (a)(2) of 31 CFR 33.112 and 45 CFR 155.1312 require States with 1 or 

more Federally-recognized Indian tribes to consult with such tribes before submitting a 

section 1332 waiver application. Paragraph (f)(2) 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 (f)(2) of 31 CFR 33.108 and 45 

CFR 155.1308. The Departments estimate that each State with federally recognized 

tribes that submits 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 $1,867. 

 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. 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. 

C. ICRs Regarding Monitoring and Compliance (31 CFR 33.120 and 45 CFR 155.1320)

31 CFR 33.120(b) and 45 CFR 155.1320(b) require States to periodically perform 
reviews of the implementation of the section 1332 waiver. The Departments estimate 

that it will take a State 80 hours annually to periodically review the waiver’s 

implementation, at a total cost of $3,734. 

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

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

$3,734. 

 Paragraph (b) of 31 CFR 33.124 and 45 CFR 155.1324 requires States to submit 

annual reports to CMS documenting the information listed in paragraphs (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 develop and submit draft annual reports to 

CMS. The Departments estimate that it will take 40 hours for each State to comply with 

this reporting requirement, at a total cost of $1,867. 

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

4 hours for each State to comply with this requirement, at a total cost of $187. 

E. ICRs Regarding Periodic Evaluation Requirements (31 CFR 33.128 and 45 CFR 

155.1328)

31 CFR 33.128 and 45 CFR 155.1328 specify that the Secretary of Health and 

Human Services and the Secretary of the Treasury shall periodically evaluate the 

implementation of section 1332 waivers. The Departments recognize that evaluation will 

likely involve information collections, but are not seeking OMB approval for collections 

related to this provision at this time. The Departments will seek OMB approval, as 

needed, once it develops guidance for States regarding this evaluation requirement. Such 

approval will be requested following the 60- and 30-day comment periods required by the 

PRA. 
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 1 1 400 400 46.67 $18,668 0 $18,668

Paragraph 

(a)(1) of 31 

CFR 33.112 

and 45 CFR 

155.1312 

0938-New 1 1 80 80 46.67 $3,734 0 $3,734

Paragraph 

(a)(2) of 31 

CFR 33.112 

and 45 CFR 

155.1312 

0938-New 1 1 40 40 46.67 $1,867 0 $1,867

Paragraph 

(b)(1) of 31 

CFR 33.120 

and 45 CFR 

155.1320 

0938-New 1 1 80 80 46.67 $3,734 0 $3,734

Paragraph (a) 

of 31 CFR 

33.124 and 45 

CFR 155.1324 

0938-New 1 4 10 40 46.67 $1,867 0 $1,867

Paragraph (b) 

of 31 CFR 

33.124 and 45 

CFR 155.1324 

0938-New 1 1 40 40 46.67 $1,867 0 $1,867

Paragraph 

(c)(2) of 31 

CFR 33.124 

and 45 CFR 

155.1324 

0938-New 1 1 4 4 46.67 $187 0 $187

Total 1 10 684 $31,922 0 $31,922

If you comment on these information collection and recordkeeping requirements, 

please submit your comments to the Office of Information and Regulatory Affairs, Office 

of Management and Budget, 

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

 Fax: (202) 395-6974; or 

 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 obtains a control number assigned by OMB. 

VI. Regulatory Impact Statement 
The Departments have examined the impacts of these final rules 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)). 

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). These rules have been 

designated “significant regulatory actions” although not economically significant, under 

section 3(f) of Executive Order 12866. Accordingly, these rules have 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 economic 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 
because the Departments have determined, and the Secretaries certify, that these final 

rules will not have a significant economic 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 or more in 1995 

dollars, updated annually for inflation. In 2011, that threshold is approximately 

$136 million. Because these rules do 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 these rules 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 these regulations would not impose costs on State or 

local governments, the requirements of Executive Order 13132 are not applicable. In 

accordance with the provisions of Executive Order 12866, these regulations were 

reviewed by the Office of Management and Budget. 
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. 
Department of the Treasury 

31 CFR Subtitle A 

For the reasons set forth in the preamble, the Department of the Treasury amends 

31 CFR subtitle A by adding 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 

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. 

(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 demonstrations under section 1115 of the Social Security 

Act, 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, or 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 of Health and Human Services to the Secretary to be reviewed in 

accordance with this part. 

§ 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(f). 

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) Acceptable formats for applications. Applications for initial approval of a 

section 1332 waiver shall be submitted in electronic format to the Secretary of Health and 

Human Services. 

(b) Application timing. Applications for initial approval of a section 1332 waiver 

must be submitted sufficiently in advance of the requested effective date to allow for an 

appropriate implementation timeline. 

