Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Proposed Rules 13553 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. 

The FTC Act and other laws that the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. The Commission will 

consider all timely and responsive 

public comments that it receives, 

whether filed in paper or electronic 

form. Comments received will be 

available to the public on the FTC Web 

site, to the extent practicable, at http://

www.ftc.gov/os/publiccomments.shtm. 

As a matter of discretion, the FTC makes 

every effort to remove home contact 

information for individuals from the 

public comments it receives before 

placing those comments on the FTC 

Web site. More information, including 

routine uses permitted by the Privacy 

Act, may be found in the FTC’s privacy 

policy, at http://www.ftc.gov/ftc/ 

privacy.htm. 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

[FR Doc. 2011–5757 Filed 3–11–11; 8:45 am] 

BILLING CODE 6750–01–P 

DEPARTMENT OF THE TREASURY 

31 CFR Part 33 

RIN 1505–AC30 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

45 CFR Part 155 

[CMS–9987–P] 

RIN 0938–AQ75 

Application, Review, and Reporting 

Process for Waivers for State 

Innovation 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS; 

Department of the Treasury. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule sets forth 

a procedural framework for submission 

and review of initial applications for a 

Waiver for State Innovation described in 

section 1332 of the Patient Protection 

and the Affordable Care Act including 

processes to ensure opportunities for 

public input in the development of such 

applications by States and in the 

Federal review of the applications. 

DATES: Comments are due on or before 

May 13, 2011. 

ADDRESSES: Written comments may be 

submitted to any of the addresses 

specified below. Any comment that is 

submitted to one Department will be 

shared with the other Department. 

Please do not submit duplicates. 

Department of the Treasury. 

Interested members of the public are 

invited to submit comments on this 

proposed rule. Comments may be 

submitted to Treasury by either of the 

following methods: Submit electronic 

comments through the Federal 

government e-rulemaking portal, http:// 

www.regulations.gov, or send comments 

in hard copy to: Office of Benefits Tax 

Counsel, Attention: Waivers for State 

Innovation, Room 3050, Department of 

the Treasury, 1500 Pennsylvania 

Avenue, NW., Washington, DC 20220. 

In general, Treasury will post all 

comments to http://www.regulations.gov 

without change, including any business 

or personal information provided such 

as names, addresses, e-mail addresses, 

or telephone numbers. Treasury will 

also make such comments available for 

public inspection and copying in 

Treasury’s Library, Room 1428, 1500 

Pennsylvania Avenue, NW., 

Washington, DC 20220, on official 

business days between the hours of 10 

a.m. and 5 p.m. Eastern Time. Members 

of the public can make an appointment 

to inspect comments by telephoning 

(202) 622–0990. All comments received, 

including attachments and other 

supporting materials, are part of the 

public record and subject to public 

disclosure. You should only submit 

information that you wish to make 

available publicly. 

Centers for Medicare & Medicaid 

Services. In commenting, please refer to 

file code CMS–9987–P. Because of staff 

and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (please choose only one of the 

ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Attention: CMS–9987– 

P, P.O. Box 8016, Baltimore, MD 21244– 

8016. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Attention: CMS–9987– 

P, Mail Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

4. By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments before the close 

of the comment period to either of the 

following addresses: 

a. For delivery in Washington, DC— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Room 445–G, Hubert 

H. Humphrey Building, 200 

Independence Avenue, SW., 

Washington, DC 20201. 

(Because access to the interior of the 

Hubert H. Humphrey Building is not 

readily available to persons without 

Federal government identification, 

commenters are encouraged to leave 

their comments in the CMS drop slots 

located in the main lobby of the 

building. A stamp-in clock is available 

for persons wishing to retain a proof of 

filing by stamping in and retaining an 

extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786– 

7195 in advance to schedule your 

arrival with one of our staff members. 

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

Submission of comments on 

paperwork requirements. You may 

submit comments on this document’s 

paperwork requirements by following 

the instructions at the end of the 

‘‘Collection of Information 

Requirements’’ section in this document. 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following Web 

site as soon as possible after they have 

been received: http://regulations.gov. 

Follow the search instructions on that 

Web site to view public comments. 

Comments received timely will be 

also available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 


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13554 Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Proposed Rules 

1Although section 1332 of the Affordable Care 

Act does not authorize waivers for related programs 

like Medicaid (title XIX of the Social Security Act) 

or the Children’s Health Insurance Program (title 

XXI of the Social Security Act), those programs 

have existing waiver authorities. 

Baltimore, Maryland 21244, Monday 

through Friday of each week from 8:30 

a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

FOR FURTHER INFORMATION CONTACT: 

Department of the Treasury: Carrie 

Simons, (202) 622–0044. 

Centers for Medicare & Medicaid 

Services: Ben Walker, (301) 492–4430. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 1332 of the Patient Protection 

and Affordable Care Act (the Affordable 

Care Act) (Pub. L. 111–148, enacted on 

March 23, 2010) creates a new Waiver 

for State Innovation and authorizes the 

Secretary of Health and Human Services 

(HHS) and the Secretary of the Treasury 

(the Secretaries) to waive all or any of 

the following requirements falling under 

their respective jurisdictions for health 

insurance coverage within a State for 

plan years beginning on or after January 

1, 2017: 

• Part I of subtitle D of Title I of the 

Affordable Care Act (relating to the 

establishment of qualified health plans); 

• Part II of subtitle D of Title I of the 

Affordable Care Act (relating to 

consumer choices and insurance 

competition through health benefit 

exchanges); 

• Section 1402 of the Affordable Care 

Act (relating to reduced cost sharing for 

individuals enrolling in qualified health 

plans); and 

• Sections 36B (relating to refundable 

credits for coverage under a qualified 

health plan), 4980H (relating to shared 

responsibility for employers regarding 

health coverage), and 5000A (relating to 

the requirement to maintain minimum 

essential coverage) of the Internal 

Revenue Code. 

Section 1332 of the Affordable Care 

Act provides that references in that 

section to ‘‘Secretary’’ refer to the 

Secretary of Health and Human Services 

for waivers relating to Parts I and II of 

subtitle D of Title I of the Affordable 

Care Act and section 1402 of the 

Affordable Care Act, and refer to the 

Secretary of the Treasury for waivers 

relating to sections 36B, 4980H, and 

5000A of the Internal Revenue Code. 

Section 1332(a)(4)(B) of the 

Affordable Care Act requires the 

Secretaries to issue regulations that 

provide the following: 

• A process for public notice and 

comment at the State level, including 

public hearings, that is sufficient to 

ensure a meaningful level of public 

input (section 1332(a)(4)(B)(i) of the 

Affordable Care Act); 

• A process for the submission of an 

application that ensures the disclosure 

of (A) the provisions of law that the 

State involved seeks to waive, and (B) 

the specific plans of the State to ensure 

that the waiver will be in compliance 

with specified statutory requirements 

relating to the comprehensiveness of 

coverage, affordability of coverage, 

scope of coverage, and the effect on 

Federal deficit (as described below) 

(section 1332(a)(4)(B)(ii) of the 

Affordable Care Act); 

• A process for providing public 

notice and comment after the 

application is received by the applicable 

Secretary or Secretaries, that is 

sufficient to ensure a meaningful level 

of public input and that does not 

impose requirements that are in 

addition to, or duplicative of, 

requirements imposed under the 

Administrative Procedure Act (APA), or 

requirements that are unreasonable or 

unnecessarily burdensome with respect 

to State compliance (section 

1332(a)(4)(B)(iii) of the Affordable Care 

Act); 

• A process for the submission to the 

applicable Secretary or Secretaries of 

periodic reports by the State concerning 

the implementation of the program 

under a waiver (section 1332(a)(4)(B)(iv) 

of the Affordable Care Act); and 

• A process for the periodic 

evaluation by the applicable Secretary 

or Secretaries of the program under a 

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

Affordable Care Act). 

Although section 1332 of the 

Affordable Care Act does not authorize 

waivers for related programs like 

Medicaid (title XIX of the Social 

Security Act) or the Children’s Health 

Insurance Program (title XXI of the 

Social Security Act), those programs 

have existing waiver authorities. Section 

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

requires the Secretaries to develop a 

process for coordinating and 

consolidating the State waiver processes 

applicable under the provisions of 

section 1332 of the Affordable Care Act 

with the existing waiver processes 

applicable under titles XVIII (Medicare), 

XIX (Medicaid), and XXI (Children’s 

Health Insurance Program, or CHIP) of 

the Social Security Act, and any waiver 

processes under other Federal laws 

relating to the provision of health care 

items or services. Section 1332(a)(5) of 

the Affordable Care Act further requires 

the process developed by the Secretaries 

to permit a State to submit a single 

application for a waiver under any or all 

of those provisions. 

This proposed rule would implement 

the procedural requirements of section 

1332 of the Affordable Care Act. The 

proposed rule is intended to provide for 

a waiver application process that can be 

coordinated and consolidated with the 

processes for the submission of 

applications for waivers under titles 

XVIII, XIX, and XXI of the Social 

Security Act. 

II. Overview of the Proposed 

Regulations: Section 1332 of the 

Affordable Care Act, Waiver for State 

Innovation (31 CFR Part 33 and 45 CFR 

Part 155) 

A. Introduction 

To implement the provisions of 

section 1332 of the Affordable Care Act, 

the Department of the Treasury 

proposes to add new part 33 to 31 CFR 

subtitle A and the Centers for Medicare 

& Medicaid Services, on behalf of the 

Department of Health and Human 

Services, proposes to add new part 155 

to 45 CFR Subtitle A. These new parts 

would address procedures for State 

development and submission of an 

application for a Waiver for State 

Innovation under section 1332 of the 

Affordable Care Act (referred to in the 

proposed regulations as a section 1332 

waiver), a process for providing public 

notice and opportunity for comment at 

the State and Federal levels, a process 

for the review of applications by the 

Secretaries, and processes for the 

monitoring and evaluation of approved 

section 1332 waivers by the States and 

the Secretaries, including the periodic 

submission of reports by the States to 

the Secretaries. 

