CMS has approved Hawaii’s application for a Section 1332 State Innovation Waiver, which allows a state to waive provisions of the Affordable Care Act (ACA) if it can provide comparable access and affordability through alternative reforms, while not adding to the federal deficit.
Hawaii is the first state to receive approval for a Section 1332 waiver.
Hawaii’s application was approved on Dec. 30, 2016. Under the waiver, Hawaii will be allowed to cease operation of its Small Business Health Options Program (SHOP) for five years, effective Jan. 1, 2017. The state instead will operate a business insurance program that has been in place since 1974 that requires employers to offer insurance to employees. Hawaii will receive quarterly federal payments to operate the program that are equal to the amount of tax credits that employers would have received through the SHOP.
As of Jan. 3, nine other states have passed laws enabling state officials to analyze or submit an application for a Section 1332 waiver.