State Innovation Waivers: Frequently Asked Questions

Section 1332 of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) provides states with the option to waive specified requirements of the ACA. In the absence of these requirements, a state is to implement its own plan to provide health insurance coverage to state residents that meets the ACA’s terms. Under a state innovation waiver, a state can apply to waive ACA requirements related to qualified health plans, health insurance exchanges, premium tax credits, cost-sharing subsidies, the individual mandate, and the employer mandate. The state can apply to waive any or all of these requirements, in part or in their entirety. To obtain approval for a waiver application, a state must show that the plan it will implement in the absence of the waived provision(s) meets certain requirements. The state’s plan must ensure that as many state residents have health insurance coverage under the plan as would have had coverage absent the waiver, and the coverage must be as affordable and comprehensive as it would have been absent the waiver. Additionally, the state’s plan cannot increase the federal deficit. The Secretary of the Department of Health and Human Services (HHS) and the Secretary of the Treasury share responsibility for reviewing state innovation waiver applications and deciding whether to approve applications. State innovation waivers cannot extend longer than five years, unless a state requests continuation and the appropriate Secretary does not deny such request. The earliest a state innovation waiver could take effect was January 1, 2017. As of the date of this report, 21 states—Alaska, Colorado, Delaware, Georgia, Hawaii, Idaho, Maine, Maryland, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New York, North Dakota, Oregon, Pennsylvania, Rhode Island, Virginia, Washington, and Wisconsin—have approved state innovation waivers. (However, New York requested, and was approved, to terminate its approved waiver effective July 1, 2026). The most common feature of approved state innovation waivers are reinsurance programs, as 18 of the 21 approved waivers include a variant of a statewide individual market reinsurance program. These reinsurance programs typically offset a portion of the insurer’s high-cost claims for certain individual market enrollees, reducing the insurer’s overall risk and contributing to lower premiums in the individual market. Idaho, Massachusetts, Ohio, and Vermont have submitted applications and received notification that their applications were incomplete. In October 2025, Idaho indicated that it is seeking to amend its approved waiver to incorporate a plan similar to the one discussed in its incomplete application. It does not appear that Massachusetts, Ohio, or Vermont has modified their incomplete applications in response to the notification (as of the date of this report). Three states—California, Iowa, and Oklahoma—submitted waiver applications and have since withdrawn their applications.