B. Coordinated Waiver Process (31 CFR 

33.102 and 45 CFR 155.1302) 

These proposed regulations at 31 CFR 

33.102 and 45 CFR 155.1302 permit, but 

do not require, States to submit a single 

application for a section 1332 waiver 

and a waiver under one or more of the 

existing waiver processes applicable 

under titles XVIII, XIX, and XXI of the 

Social Security Act, or under any other 

Federal law relating to the provision of 

health care items or services, provided 

that the application is consistent with 

the procedures described in these 

proposed regulations, the procedures for 

section 1115 demonstrations, if 

applicable, and the procedures under 

any other applicable Federal law under 

which the State seeks a waiver.1

The proposed regulations require a 

State seeking a section 1332 waiver to 

submit a waiver application to the 

Secretary of HHS. Upon receipt, the 

Secretary of HHS will transmit any 


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Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Proposed Rules 13555 

application that includes a request for a 

waiver of provisions under the 

jurisdiction of the Secretary of the 

Treasury (sections 36B, 4980H and 

5000A of the Internal Revenue Code) to 

be reviewed in accordance with the 

provisions of these proposed 

regulations. The Secretaries will 

coordinate the review of any application 

that includes a request for a waiver of 

provisions falling under the jurisdiction 

of each of the Departments of Health 

and Human Services and the Treasury 

(the Departments). 

C. Application Procedures (31 CFR 

33.108 and 45 CFR 155.1308) 

These proposed regulations establish 

procedures for the submission of 

applications for an initial section 1332 

waiver. 

Under 31 CFR 33.108(a) and 45 CFR 

155.1308(a) of the proposed regulations, 

the Secretaries will subject each 

application for an initial section 1332 

waiver to a preliminary review. The 

Secretaries will complete the 

preliminary review within 45 days after 

the application is submitted. 

During this preliminary review 

period, the Secretaries will make a 

preliminary determination as to whether 

a State’s application complies with the 

requirements set forth in 31 CFR 

33.108(a)(2) and 45 CFR 155.1308(a)(2). 

If the Secretaries determine that an 

application is incomplete, the Secretary 

of HHS will send the State a written 

notice of the elements missing from the 

application. These proposed regulations 

provide that a preliminary 

determination that an application is 

complete does not preclude a finding 

during the 180-day Federal decisionmaking period that a necessary element 

of the application is missing or 

insufficient, rendering the application 

incomplete. 

These proposed regulations provide 

that a submitted application will not be 

considered received until the 

Secretaries have made this preliminary 

determination that the application is 

complete. This timing protocol is 

necessary to ensure that the Federal 

public notice and comment period and 

the 180-day Federal decision-making 

period are based on applications that 

the Secretaries preliminarily determine 

to be complete, and that all relevant 

information is available for review 

during those periods. 

The proposed regulations provide 

that, upon a preliminary determination 

by the Secretaries that an application 

they have received is complete, as 

defined under these proposed 

regulations, the Secretary of HHS will 

send the State a written notice 

informing the State that the Secretaries 

have made such a preliminary 

determination, and the date upon which 

they have made that preliminary 

determination. That date will also mark 

the beginning of the Federal public 

notice and comment period and the 180- 

day Federal decision-making period. 

Under the proposed regulations, an 

application for initial approval of a 

section 1332 waiver will not be 

considered complete unless the 

application: (1) Complies with the 

application procedures of 31 CFR 

33.108(a)(2)(iv) and 45 CFR 

155.1308(a)(2)(iv); (2) provides written 

evidence of the State’s compliance with 

the public notice requirements set forth 

in 31 CFR 33.112 and 45 CFR 155.1312; 

and (3) provides all of the following: 

• A comprehensive description of the 

State legislation and program to 

implement a plan meeting the 

requirements for a waiver under section 

1332, as required under section 

1332(a)(1)(B)(i) of the Affordable Care 

Act; 

• A copy of the enacted State 

legislation authorizing such waiver 

request, as required under section 

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

• A list of the provisions of law that 

the State seeks to waive including a 

brief description of the reason for the 

specific requests; and 

• The analyses, actuarial 

certifications, data, assumptions, targets 

and other information sufficient to 

provide the Secretaries with the 

necessary data to determine that the 

State’s proposed waiver: 

+ Will, as required under section 

1332(b)(1)(A) of the Affordable Care Act 

(the comprehensive coverage 

requirement), provide coverage that is at 

least as comprehensive as the coverage 

defined in section 1302(b) of the 

Affordable Care Act and offered through 

Exchanges established under Title I of 

the Affordable Care Act as certified by 

the Office of the Actuary of the Centers 

for Medicare and Medicaid Services 

based on sufficient data from the State 

and from comparable States about their 

experience with programs created by the 

Affordable Care Act and the provisions 

of the Affordable Care Act that would be 

waived; 

+ Will, as required under section 

1332(b)(1)(B) of the Affordable Care Act 

(the affordability requirement), provide 

coverage and cost sharing protections 

against excessive out-of-pocket 

spending that are at least as affordable 

as the provisions of Title I of the 

Affordable Care Act would provide; 

+ Will, as required under section 

1332(b)(1)(B)(C) of the Affordable Care 

Act (the scope of coverage requirement), 

provide coverage to at least a 

comparable number of its residents as 

the provisions of Title I of the 

Affordable Care Act would provide; and 

+ Will not, as prohibited under 

section 1332(b)(1)(D) of the Affordable 

Care Act (the Federal deficit 

requirement), increase the Federal 

deficit. 

Section 1332(a)(3) of the Affordable 

Care Act requires that the Secretaries 

provide for an alternative means by 

which the aggregate amount of tax 

credits or cost-sharing reductions that 

would have been paid had the State not 

received a waiver, be paid to the State 

for purposes of 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 regulation requires 

that a State’s application contain: 

(1) Actuarial analyses and actuarial 

certifications to support the State’s 

estimates that the proposed waiver will 

comply with the comprehensive 

coverage requirement, the affordability 

requirement and the scope of coverage 

requirement. 

(2) Economic analyses to support the 

State’s estimates that the proposed 

waiver will comply with the 

comprehensive coverage requirement, 

the affordability requirement, the scope 

of coverage requirement and the Federal 

deficit requirement, including: 

• 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 


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13556 Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Proposed Rules 

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 

solicit comments on whether a State 

should be required to submit an 

application at least 12 months in 

advance of the requested effective date, 

in order to allow for the effective 

implementation of approved waivers at 

the State level. 

The requirement in the proposed 

regulation that a State provide certain 

analysis, certifications, data, 

assumptions, targets and other 

information as part of a section 1332 

waiver application is designed to ensure 

that a State’s development of a waiver 

proposal addresses major relevant issues 

for the State and provides the 

Secretaries with sufficient information 

to fully assess the projected impact of 

section 1332 waiver proposals for the 

statutory requirements and to accurately 

determine the amount to be paid to the 

State for purposes of implementing the 

waiver under section 1332(a)(3) of the 

Affordable Care Act. The Secretaries 

also solicit comments regarding these 

proposed requirements, as well as what 

other types of analysis, certifications, 

data, assumptions, targets and 

information States would consider 

useful in supporting an application for 

a section 1332 waiver and whether these 

regulations should specifically require 

such additional analyses, certifications, 

data, assumptions, targets and 

information to be included as part of a 

section 1332 waiver application. 

Lastly, during the Federal review 

process, the proposed regulation 

provides that the Secretaries may 

request additional supporting 

information from the State as needed to 

address public comments or to address 

issues that arise in reviewing the 

application. 

D. State Public Notice Requirements (31 

CFR 33.112 and 45 CFR 155.1312) 

Consistent with the provisions of 

section 1332 of the Affordable Care Act, 

to facilitate public involvement in the 

review and approval of section 1332 

waiver applications, 31 CFR 33.112(a)(1) 

and 45 CFR 155.1312(a)(1) of the 

proposed regulations require a State to 

provide a public notice and comment 

period sufficient to ensure a meaningful 

level of public input for a section 1332 

waiver application prior to the 

submission of that application to the 

Secretary of HHS for review and 

consideration. In addition, the proposed 

regulations require a State with one or 

more Federally-recognized Indian tribes 

within its borders to consult with those 

Indian tribes in accordance with 

Executive Order 13175. 

Because meaningful input requires 

notice of the nature of the section 1332 

waiver application, as part of the State 

notice and comment period, the 

proposed regulations require a State to 

provide the public with the following 

prior to the submission of an 

application: 

• A comprehensive description of the 

section 1332 waiver application to be 

submitted to the Secretary of HHS, 

including information and assurances 

related to all statutory requirements and 

other information consistent with 

guidance provided by the Secretaries; 

• Where copies of the section 1332 

waiver application are available for 

public review and comment; 

• How and where written comments 

may be submitted and reviewed by the 

public, and the timeframe during which 

public comments may be submitted; and 

• The location, date and time of 

public hearings that will be convened 

by the State to seek public input on the 

section 1332 waiver application. 

31 CFR 33.112(a)(2) and 45 CFR 

155.1312(a)(2) of the proposed 

regulations require States to conduct 

public hearings that provide interested 

parties with the opportunity to learn 

about and comment on the contents of 

the section 1332 waiver application. 