(c) Preliminary review. 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. 

(1) 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. 

(2) 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. 

(3) 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. 

(d) Notification of preliminary determination. 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 
preliminary determination. That date will also mark the beginning of the Federal public 

notice process and the 180-day Federal decision-making period. 

(e) Public notice of completed application. Upon receipt of a complete 

application for an initial section 1332 waiver, the Secretary of Health and Human 

Services will-- 

(1) 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. 

(2) Indicate the status of the application. 

(f) Criteria for a complete application. An application for initial approval of a 

section 1332 waiver will not be considered complete unless the application meets all of 

the following conditions: 

(1) Complies with paragraphs (a) through (f) of this section. 

(2) Provides written evidence of the State’s compliance with the public notice 

requirements set forth in §33.112, including a description of the key issues raised during 

the State public notice and comment period. 

(3) Provides all of the following: 

(i) A comprehensive description of the State legislation and program to 

implement a plan meeting the requirements for a waiver under section 1332; 

(ii) A copy of the enacted State legislation that provides the State with authority to 

implement the proposed waiver, as required under section 1332(a)(1)(C) of the 

Affordable Care Act; 

(iii) A list of the provisions of law that the State seeks to waive, including a 

description of the reason for the specific requests; and 
(iv) The analyses, actuarial certifications, data, assumptions, analysis, targets and 

other information set forth in paragraph (f)(4) 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: 

(A) As required under section 1332(b)(1)(A) of the Affordable Care Act (the 

comprehensive coverage requirement), will 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 & 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; 

(B) As required under section 1332(b)(1)(B) of the Affordable Care Act (the 

affordability requirement), will 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; 

(C) As required under section 1332(b)(1)(C) of the Affordable Care Act (the 

scope of coverage requirement), will 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 

(D) As prohibited under section 1332(b)(1)(D) of the Affordable Care Act (the 

Federal deficit requirement), will not increase the Federal deficit. 

(4) Contains the following supporting information: 

(i) 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. 

(ii) 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: 

(A) 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 all costs under the waiver, including administrative costs and other costs to the 

Federal government, if applicable; and 

(B) A detailed analysis regarding the estimated impact of the waiver on health 

insurance coverage in the State. 

(iii) 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: 

(A) 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; cross-tabulations of these variables; and an 

explanation of data sources and quality; and 

(B) 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. 
(iv) Implementation timeline. A detailed draft timeline for the State’s 

implementation of the proposed waiver. 

(v) Additional information. Additional information supporting the State's 

proposed waiver, including: 

(A) An explanation as to whether the waiver increases or decreases the 

administrative burden on individuals, insurers, and employers, and if so, how and why; 

(B) 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; 

(C) An explanation of how the waiver will affect residents who need to obtain 

health care services out-of-State, as well as the States in which such residents may seek 

such services; 

(D) 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 

(E) 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. 

(vi) 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. 

(vii) Other information. Other information consistent with guidance provided by 

the Secretary and the Secretary of Health and Human Services. 
(g) Additional supporting information. (1) During the Federal review process, the 

Secretary may request additional supporting information from the State via the Secretary 

of Health and Human Services 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 

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. 

(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 

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 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 

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 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 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 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 with 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. 

(2) The draft and final annual reports are to be published on a State’s public web 

site within 30 days of submission to and approval by the Secretary of Health and Human 

Services, respectively. 

§ 33.128 Periodic evaluation requirements. 
 (a) 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. 

(b) 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. 
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 amends 45 CFR subtitle A, subchapter B by adding 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 

Affordable Care Act, 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. 

(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 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 demonstrations 

under section 1115 of the Act, 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 

the Secretary that requests to waive sections 36B, 4980H, or 5000A of the 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, as applicable, have made a preliminary 

determination that it includes all required information and satisfies all requirements that 

are described in §155.1308(f). 

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) Acceptable formats for applications. Applications for initial approval of a 

section 1332 waiver shall be submitted in electronic format to the Secretary. 

(b) Application timing. Applications for initial approval of a section 1332 waiver 

must be submitted sufficiently in advance of the requested effective date to allow for an 

appropriate implementation timeline. 

(c) Preliminary review. Each application for a section 1332 waiver will be subject 

to a preliminary review by the Secretary and the Secretary of the Treasury, as applicable, 

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 the 

Treasury, as applicable, have made the preliminary determination that the application is 

complete. 

(1) The Secretary and the Secretary of the Treasury, as applicable, will complete 

the preliminary review of the application within 45 days after it is submitted. 