The State public notice and comment 

process must comply with applicable 

civil rights rules for accessibility, which 

require, for example— 

• The provision of auxiliary aids and 

services such as interpreters for persons 

with disabilities where necessary for 

effective communication; 

• The use of accessible meeting 

places for the hosting of public forums 

provided for in the Rule; 

• Reasonable steps to provide 

meaningful access for limited English 

proficient (LEP) persons, such as the 

inclusion of ‘‘tag lines’’ on State web 

sites containing phone numbers for LEP 

persons to call to reach ‘‘language line’’ 

interpreters for assistance; and 

• Other civil rights requirements 

applicable to the States under the 

Americans with Disabilities Act, section 

504 of the Rehabilitation Act of 1973 

and Title VI of the Civil Rights Act of 

1964, among others. 

E. Federal Public Notice and Approval 

Process (31 CFR 33.116 and 45 CFR 

155.1316) 

Consistent with section 1332 of the 

Affordable Care Act and the Secretaries’ 

desire to implement a State waiver 

application process that promotes 

transparency, facilitates public 

involvement and input, and encourages 

sound decision-making at all levels of 

government, 31 CFR 33.116 and 45 CFR 

155.1316 of the proposed regulations 

provide for a Federal public notice and 

comment period following a 

preliminary determination by the 

Secretaries that a State’s application for 

a section 1332 waiver is complete. As 

required by section 1332 of the 

Affordable Care Act, the Federal notice 

and comment period is designed to 

ensure a meaningful level of public 


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input, while avoiding the imposition of 

requirements that are in addition to, or 

duplicative of, those imposed under the 

APA or that are unreasonable or 

unnecessarily burdensome for State 

compliance. 

To facilitate public participation in 

the section 1332 waiver application 

process, the proposed regulations 

require the Secretary of HHS to provide 

the public with notice of a section 1332 

waiver application that has been 

preliminarily determined to be 

complete, including any supplemental 

materials received from a State during 

the Federal public notice and comment 

period, as well as regular updates for the 

status of a State’s section 1332 waiver 

application. In addition, the Secretary of 

HHS will provide the public with 

information relating to (A) where copies 

of the section 1332 waiver application 

are available for public review and 

comment; (B) how and where written 

comments may be submitted and 

reviewed by the public, and the 

timeframe during which comments may 

be submitted; and (C) any public 

comments received during the Federal 

public notice and comment period. 

Following the conclusion of the 

Federal notice and comment period, but 

in no event later than 180 days 

following the preliminary determination 

by the Secretaries that a State’s 

application for a section 1332 waiver is 

complete, the final decision of the 

Secretaries on a State’s section 1332 

waiver application will be issued by the 

Secretary of HHS. 

F. Monitoring and Compliance (31 CFR 

33.120 and 45 CFR 155.1320) 

As section 1332 waivers are likely to 

a have a significant impact on 

individuals, States and the Federal 

government, the proposed regulations 

establish processes and methodologies 

to ensure that the Secretaries receive 

adequate and appropriate information 

regarding the effectiveness of section 

1332 waivers (consistent with section 

1332(a)(4)(B)(iv) of the Affordable Care 

Act). 

Under 31 CFR 33.120(a) and 45 CFR 

155.1320(a) of the proposed regulations, 

a State is required to comply with all 

applicable Federal laws, regulations, 

policy statements and Departmental 

guidance unless a law or regulation has 

specifically been waived. Further, the 

proposed regulations require a State to 

come into compliance with any changes 

in Federal law, regulation, or policy 

affecting section 1332 waivers within 

the timeframes specified in law, 

regulation, interpretive policy, or 

guidance, unless the provision being 

changed is expressly waived, and to 

comply with the terms and conditions 

of the agreement entered into between 

the Secretaries and the State to 

implement a section 1332 waiver, or the 

section 1332 waiver will be suspended 

or terminated in whole or in part by the 

Secretaries. 

Under 31 CFR 33.120(b) and 45 CFR 

155.1320(b) of the proposed regulations, 

as part of the terms and conditions of 

any section 1332 waiver, a State must 

conduct periodic reviews related to the 

implementation of the waiver. The 

Secretaries will review, and when 

appropriate investigate, documented 

complaints that a State is failing to 

materially comply with requirements 

specified in the terms and conditions of 

the section 1332 waiver. In addition, the 

Secretaries will share with the State any 

complaint that has been received, and 

notify the State of any applicable 

monitoring and compliance issues. 

Under 31 CFR 33.120(c) and 45 CFR 

155.1320(c) of the proposed regulations, 

to ensure continued public input after 

the initial 6 months of the waiver’s 

implementation, and annually 

thereafter, States are required to hold a 

public forum at which members of the 

public have an opportunity to provide 

comments on the progress of the section 

1332 waiver. The proposed regulation 

further requires States to include a 

summary of this forum to the Secretary 

of HHS as part of the quarterly and 

annual reporting requirements under 31 

CFR 33.124 and 45 CFR 155.1324. 

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

CFR 155.1320(c)(1) of the proposed 

regulations, States are required to 

publish the date, time, and location of 

the public forum in a prominent 

location on the State’s public Web site 

at least 30 days prior to the date of the 

planned public forum. 

Under 31 CFR 33.120(d) and 45 CFR 

155.1320(d) of the proposed regulations, 

the Secretaries reserve the right to 

suspend or terminate a section 1332 

waiver, in whole or in part, any time 

before the date of expiration, if the 

Secretaries determine that the State has 

materially failed to comply with the 

terms and conditions of the section 1332 

waiver. In the event that all or a portion 

section 1332 waiver is terminated or 

suspended by the Secretaries, or if all or 

a portion of the section 1332 waiver is 

withdrawn, Federal funding is limited 

to normal closeout costs associated with 

an orderly termination of the section 

1332 waiver, as described in 31 CFR 

33.120(e) and 45 CFR 155.1320(e). 

Under 31 CFR 33.120(f) and 45 CFR 

155.1320(f) of the proposed regulations, 

in the event that the Secretaries 

undertake an independent evaluation of 

any component of the section 1332 

waiver, the State must cooperate fully 

with the Secretaries or the independent 

evaluator selected by the Secretaries. 

This cooperation includes, but is not 

limited to, the submission of all 

necessary data and information to the 

Secretaries or the independent 

evaluator. 

G. State Reporting Requirements (31 

CFR 33.124 and 45 CFR 155.1324) 

Section 1332 of the Affordable Care 

Act requires that the Secretaries provide 

for a procedure for the periodic 

submission of reports by a State 

concerning the implementation of the 

program under a section 1332 waiver. 

In order for the Secretaries to 

effectively monitor the implementation 

of a waiver, the proposed regulations 

require a State to submit a quarterly 

progress report in accordance with the 

terms and conditions of the State’s 

section 1332 waiver. States are also 

required to submit an annual report, as 

described in 31 CFR 33.124(b) and 45 

CFR 155.1324(b), documenting the 

following: 

• The progress of the section 1332 

waiver; 

• Data on compliance with section 

1332(b)(1)(A) through (D) of the 

Affordable Care Act; 

• A summary of the annual postaward 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 are required to submit a draft 

annual report to the Secretary of Health 

and Human Services no later than 90 

days after the end of each waiver year. 

Within 60 days of receipt of comments 

from the Secretary of Health and Human 

Services, a State is required to submit a 

final annual report for the waiver year 

to the Secretary of Health and Human 

Services. Finally, a State is required to 

publish the draft and final annual 

reports on the State’s public Web site. 

The Secretaries intend to issue future 

guidance under section 1332 regarding 

periodic reports. 

H. Periodic Evaluation Requirements 

(31 CFR 33.128 and 45 CFR 155.1328) 

Section 1332 of the Affordable Care 

Act requires that the Secretaries provide 

for a procedure for the periodic 

evaluation of section 1332 waivers by 

the Secretary or Secretaries with 

jurisdiction over the provisions for 

which the waiver was granted. These 


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proposed regulations require that each 

periodic evaluation shall 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 are soliciting public 

comments regarding specific 

components of the periodic evaluation 

of a section 1332 waiver. Potential 

components of a periodic evaluation 

could include, but not be limited to, the 

impact of the waiver on the following: 

• Choice of health plans for 

individuals and employers; 

• Stability of coverage for individuals 

and employers; 

• Small businesses, individuals with 

pre-existing conditions, and the lowincome population; 

• The overall health care system in 

the State; and 

• Other States and the Federal 

government. 

The Secretaries intend to issue future 

guidance under section 1332 regarding 

periodic evaluations. 

III. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, the Departments are required to 

provide notice in the Federal Register 

and solicit public comment before a 

collection of information requirement is 

approved by the Office of Management 

and Budget (OMB). To fairly evaluate 

whether an information collection 

should be approved by OMB, section 

3506(c)(2)(A) of the Paperwork 

Reduction Act of 1995 requires that the 

Departments solicit comment on the 

following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of the 

Departments. 

• The accuracy of the Departments’ 

estimate of the information collection 

burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

The Departments have no way to 

accurately quantify the burden until the 

provisions that section 1332 authorizes 

the Secretaries to waive pursuant to an 

application by a State take effect in 

2014. The Departments are soliciting 

public comments on the annual number 

of waiver applications that the 

Departments may receive, and will 

reevaluate this issue in future guidance. 

With that said, the Departments have 

developed estimates of the burden 

associated with information collection 

requirements in this proposed 

regulation. 

The Departments are soliciting public 

comment on each of these issues for the 

following sections of this document that 

contain information collection 

requirements (ICRs): 

A. ICRs Regarding Application 

Procedures (31 CFR 33.108 and 45 CFR 

155.1308) 

31 CFR 33.108 and 45 CFR 155.1308 

of the proposed regulations establish the 

application process for section 1332 

waivers. A State’s application for 

approval of a section 1332 waiver must 

be submitted to CMS as both printed 

and electronic documents. Paragraph 

(a)(2)(iv) of 31 CFR 33.108 and 45 CFR 

155.1308 specify that applications for a 

section 1332 waiver will not be 

considered complete if they do not 

contain written evidence of compliance 

with the State public notice and 

comment process described in 31 CFR 

33.112 and 45 CFR 155.1312, as well as 

the information specified in paragraph 

(a)(2)(iv)(C) and (D) of 31 CFR 33.108 

and 45 CFR 155.1308. 

The burden associated with the 

requirements in 31 CFR 33.108 and 45 

CFR 155.1308 is the time and effort 

necessary for a State to develop and 

submit a complete application for a 

section 1332 waiver. The Departments 

estimate that it will take 200 hours for 

a State to develop and submit a 

complete section 1332 waiver 

application, at a total cost of $4,134. 

B. ICRs Regarding State Public Notice 

Requirements (31 CFR 33.112 and 45 

CFR 155.1312) 

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

45 CFR 155.1312 of the proposed 

regulations require a State to provide a 

public notice and comment period 

regarding applications for section 1332 

waivers. 31 CFR 33.112 and 45 CFR 

155.1312 specify that prior to 

submitting an application to HHS and 

Treasury for a section 1332 waiver, the 

State must provide a public notice and 

comment period sufficient to ensure a 

meaningful level of public input. The 

public notice must address the 

information requirements listed in 

paragraphs (b)(1) through (4) of 31 CFR 

33.112 and 45 CFR 155.1312. 

The burden estimate associated with 

this requirement is the time and effort 

necessary to develop and publish a 

public notice that complies with the 

aforementioned information 

requirements. The Departments estimate 

that each State submitting an 

application for a section 1332 waiver 

will require 40 hours to comply with the 

requirements in this section, at a total 

cost of $827 per State. 

Paragraph (c) of 31 CFR 33.112 and 45 

CFR 155.1312 specify that after issuing 

the public notice and prior to 

submitting an application for a section 

1332 waiver, a State must conduct 

public hearings regarding the State’s 

waiver application. The minimum 

burden associated with this requirement 

is the time and effort necessary for a 

State to conduct public hearings prior to 

submitting an application for a section 

1332 waiver. While this requirement is 

subject to the PRA, the Departments 

believe the associated burden is exempt 

under 5 CFR 1320.3(h)(4). Facts or 

opinions submitted in response to 

general solicitations of comments from 

the public, published in the Federal 

Register or other publications, 

regardless of the form or format thereof, 

provided that no person is required to 

supply specific information pertaining 

to the commenter, other than that 

necessary for self-identification, as a 

condition of the agency’s full 

consideration of the comment are not 

subject to the PRA. 

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

45 CFR 155.1312 require States with one 

or more federally-recognized Indian 

tribes to consult with such tribes before 

submitting a section 1332 waiver 

application. Paragraph (a)(2)(iv)(B) of 31 

CFR 33.108 and 45 CFR 155.1308 

explain that documentation of the 

State’s public notice, which 

incorporates this consultation, must be 

included in the waiver application. 

The burden associated with these 

requirements is both the time and effort 

necessary for a State to conduct its tribal 

consultations and the time and effort 

necessary to notify CMS of the State’s 

compliance with paragraph (a)(2)(iv)(B) 

of 31 CFR 33.108 and 45 CFR 155.1308. 

The Departments estimate that each 

State submitting an application for a 

section 1332 waiver will require 40 

hours to both conduct its tribal 

consultations and to submit the 

aforementioned evidence to CMS, at a 

total cost of $827. 

C. ICRs Regarding Monitoring and 

Compliance (31 CFR 33.120 and 45 CFR 

155.1320) 

31 CFR 33.120 and 45 CFR 155.1320 

of the proposed regulations require 

States to periodically perform reviews of 

the implementation of the section 1332 

waiver. The Departments estimate that it 

will take a State 40 hours annually to 

periodically review the waiver’s 

implementation, at a total cost of $827. 

Paragraph (c) of 31 CFR 33.120 and 45 

CFR 155.1320 of the proposed 


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regulations further specifies that at least 

6 months after the implementation date 

of the waiver and annually thereafter, 

the State must hold a public forum to 

solicit comments on the progress of a 

section 1332 waiver. As proposed in 

paragraph (c)(1) of 31 CFR 33.120 and 

45 CFR 155.1320, the State must publish 

the date, time, and location of the public 

forum in a prominent location on the 

State’s public Web site, at least 30 days 

prior to the date of the planned public 

forum. 

The burden associated with these 

provisions includes the time and effort 

necessary to conduct the public meeting 

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 of the proposed 

regulations requires States to submit 

quarterly reports to CMS in accordance 

with the terms and conditions of a 

State’s approved section 1332 waiver. 

The burden associated with this 

reporting requirement is the time and 

effort necessary to submit quarterly 

reports to CMS. The Departments 

estimate that it will take 10 hours per 

quarter for each State to comply with 

this reporting requirement, for a total of 

40 hours per year, at a total annual cost 

of $827. 

Paragraph (b) of 31 CFR 33.124 and 45 

CFR 155.1324 of the proposed 

regulations requires States to submit 

annual reports to CMS documenting the 

information listed in paragraph (b)(1) 

through (4) of 31 CFR 33.124 and 45 

CFR 155.1324. As part of the submission 

process, paragraph (c) of 31 CFR 33.124 

and 45 CFR 155.1324 requires States to 

submit draft annual reports to CMS no 

later than 90 days after the end of each 

waiver year, or as specified in the 

State’s terms and conditions. The 

burden associated with this reporting 

requirement is the time and effort 

necessary to submit draft annual reports 

to CMS. The Departments estimate that 

it will take 24 hours for each State to 

comply with this reporting requirement, 

at a total cost of $496. 

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

45 CFR 155.1324 of the proposed 

regulations specifies that within 60 days 

of receipt of comments from CMS, the 

State must submit to CMS the final 

annual report for the waiver year. While 

this requirement is subject to the PRA, 

the Departments believe the associated 

burden is exempt under 5 CFR 

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

or solicited through non-standardized 

follow-up questions designed to clarify 

responses to approved collections of 

information are not subject to the PRA. 

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

45 CFR 155.1324 of the proposed 

regulations specify that the draft and 

final annual reports must be published 

on the State’s public Web site. The 

burden associated with this is the time 

and effort required for a State to post the 

aforementioned information on the 

State’s public Web site. The 

Departments estimate that it will take 2 

hours for each State to comply with this 

requirement, at a total cost of $42. 

E. ICRs Regarding Periodic Evaluation 

Requirements (31 CFR 33.128 and 45 

CFR 155.1328) 

31 CFR 33.128 and 45 CFR 155.1328 

of the proposed regulations specify that 

the Secretary of Health and Human 

Services and the Secretary of the 

Treasury shall periodically evaluate the 

implementation of section 1332 waivers. 

One potential option for satisfying this 

requirement is for a State to design and 

conduct an evaluation, with Federal 

approval of the evaluation design and 

interim and final reports. The burden 

associated with this approach is the 

time and effort necessary to design and 

execute an evaluation for a section 1332 

waiver. The Departments estimate that it 

will take a State 80 hours to develop an 

evaluation design, 80 hours to develop 

and submit an interim evaluation report, 

and 36 hours to publish CMS-approved 

evaluations on a State’s public Web site. 

The Departments estimate that it will 

take a State 196 hours over the course 

of a 5-year waiver term to complete 

these activities at a total cost of $4,051. 

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/mainte- nance 

costs 

($) 

Total cost 

($) 

31 CFR 33.108 and 45 CFR 155.1308 ..... 0938–New X 1 200 n/a 20.67 n/a 0 n/a 

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

45 CFR 155.1312.

0938–New X 1 40 n/a 20.67 n/a 0 n/a 

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

45 CFR 155.1312.

0938–New X 1 40 n/a 20.67 n/a 0 n/a 

Paragraph (b)(1) of 31 CFR 33.120 and 

45 CFR 155.1320.

0938–New X 1 40 n/a 20.67 n/a 0 n/a 

Paragraph (a) of 31 CFR 33.124 and 45 

CFR 155.1324.

0938–New X 4 10 n/a 20.67 n/a 0 n/a 

Paragraph (b) of 31 CFR 33.124 and 45 

CFR 155.1324.

0938–New X 1 24 n/a 20.67 n/a 0 n/a 

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

45 CFR 155.1324.

0938–New X 1 2 n/a 20.67 n/a 0 n/a 

31 CFR 33.128 and 45 CFR 155.1328 ..... 0938–New X 1 196 n/a 20.67 n/a 0 n/a 

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


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13560 Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Proposed Rules 

If you comment on these information 

collection and recordkeeping 

requirements, please do either of the 

following: 

1. Submit your comments 

electronically as specified in the 

ADDRESSES section of this proposed rule; 

or 

2. Submit your comments to the 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Attention: CMS Desk Officer 

[CMS–9987–P]; Fax: (202) 395–6974; or 

E-mail: OIRA_submission@omb.eop.gov. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a control number 

assigned by OMB. 

IV. Response to Comments 

Because of the large number of public 

comments the Departments normally 

receive on Federal Register documents, 

the Departments are not able to 

acknowledge or respond to them 

individually. The Departments will 

consider all comments the Departments 

receive by the date and time specified 

in the DATES section of this preamble, 

and, when the Departments proceed 

with a subsequent document, the 

Departments will respond to the 

comments in the preamble to that 

document. 

V. Regulatory Impact Statement 

The Departments have examined the 

impacts of this proposed rule as 

required by Executive Order 13563 on 

Improving Regulation and Regulatory 

Review (January 18, 2011), Executive 

Order 12866 on Regulatory Planning 

and Review (September 30, 1993), the 

Regulatory Flexibility Act (RFA) (5 

U.S.C. 601 et seq.), section 202 of the 

Unfunded Mandates Reform Act of 1995 

(Pub. L. 104–4), Executive Order 13132 

on Federalism (August 4, 1999), and the 

Congressional Review Act (5 U.S.C. 