(2) If the Secretary and the Secretary of the Treasury, as applicable, determine 

that the application is not complete, the Secretary will send the State a written notice of 

the elements missing from the application. 

(3) 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. 

(d) Notification of preliminary determination. 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, as applicable, have made such a preliminary determination. That date will 
also mark the beginning of the Federal public notice process and the 180-day Federal 

decision-making period. 

(e) Public notice of completed application. Upon receipt of a complete application 

for an initial section 1332 waiver, the Secretary will-- 

(1) 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. 

(2) Indicate the status of the application. 

(f) Criteria for a complete application. An application for initial approval of a 

section 1332 waiver will not be considered complete unless the application meets all of 

the following conditions: 

(1) Complies with paragraphs (a) through (f) of this section. 

(2) Provides written evidence of the State’s compliance with the public notice 

requirements set forth in § 155.1312, including a description of the key issues raised 

during the State public notice and comment period. 

(3) Provides all of the following: 

(i) A comprehensive description of the State legislation and program to 

implement a plan meeting the requirements for a waiver under section 1332; 

(ii) A copy of the enacted State legislation that provides the State with authority to 

implement the proposed waiver, as required under section 1332(a)(1)(C) of the 

Affordable Care Act; 

(iii) A list of the provisions of law that the State seeks to waive including a 

description of the reason for the specific requests; and 
(iv) The analyses, actuarial certifications, data, assumptions, analysis, targets and 

other information set forth in paragraph (f)(4) of this section sufficient to provide the 

Secretary and the Secretary of the Treasury, as applicable, with the necessary data to 

determine that the State’s proposed waiver: 

(A) As required under section 1332(b)(1)(A) of the Affordable Care Act (the 

comprehensive coverage requirement), will 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 & 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; 

(B) As required under section 1332(b)(1)(B) of the Affordable Care Act (the 

affordability requirement), will 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; 

(C) As required under section 1332(b)(1)(C) of the Affordable Care Act (the 

scope of coverage requirement), will 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 

(D) As prohibited under section 1332(b)(1)(D) of the Affordable Care Act (the 

Federal deficit requirement), will not increase the Federal deficit. 

(4) Contains the following supporting information: 

(i) 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; 

(ii) 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: 

(A) 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 all costs under the waiver, including administrative costs and other costs to the 

Federal government, if applicable; and 

(B) A detailed analysis regarding the estimated impact of the waiver on health 

insurance coverage in the State. 

(iii) 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: 

(A) 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; cross-tabulations of these variables; and an 

explanation of data sources and quality; and 

(B) 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. 
(iv) Implementation timeline. A detailed draft timeline for the State’s 

implementation of the proposed waiver. 

(v) Additional information. Additional information supporting the State's 

proposed waiver, including: 

(A) An explanation as to whether the waiver increases or decreases the 

administrative burden on individuals, insurers, and employers, and if so, how and why; 

(B) 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; 

(C) An explanation of how the waiver will affect residents who need to obtain 

health care services out-of-State, as well as the States in which such residents may seek 

such services; 

(D) 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 

(E) 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. 

(vi) 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. 

(vii) Other information. Other information consistent with guidance provided by 

the Secretary and the Secretary of the Treasury, as applicable. 
(g) 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 

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, as applicable. 

(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. 

(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, as applicable, 

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, as applicable, 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:

(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, as applicable, 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, as applicable, 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, as applicable, 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 the Treasury, as applicable, 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, as applicable, 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, as applicable, 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 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, as applicable, 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 Secretary or the 

Secretary of the Treasury, as applicable, determines 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 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, as applicable, or an independent evaluator selected by the 

Secretary or the Secretary of the Treasury, as applicable, 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, as applicable, 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. 

(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 with 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 to and approval by the Secretary, respectively. 

§ 155.1328 Periodic evaluation requirements. 

 (a) The Secretary and the Secretary of the Treasury, as applicable, 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, as 

applicable, and any terms and conditions governing the section 1332 waiver. 
(b) 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. 

Authority: Sec. 1332 of the Patient Protection and Affordable Care Act (Pub. L. 111-

148). 

Approved: January 26, 2012 

 

 __________________________________ 

Marilyn Tavenner, 

 Acting Administrator,

 Centers for Medicare & Medicaid Services. 

Approved: January 30, 2012 

 __________________________________ 

Kathleen Sebelius, 

Secretary of Health and Human Services. 
Approved: 

Emily S. McMahon, 

Acting Assistant Secretary (Tax Policy), 

Department of the Treasury. 

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

[FR Doc. 2012-4395 Filed 02/22/2012 at 11:15 am; Publication Date: 02/27/2012]