804(2)). 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

if regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). This rule has been 

designated a ‘‘significant regulatory 

action’’ although not economically 

significant, under section 3(f) of 

Executive Order 12866. Accordingly, 

the rule has been reviewed by the Office 

of Management and Budget. 

The RFA requires agencies to analyze 

options for regulatory relief for small 

entities, if a rule has a significant impact 

on a substantial number of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other health care 

providers and suppliers are small 

entities, either by being nonprofit 

organizations or by meeting the SBA 

definition of a small business and 

having revenues of less than $7 million 

to $34.5 million in any 1 year. (For 

details, see the Small Business 

Administration’s final rule that set forth 

size standards for health care industries, 

at 65 FR 69432, November 17, 2000.) 

Individuals and States are not included 

in the definition of a small entity. The 

Departments are not preparing an 

analysis for the RFA because the 

Departments have determined, and the 

Secretaries certify, that this proposed 

rule will not have a significant impact 

on a substantial number of small 

entities. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

(Pub. L. 104–4) also requires that 

agencies assess anticipated costs and 

benefits before issuing any rule whose 

mandates require spending in any 1 year 

of $100 million in 1995 dollars, updated 

annually for inflation. In 2011, that 

threshold is approximately $136 

million. Because this rule does not 

mandate State participation in section 

1332 waivers, there is no obligation for 

the State to make any change to their 

existing programs. As a result, there is 

no mandate for the State. Therefore, the 

Departments estimate this rule will not 

mandate expenditures in the threshold 

amount of $136 million in any 1 year. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

Since this regulation would not impose 

costs on State or local governments, the 

requirements of Executive Order 13132 

are not applicable. In accordance with 

the provisions of Executive Order 

12866, this regulation was 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 proposes to amend 31 CFR 

subtitle A to add new part 33 to read as 

follows: 

PART 33—WAIVERS FOR STATE 

INNOVATION 

Sec. 

33.100 Basis and purpose. 

33.102 Coordinated waiver process. 

33.104 Definitions. 

33.108 Application procedures. 

33.112 State public notice requirements. 

33.116 Federal public notice and approval 

process. 

33.120 Monitoring and compliance. 

33.124 State reporting requirements. 

33.128 Periodic evaluation requirements. 

Authority: Sec. 1332, Pub. L. 111–148, 124 

Stat. 119 

§ 33.100 Basis and purpose. 

(a) Statutory basis. This part 

implements provisions of section 1332 

of the Patient Protection and Affordable 

Care Act (Affordable Care Act), Public 

Law 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 


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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 section 1115 demonstrations, if 

applicable, and the procedures under 

any other applicable Federal law under 

which the State seeks a waiver. 

(b) Coordinated process for section 

1332 waivers. A State seeking a section 

1332 waiver must submit a waiver 

application to the Secretary of Health 

and Human Services. Any application 

submitted to the Secretary of Health and 

Human Services that requests to waive 

sections 36B, 4980H, and 5000A of the 

Internal Revenue Code, in accordance 

with section 1332(a)(2)(D) of the 

Affordable Care Act, shall upon receipt 

be transmitted by the Secretary of 

Health and Human Services to the 

Secretary to be reviewed in accordance 

with 31 CFR part 33. 

§ 33.104 Definitions. 

For the purposes of this part: 

Complete application means an 

application that has been submitted and 

for which the Secretary and the 

Secretary of Health and Human Services 

have made a preliminary determination 

that it includes all required information 

and satisfies all requirements that are 

described in § 33.108(a)(2)(iv). 

Public notice means a notice issued 

by a government agency or legislative 

body that contains sufficient detail to 

notify the public at large of a proposed 

action consistent with § 33.112. 

Section 1332 waiver means a Waiver 

for State Innovation under section 1332 

of the Affordable Care Act. 

§ 33.108 Application procedures. 

(a) Initial waiver applications—(1) 

Acceptable formats for applications. (i) 

Applications for initial approval of a 

section 1332 waiver shall be submitted 

in both printed and electronic formats to 

the Secretary of Health and Human 

Services. 

(ii) [Reserved] 

(2) Guidelines for applications. (i) 

Each application for a section 1332 

waiver will be subject to a preliminary 

review by the Secretary and the 

Secretary of Health and Human 

Services, who will make a preliminary 

determination that the application is 

complete. A submitted application will 

not be deemed received until the 

Secretary and the Secretary of Health 

and Human Services have made the 

preliminary determination that the 

application is complete. 

(A) The Secretary and the Secretary of 

Health and Human Services will 

complete the preliminary review of the 

application within 45 days after it is 

submitted. 

(B) If the Secretary and the Secretary 

of Health and Human Services 

determine that the application is not 

complete, the Secretary of Health and 

Human Services will send the State a 

written notice of the elements missing 

from the application. 

(C) The preliminary determination 

that an application is complete does not 

preclude a finding during the 180-day 

Federal decision-making period that a 

necessary element of the application is 

missing or insufficient. 

(ii) Upon making the preliminary 

determination that an application is 

complete, as defined in this part, the 

Secretary of Health and Human Services 

will send the State a written notice 

informing the State that the Secretary 

and the Secretary of Health and Human 

Services have made such a preliminary 

determination. That date will also mark 

the beginning of the Federal public 

notice process and the 180-day Federal 

decision-making period. 

(iii) Upon receipt of a complete 

application for an initial section 1332 

waiver, the Secretary of Health and 

Human Services will— 

(A) Make available to the public the 

application, and all related State 

submissions, including all supplemental 

information received from the State 

following the receipt of a complete 

application for a section 1332 waiver. 

(B) Indicate the status of the 

application. 

(iv) An application for initial approval 

of a section 1332 waiver will not be 

considered complete unless the 

application meets all of the following 

conditions: 

(A) Complies with paragraph (a) of 

this section. 

(B) Provides written evidence of the 

State’s compliance with the public 

notice requirements set forth in 

§ 33.112. 

(C) Provides all of the following: 

(1) A comprehensive description of 

the State legislation and program to 

implement a plan meeting the 

requirements for a waiver under section 

1332; 

(2) A copy of the enacted State 

legislation authorizing such waiver 

request, as required under section 

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

(3) A list of the provisions of law that 

the State seeks to waive, including a 

brief description of the reason for the 

specific requests; and 

(4) The analyses, actuarial 

certifications, data, assumptions, 

analysis, targets and other information 

set forth in paragraph (a)(2)(iv)(D) of this 

section sufficient to provide the 

Secretary and the Secretary of Health 

and Human Services with the necessary 

data to determine that the State’s 

proposed waiver: 

(i) Will, as required under section 

1332(b)(1)(A) of the Affordable Care Act 

(the comprehensive coverage 

requirement), provide coverage that is at 

least as comprehensive as the coverage 

defined in section 1302(b) of the 

Affordable Care Act and offered through 

Exchanges established under the 

Affordable Care Act as certified by the 

Office of the Actuary of the Centers for 

Medicare and Medicaid Services based 

on sufficient data from the State and 

from comparable States about their 

experience with programs created by the 

Affordable Care Act and the provisions 

of the Affordable Care Act that the State 

seeks to waive; 

(ii) Will, as required under section 

1332(b)(1)(B) of the Affordable Care Act 

(the affordability requirement), provide 

coverage and cost sharing protections 

against excessive out-of-pocket 

spending that are at least as affordable 

as the provisions of Title I of the 

Affordable Care Act would provide; 

(iii) Will, as required under section 

1332(b)(1)(C) of the Affordable Care Act 

(the scope of coverage requirement), 

provide coverage to at least a 

comparable number of its residents as 

the provisions of Title I of the 

Affordable Care Act would provide; and 

(iv) Will not, as prohibited under 

section 1332(b)(1)(D) of the Affordable 

Care Act (the Federal deficit 

requirement), increase the Federal 

deficit. 

(D) Contains the following supporting 

information: 

(1) Actuarial analyses and actuarial 

certifications. Actuarial analyses and 

actuarial certifications to support the 

State’s estimates that the proposed 

waiver will comply with the 


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13562 Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Proposed Rules 

comprehensive coverage requirement, 

the affordability requirement, and the 

scope of coverage requirement. 

(2) Economic analyses. Economic 

analyses to support the State’s estimates 

that the proposed waiver will comply 

with the comprehensive coverage 

requirement, the affordability 

requirement, the scope of coverage 

requirement and the Federal deficit 

requirement, including: 

(i) A detailed 10-year budget plan that 

is deficit neutral to the Federal 

government, as prescribed by section 

1332(a)(1)(B)(ii) of the Affordable Care 

Act, and includes all costs under the 

waiver, including administrative costs 

and other costs to the Federal 

government, if applicable; and 

(ii) A detailed analysis regarding the 

estimated impact of the waiver on 

health insurance coverage in the State. 

(3) Data and assumptions. The data 

and assumptions used to demonstrate 

that the State’s proposed waiver is in 

compliance with the comprehensive 

coverage requirement, the affordability 

requirement, the scope of coverage 

requirement and the Federal deficit 

requirement, including: 

(i) Information on the age, income, 

health expenses and current health 

insurance status of the relevant State 

population; the number of employers by 

number of employees and whether the 

employer offers insurance; crosstabulations of these variables; and an 

explanation of data sources and quality; 

and 

(ii) An explanation of the key 

assumptions used to develop the 

estimates of the effect of the waiver on 

coverage and the Federal budget, such 

as individual and employer 

participation rates, behavioral changes, 

premium and price effects, and other 

relevant factors. 

(4) Additional information. 

Additional information supporting the 

State’s proposed waiver, including: 

(i) An explanation as to whether the 

waiver increases or decreases the 

administrative burden on individuals, 

insurers, and employers, and if so, how 

and why; 

(ii) An explanation of how the waiver 

will affect the implementation of the 

provisions of the Affordable Care Act 

which the State is not requesting to 

waive in the State and at the Federal 

level; 

(iii) An explanation of how the waiver 

will affect residents who need to obtain 

health care services out-of-State, as well 

as the States in which such residents 

may seek such services; 

(iv) If applicable, an explanation as to 

how the State will provide the Federal 

government with all information 

necessary to administer the waiver at 

the Federal level; and 

(v) An explanation of how the State’s 

proposal will address potential 

individual, employer, insurer, or 

provider compliance, waste, fraud and 

abuse within the State or in other States. 

(5) Reporting targets. Quarterly, 

annual, and cumulative targets for the 

comprehensive coverage requirement, 

the affordability requirement, the scope 

of coverage requirement, and the 

Federal deficit requirement. 

(6) Other information. Other 

information consistent with guidance 

provided by the Secretary and the 

Secretary of Health and Human 

Services. 

(b) Additional supporting 

information. (1) During the Federal 

review process, the Secretary may 

request additional supporting 

information from the State as needed to 

address public comments or to address 

issues that arise in reviewing the 

application. 

(2) Requests for additional 

information, and responses to such 

requests, will be made available to the 

public in the same manner as 

information described in § 33.116(b). 

§ 33.112 State public notice requirements. 

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

application for a new section 1332 

waiver to the Secretary of Health and 

Human Services for review and 

consideration, a State must provide a 

public notice and comment period 

sufficient to ensure a meaningful level 

of public input for the application for a 

section 1332 waiver. 

(2) Such public notice and comment 

period shall include, for a State with 

one or more federally-recognized Indian 

tribes within its borders, a separate 

process for meaningful consultation 

with such tribes. 

(b) Public notice and comment period. 

The State shall make available at the 

beginning of the public notice and 

comment period, through its Web site or 

other effective 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. 


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(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 being changed is expressly 

waived. 

(2) A State must comply with the 

terms and conditions of the agreement 

between the Secretary, the Secretary of 

Health and Human Services, and the 

State to implement a section 1332 

waiver. 

(b) Implementation reviews. (1) The 

terms and conditions of an approved 

section 1332 waiver will provide that 

the State will perform periodic reviews 

of the implementation of the section 

1332 waiver. 

(2) The Secretary and the Secretary of 

Health and Human Services will review 

documented complaints that a State is 

failing to comply with requirements 

specified in the terms and conditions of 

any approved section 1332 waiver. 

(3) The Secretary and the Secretary of 

Health and Human Services will 

promptly share with a State any 

complaint that the Secretary and the 

Secretary of Health 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 postaward public forum, held in accordance 

with § 33.120(c), including all public 

comments received at such forum 

regarding the progress of the section 

1332 waiver and action taken in 

response to such concerns or comments. 

(4) Other information consistent the 

State’s approved terms and conditions. 

(c) Submitting and publishing annual 

reports. A State must submit a draft 

annual report to the Secretary of Health 

and Human Services no later than 90 

days after the end of each waiver year, 

or as specified in the waiver’s terms and 

conditions. 

(1) Within 60 days of receipt of 

comments from the Secretary of Health 

and Human Services, a State must 

submit to the Secretary of Health and 

Human Services a final annual report 

for the waiver year. 

(2) The draft and final annual reports 

are to be published on a State’s public 

Web site within 30 days of submission 

and approval to the Secretary of Health 

and Human Services, respectively. 

§ 33.128 Periodic evaluation requirements. 

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

Secretary of Health and Human Services 

shall periodically evaluate the 

implementation of a program under a 

section 1332 waiver consistent with 

guidance published by the Secretary 

and the Secretary of Health and Human 

Services and any terms and conditions 

governing the section 1332 waiver. 

(2) Each periodic evaluation must 

include a review of the annual report or 

reports submitted by the State in 

accordance with § 33.124 that relate to 

the period of time covered by the 

evaluation. 

Department of Health and Human 

Services 

45 CFR Subtitle A 

For the reasons set forth in the 

preamble, the Department of Health and 

Human Services proposes to amend 45 

CFR subtitle A, subchapter B to add new 

Part 155 to read as follows: 


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13564 Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Proposed Rules 

PART 155—WAIVERS FOR STATE 

INNOVATION 

Subparts A Through M [Reserved] 

Subpart N—State Flexibility 

Sec. 

155.1300 Basis and purpose. 

155.1302 Coordinated waiver process. 

155.1304 Definitions. 

155.1308 Application procedures. 

155.1312 State public notice requirements. 

155.1316 Federal public notice and 

approval process. 

155.1320 Monitoring and compliance. 

155.1324 State reporting requirements. 

155.1328 Periodic evaluation requirements. 

Authority: Sec. 1332, Pub. L. 111–148, 124 

Stat. 119. 

Subparts A Through M [Reserved] 

Subpart N—State Flexibility 

§ 155.1300 Basis and purpose. 

(a) Statutory basis. This subpart 

implements provisions of section 1332 

of the Patient Protection and Affordable 

Care Act (Affordable Care Act), Public 

Law 111–148, relating to Waivers for 

State Innovation, which the Secretary 

may authorize for plan years beginning 

on or after January 1, 2017. Section 1332 

of the Affordable Care Act requires the 

Secretary to issue regulations that 

provide for all of the following: 

(1) A process for public notice and 

comment at the State level, including 

public hearings, sufficient to ensure a 

meaningful level of public input. 

(2) A process for the submission of an 

application that ensures the disclosure 

of all of the following: 

(i) The provisions of law that the State 

involved seeks to waive. 

(ii) The specific plans of the State to 

ensure that the waiver will meet all 

requirements specified in section 1332. 

(3) A process for the provision of 

public notice and comment after a 

waiver application is received by the 

Secretary, that is sufficient to ensure a 

meaningful level of public input and 

that does not impose requirements that 

are in addition to, or duplicative of, 

requirements imposed under the 

Administrative Procedures Act, or 

requirements that are unreasonable or 

unnecessarily burdensome with respect 

to State compliance. 

(4) A process for the submission of 

reports to the Secretary by a State 

relating to the implementation of a 

waiver. 

(5) A process for the periodic 

evaluation by the Secretary of programs 

under waivers. 

(b) Purpose. This subpart sets forth 

certain procedural requirements for 

Waivers for State Innovation under 

section 1332 of the Affordable Care Act. 

§ 155.1302 Coordinated waiver process. 

(a) Coordination with applications for 

waivers under other Federal laws. A 

State may submit a single application to 

the Secretary for a waiver under section 

1332 of the Affordable Care Act and a 

waiver under one or more of the existing 

waiver processes applicable under titles 

XVIII, XIX, and XXI of the Social 

Security Act, or under any other Federal 

law relating to the provision of health 

care items or services, provided that 

such application is consistent with the 

procedures described in this part, the 

procedures for section 1115 

demonstrations, if applicable, and the 

procedures under any other applicable 

Federal law under which the State seeks 

a waiver. 

(b) Coordinated process for section 

1332 waivers. A State seeking a section 

1332 waiver must submit a waiver 

application to the Secretary. Any 

application submitted to the Secretary 

that requests to waive sections 36B, 

4980H, and 5000A of the Internal 

Revenue Code, in accordance with 

section 1332(a)(2)(D) of the Affordable 

Care Act, shall upon receipt be 

transmitted by the Secretary to the 

Secretary of the Treasury to be reviewed 

in accordance with 31 CFR part 33. 

§ 155.1304 Definitions. 

For the purposes of this subpart: 

Complete application means an 

application that has been submitted and 

for which the Secretary and the 

Secretary of the Treasury have made a 

preliminary determination that it 

includes all required information and 

satisfies all requirements that are 

described in § 155.1308(a)(2)(iv). 

Public notice means a notice issued 

by a government agency or legislative 

body that contains sufficient detail to 

notify the public at large of a proposed 

action consistent with § 155.1312. 

Section 1332 waiver means a Waiver 

for State Innovation under section 1332 

of the Affordable Care Act. 

§ 155.1308 Application procedures. 

(a) Initial waiver applications—(1) 

Acceptable formats for applications. (i) 

Applications for initial approval of a 

section 1332 waiver shall be submitted 

in both printed and electronic formats to 

the Secretary. 

(ii) [Reserved] 

(2) Guidelines for applications. (i) 

Each application for a section 1332 

waiver will be subject to a preliminary 

review by the Secretary and the 

Secretary of the Treasury will make a 

preliminary determination that the 

application is complete. A submitted 

application will not be deemed received 

until the Secretary and the Secretary of 

the Treasury have made the preliminary 

determination that the application is 

complete. 

(A) The Secretary and the Secretary of 

the Treasury will complete the 

preliminary review of the application 

within 45 days after it is submitted. 

(B) If the Secretary and the Secretary 

of the Treasury determine that the 

application is not complete, the 

Secretary will send the State a written 

notice of the elements missing from the 

application. 

(C) The preliminary determination 

that an application is complete does not 

preclude a finding during the 180-day 

Federal decision-making period that a 

necessary element of the application is 

missing or insufficient. 

(ii) Upon making the preliminary 

determination that an application is 

complete, as defined in this part, the 

Secretary will send the State a written 

notice informing the State that the 

Secretary and the Secretary of the 

Treasury have made such a preliminary 

determination. That date will also mark 

the beginning of the Federal public 

notice process and the 180-day Federal 

decision-making period. 

(iii) Upon receipt of a complete 

application for an initial section 1332 

waiver, the Secretary will— 

(A) Make available to the public the 

application, and all related State 

submissions, including all supplemental 

information received from the State 

following the receipt of a complete 

application for a section 1332 waiver. 

(B) Indicate the status of the 

application. 

(iv) An application for initial approval 

of a section 1332 waiver will not be 

considered complete unless the 

application meets all of the following 

conditions: 

(A) Complies with paragraph (a) of 

this section. 

(B) Provides written evidence of the 

State’s compliance with the public 

notice requirements set forth in 

§ 155.1312. 

(C) Provides all of the following: 

(1) A comprehensive description of 

the State legislation and program to 

implement a plan meeting the 

requirements for a waiver under section 

1332; 

(2) A copy of the enacted State 

legislation authorizing such waiver 

request, as required under section 

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

(3) A list of the provisions of law that 

the State seeks to waive including a 

brief description of the reason for the 

specific requests; and 

(4) The analyses, actuarial 

certifications, data, assumptions, 

analysis, targets and other information 


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set forth in paragraph (a)(2)(iv)(D) of this 

section sufficient to provide the 

Secretary and the Secretary of the 

Treasury with the necessary data to 

determine that the State’s proposed 

waiver: 

(i) Will, as required under section 

1332(b)(1)(A) of the Affordable Care Act 

(the comprehensive coverage 

requirement), provide coverage that is at 

least as comprehensive as the coverage 

defined in section 1302(b) of the 

Affordable Care Act and offered through 

Exchanges established under the 

Affordable Care Act as certified by the 

Office of the Actuary of the Centers for 

Medicare and Medicaid Services based 

on sufficient data from the State and 

from comparable States about their 

experience with programs created by the 

Affordable Care Act and the provisions 

of the Affordable Care Act that the State 

seeks to waive; 

(ii) Will, as required under section 

1332(b)(1)(B) of the Affordable Care Act 

(the affordability requirement), provide 

coverage and cost sharing protections 

against excessive out-of-pocket 

spending that are at least as affordable 

as the provisions of Title I of the 

Affordable Care Act would provide; 

(iii) Will, as required under section 

1332(b)(1)(C) of the Affordable Care Act 

(the scope of coverage requirement), 

provide coverage to at least a 

comparable number of its residents as 

the provisions of Title I of the 

Affordable Care Act would provide; and 

(iv) Will not, as prohibited under 

section 1332(b)(1)(D) of the Affordable 

Care Act (the Federal deficit 

requirement), increase the Federal 

deficit. 

(D) Contains the following supporting 

information: 

(1) Actuarial analyses and actuarial 

certifications. Actuarial analyses and 

actuarial certifications to support the 

State’s estimates that the proposed 

waiver will comply with the 

comprehensive coverage requirement, 

the affordability requirement, and the 

scope of coverage requirement; 

(2) Economic analyses. Economic 

analyses to support the State’s estimates 

that the proposed waiver will comply 

with the comprehensive coverage 

requirement, the affordability 

requirement, the scope of coverage 

requirement and the Federal deficit 

requirement, including: 

(i) A detailed 10-year budget plan that 

is deficit neutral to the Federal 

government, as prescribed by section 

1332(a)(1)(B)(ii) of the Affordable Care 

Act, and includes all costs under the 

waiver, including administrative costs 

and other costs to the Federal 

government, if applicable; and 

(ii) A detailed analysis regarding the 

estimated impact of the waiver on 

health insurance coverage in the State. 

(3) Data and assumptions. The data 

and assumptions used to demonstrate 

that the State’s proposed waiver is in 

compliance with the comprehensive 

coverage requirement, the affordability 

requirement, the scope of coverage 

requirement and the Federal deficit 

requirement, including: 

(i) Information on the age, income, 

health expenses and current health 

insurance status of the relevant State 

population; the number of employers by 

number of employees and whether the 

employer offers insurance; crosstabulations of these variables; and an 

explanation of data sources and quality; 

and 

(ii) An explanation of the key 

assumptions used to develop the 

estimates of the effect of the waiver on 

coverage and the Federal budget, such 

as individual and employer 

participation rates, behavioral changes, 

premium and price effects, and other 

relevant factors. 

(4) Additional information. 

Additional information supporting the 

State’s proposed waiver, including: 

(i) An explanation as to whether the 

waiver increases or decreases the 

administrative burden on individuals, 

insurers, and employers, and if so, how 

and why; 

(ii) An explanation of how the waiver 

will affect the implementation of the 

provisions of the Affordable Care Act 

which the State is not requesting to 

waive in the State and at the Federal 

level; 

(iii) An explanation of how the waiver 

will affect residents who need to obtain 

health care services out-of-State, as well 

as the States in which such residents 

may seek such services; 

(iv) If applicable, an explanation as to 

how the State will provide the Federal 

government with all information 

necessary to administer the waiver at 

the Federal level; and 

(v) An explanation of how the State’s 

proposal will address potential 

individual, employer, insurer, or 

provider compliance, waste, fraud and 

abuse within the State or in other States. 

(5) Reporting targets. Quarterly, 

annual, and cumulative targets for the 

comprehensive coverage requirement, 

the affordability requirement, the scope 

of coverage requirement and the Federal 

deficit requirement. 

(6) Other information. Other 

information consistent with guidance 

provided by the Secretary and the 

Secretary of the Treasury. 

(b) Additional supporting 

information. (1) During the Federal 

review process, the Secretary may 

request additional supporting 

information from the State as needed to 

address public comments or to address 

issues that arise in reviewing the 

application. 

(2) Requests for additional 

information, and responses to such 

requests, will be made available to the 

public in the same manner as 

information described in § 155.1316(b). 

§ 155.1312 State public notice 

requirements. 

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

application for a new section 1332 

waiver to the Secretary for review and 

consideration, a State must provide a 

public notice and comment period 

sufficient to ensure a meaningful level 

of public input for the application for a 

section 1332 waiver. 

(2) Such public notice and comment 

period shall include, for a State with 

one or more Federally-recognized 

Indian tribes within its borders, a 

separate process for meaningful 

consultation with such tribes. 

(b) Public notice and comment period. 

The State shall make available at the 

beginning of the public notice and 

comment period, through its Web site or 

other effective means of 

communication, and shall update as 

appropriate, a public notice that 

includes all of the following: 

(1) A comprehensive description of 

the application for a section 1332 

waiver to be submitted to the Secretary 

including information and assurances 

related to all statutory requirements and 

other information consistent with 

guidance provided by the Secretary and 

the Secretary of the Treasury. 

(2) Information relating to where 

copies of the application for a section 

1332 waiver are available for public 

review and comment. 

(3) Information relating to how and 

where written comments may be 

submitted and reviewed by the public, 

and the timeframe during which 

comments will be accepted. 

(4) The location, date, and time of 

public hearings that will be convened 

by the State to seek public input on the 

application for a section 1332 waiver. 

(c) Public hearings. (1) After issuing 

the public notice and prior to 

submitting an application for a new 

section 1332 waiver, a State must 

conduct public hearings regarding the 

State’s application. 

(2) Such public hearings shall provide 

an interested party the opportunity to 

learn about and comment on the 

contents of the application for a section 

1332 waiver. 


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13566 Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Proposed Rules 

(d) Submission of initial application. 

After the State public notice and 

comment period has concluded, the 

State may submit an application to the 

Secretary for an initial waiver in 

accordance with the requirements set 

forth in § 155.1308. 

§ 155.1316 Federal public notice and 

approval process. 

(a) General. The Federal public notice 

and approval process begins on the first 

business day after the Secretary and the 

Secretary of the Treasury determine that 

all elements for a complete application 

were documented and submitted to the 

Secretary. 

(b) Public notice and comment period. 

(1) Following a determination that a 

State’s application for a section 1332 

waiver is complete, the Secretary and 

the Secretary of the Treasury will 

provide for a public notice and 

comment period that is sufficient to 

ensure a meaningful level of public 

input and that does not impose 

requirements that are in addition to, or 

duplicative of, requirements imposed 

under the Administrative Procedures 

Act, or requirements that are 

unreasonable or unnecessarily 

burdensome with respect to State 

compliance. 

(2) At the beginning of the Federal 

notice and comment period, the 

Secretary will make available through 

its Web site and otherwise, and shall 

update as appropriate, public notice that 

includes all of the following: 

(i) The complete application for a 

section 1332 waiver, updates for the 

status of the State’s application, and any 

supplemental materials received from 

the State prior to and during the Federal 

public notice and comment period. 

(ii) Information relating to where 

copies of the application for a section 

1332 waiver are available for public 

review and comment. 

(iii) Information relating to how and 

where written comments may be 

submitted and reviewed by the public, 

and the timeframe during which 

comments will be accepted. 

(iv) Any public comments received 

during the Federal public notice and 

comment period. 

(c) Approval of a section 1332 waiver 

application. The final decision of the 

Secretary and the Secretary of the 

Treasury on a State application for a 

section 1332 waiver will be issued by 

the Secretary no later than 180 days 

after the determination by the Secretary 

and the Secretary of the Treasury that a 

complete application was received in 

accordance with § 155.1308. 

§ 155.1320 Monitoring and compliance. 

(a) General. (1) Following the 

issuance of a final decision to approve 

a section 1332 waiver by the Secretary 

and the Secretary of the Treasury, a 

State must comply with all applicable 

Federal laws, regulations, interpretive 

policy statements and interpretive 

guidance unless expressly waived. A 

State must, within the timeframes 

specified in law, regulation, policy or 

guidance, come into compliance with 

any changes in Federal law, regulation, 

or policy affecting section 1332 waivers, 

unless the provision being changed is 

expressly waived. 

(2) A State must comply with the 

terms and conditions of the agreement 

between the Secretary, the Secretary of 

the Treasury, and the State to 

implement a section 1332 waiver. 

(b) Implementation reviews. (1) The 

terms and conditions of an approved 

section 1332 waiver will provide that 

the State will perform periodic reviews 

of the implementation of the section 

1332 waiver. 

(2) The Secretary and the Secretary of 

the Treasury will review documented 

complaints that a State is failing to 

comply with requirements specified in 

the terms and conditions of any 

approved section 1332 waiver. 

(3) The Secretary and the Secretary of 

the Treasury will promptly share with a 

State any complaint that the Secretary 

and the Secretary of the Treasury has 

received and will also provide 

notification of any applicable 

monitoring and compliance issues. 

(c) Post award. Within at least 6 

months after the implementation date of 

a section 1332 waiver and annually 

thereafter, a State must hold a public 

forum to solicit comments on the 

progress of a section 1332 waiver. The 

State must hold the public forum at 

which members of the public have an 

opportunity to provide comments and 

must provide a summary of the forum 

to the Secretary as part of the quarterly 

report specified in § 155.1324(a) that is 

associated with the quarter in which the 

forum was held, as well as in the annual 

report specified in § 155.1324(b) that is 

associated with the year in which the 

forum was held. 

(1) The State must publish the date, 

time, and location of the public forum 

in a prominent location on the State’s 

public Web site, at least 30 days prior 

to the date of the planned public forum. 

(2) [Reserved] 

(d) Terminations and suspensions. 

The Secretary and the Secretary of the 

Treasury reserve the right to suspend or 

terminate a section 1332 waiver in 

whole or in part, at any time before the 

date of expiration, whenever the 

Secretaries determine that a State has 

materially failed to comply with the 

terms of a section 1332 waiver. 

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

section 1332 waiver is terminated or 

suspended, or if a portion of a section 

1332 waiver is withdrawn, Federal 

funding is limited to normal closeout 

costs associated with an orderly 

termination, suspension, or withdrawal, 

including service costs during any 

approved transition period, and 

administrative costs of disenrolling 

participants. 

(f) Federal evaluators. (1) A State 

must fully cooperate with the Secretary, 

the Secretary of the Treasury, or an 

independent evaluator selected by the 

Secretary or the Secretary of the 

Treasury to undertake an independent 

evaluation of any component of a 

section 1332 waiver. 

(2) As part of this required 

cooperation, a State must submit all 

requested data and information to the 

Secretary, the Secretary of the Treasury, 

or the independent evaluator. 

§ 155.1324 State reporting requirements. 

(a) Quarterly reports. A State must 

submit quarterly reports to the Secretary 

in accordance with the terms and 

conditions of the State’s section 1332 

waiver. These quarterly reports must 

include, but are not limited to, reports 

of any ongoing operational challenges 

and plans for and results of associated 

corrective actions. 

(b) Annual reports. A State must 

submit an annual report to the Secretary 

documenting all of the following: 

(1) The progress of the section 1332 

waiver. 

(2) Data on compliance with section 

1332(b)(1)(A) through (D) of the 

Affordable Care Act. 

(3) A summary of the annual postaward public forum, held in accordance 

with § 155.1320(c), including all public 

comments received at such forum 

regarding the progress of the section 

1332 waiver and action taken in 

response to such concerns or comments. 

(4) Other information consistent the 

State’s approved terms and conditions. 

(c) Submitting and publishing annual 

reports. A State must submit a draft 

annual report to the Secretary no later 

than 90 days after the end of each 

waiver year, or as specified in the 

waiver’s terms and conditions. 

(1) Within 60 days of receipt of 

comments from the Secretary, a State 

must submit to the Secretary the final 

annual report for the waiver year. 

(2) The draft and final annual reports 

are to be published on a State’s public 

Web site within 30 days of submission 


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Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Proposed Rules 13567 

and approval to the Secretary, 

respectively. 

§ 155.1328 Periodic evaluation 

requirements. 

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

Secretary of the Treasury shall 

periodically evaluate the 

implementation of a program under a 

section 1332 waiver consistent with 

guidance published by the Secretary 

and the Secretary of the Treasury and 

any terms and conditions governing the 

section 1332 waiver. 

(2) Each periodic evaluation must 

include a review of the annual report or 

reports submitted by the State in 

accordance with § 155.1324 that relate 

to the period of time covered by the 

evaluation. 

Authority: Sec. 1332 of the Patient 

Protection and Affordable Care Act (Pub. L. 

111–148). 

Approved: February 22, 2011. 

Donald M. Berwick, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: March 4, 2011. 

Kathleen Sebelius, 

Secretary of Health and Human Services. 

Approved: March 7, 2011. 

Michael F. Mundaca, 

Assistant Secretary of the Treasury (Tax 

Policy). 

[FR Doc. 2011–5583 Filed 3–10–11; 11:15 am] 

BILLING CODE 4510–29–P, 4120–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R03–OAR–2011–0099; FRL–9280–2] 

Approval and Promulgation of Air 

Quality Implementation Plans; 

Pennsylvania; Adoption of Control 

Techniques Guidelines for Flat Wood 

Paneling Surface Coating Processes 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: EPA is proposing to approve 

a State Implementation Plan (SIP) 

revision submitted by the 

Commonwealth of Pennsylvania 

(Pennsylvania). This SIP revision 

includes amendments to Chapter 121— 

General Provisions and Chapter 129— 

Standards for Sources of Title 25 of the 

Pennsylvania Code. Pennsylvania’s SIP 

revision meets the requirement to adopt 

Reasonably Available Control 

Technology (RACT) for sources covered 

by EPA’s Control Techniques 

Guidelines (CTG) standards for flat 

wood paneling surface coating processes 

and will help Pennsylvania attain and 

maintain the National Ambient Air 

Quality Standard (NAAQS) for ozone. 

This action is being taken under the 

Clean Air Act (CAA). 

DATES: Written comments must be 

received on or before April 13, 2011. 

ADDRESSES: Submit your comments, 

identified by Docket ID Number EPA– 

R03–OAR–2011–0099 by one of the 

following methods: 

A. http://www.regulations.gov. Follow 

the on-line instructions for submitting 

comments. 

B. E-mail: 

fernandez.cristina@epa.gov. 

C. Mail: EPA–R03–OAR–2011–0099, 

Cristina Fernandez, Associate Director, 

Office of Air Program Planning, 

Mailcode 3AP30, U.S. Environmental 

Protection Agency, Region III, 1650 

Arch Street, Philadelphia, Pennsylvania 

19103. 

D. Hand Delivery: At the previouslylisted EPA Region III address. Such 

deliveries are only accepted during the 

Docket’s normal hours of operation, and 

special arrangements should be made 

for deliveries of boxed information. 

Instructions: Direct your comments to 

Docket ID No. EPA–R03–OAR–2011– 

0099. EPA’s policy is that all comments 

received will be included in the public 

docket without change, and may be 

made available online at http:// 

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

Do not submit information that you 

consider to be CBI or otherwise 

protected through http:// 

www.regulations.gov or e-mail. The 

http://www.regulations.gov Web site is 

an ‘‘anonymous access’’ system, which 

means EPA will not know your identity 

or contact information unless you 

provide it in the body of your comment. 

If you send an e-mail comment directly 

to EPA without going through http:// 

www.regulations.gov, your e-mail 

address will be automatically captured 

and included as part of the comment 

that is placed in the public docket and 

made available on the Internet. If you 

submit an electronic comment, EPA 

recommends that you include your 

name and other contact information in 

the body of your comment and with any 

disk or CD–ROM you submit. If EPA 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EPA may not be 

able to consider your comment. 

Electronic files should avoid the use of 

special characters, any form of 

encryption, and be free of any defects or 

viruses. 

Docket: All documents in the 

electronic docket are listed in the 

http://www.regulations.gov index. 

Although listed in the index, some 

information is not publicly available, 

i.e., CBI or other information whose 

disclosure is restricted by statute. 

Certain other material, such as 

copyrighted material, is not placed on 

the Internet and will be publicly 

available only in hard copy form. 

Publicly available docket materials are 

available either electronically in http:// 

www.regulations.gov or in hard copy 

during normal business hours at the Air 

Protection Division, U.S. Environmental 

Protection Agency, Region III, 1650 

Arch Street, Philadelphia, Pennsylvania 

19103. Copies of the State submittal are 

available at the Pennsylvania 

Department of Environmental 

Protection, Bureau of Air Quality 

Control, P.O. Box 8468, 400 Market 

Street, Harrisburg, Pennsylvania 17105. 

FOR FURTHER INFORMATION CONTACT: 

Irene Shandruk, (215) 814–2166, or by 

e-mail at shandruk.irene@epa.gov. 

SUPPLEMENTARY INFORMATION: On 

January 4, 2011, the Pennsylvania 

Department of Environmental Protection 

(PADEP) submitted to EPA a SIP 

revision concerning the adoption of the 

CTG for flat wood paneling surface 

coating processes. 

I. Background 

Section 172(c)(1) of the CAA provides 

that SIPs for nonattainment areas must 

include reasonably available control 

measures (RACM), including RACT for 

sources of emissions. Section 

182(b)(2)(A) provides that for certain 

nonattainment areas, States must revise 

their SIPs to include RACT for sources 

of volatile organic compounds (VOC) 

emissions covered by a CTG document 

issued after November 15, 1990 and 

prior to the area’s date of attainment. 

CTGs are intended to provide state 

and local air pollution control 

authorities information that should 

assist them in determining RACT for 

VOCs from various sources, including 

flat wood paneling surface coatings. In 

developing these CTGs, EPA, among 

other things, evaluated the sources of 

VOC emissions from this industry and 

the available control approaches for 

addressing these emissions, including 

the costs of such approaches. Based on 

available information and data, EPA 

provided recommendations for RACT 

for VOCs from flat wood paneling. 

In June 1978, EPA published a CTG 

for flat wood paneling coatings (EPA– 


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