---
kind: "section"
citation: "42 U.S.C. § 18041"
title: "42"
title_heading: "The Public Health and Welfare"
number: "18041"
heading: "State flexibility in operation and enforcement of Exchanges and related requirements"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/18041"
units:
  - "Chapter 157 — Quality, Affordable Health Care for All Americans"
  - "Subchapter III — Available Coverage Choices for All Americans"
  - "Part C — State Flexibility Relating To Exchanges"
---

# §18041. State flexibility in operation and enforcement of Exchanges and related requirements

- (a) **Establishment of standards—**
  - (1) **In general—** The [Secretary](/usc/42/18024.md?p=c) shall, as soon as practicable after March 23, 2010, issue regulations setting standards for meeting the requirements under this title,[^1] and the amendments made by this title,[^1] with respect to—
    - (A) the establishment and operation of Exchanges (including SHOP Exchanges);
    - (B) the offering of [qualified health plans](/usc/42/18021.md?p=a-1) through such Exchanges;
    - (C) the establishment of the reinsurance and risk adjustment programs under part E; and
    - (D) such other requirements as the [Secretary](/usc/42/18024.md?p=c) determines appropriate.

    The preceding sentence shall not apply to standards for requirements under subtitles A and C (and the amendments made by such subtitles) for which the [Secretary](/usc/42/18024.md?p=c) issues regulations under the Public Health Service Act [[42 U.S.C. 201](/usc/42/201.md) et seq.].

  - (2) **Consultation—** In issuing the regulations under [paragraph (1)](#a-1), the [Secretary](/usc/42/18024.md?p=c) shall consult with the National Association of Insurance Commissioners and its members and with [health insurance issuers](/usc/42/18021.md?p=b-2), consumer organizations, and such other individuals as the [Secretary](/usc/42/18024.md?p=c) selects in a manner designed to ensure balanced representation among interested parties.
- (b) **State action—** Each [State](/usc/42/18024.md?p=d) that elects, at such time and in such manner as the [Secretary](/usc/42/18024.md?p=c) may prescribe, to apply the requirements described in [subsection (a)](#a) shall, not later than January 1, 2014, adopt and have in effect—
  - (1) the Federal standards established under [subsection (a)](#a); or
  - (2) a [State](/usc/42/18024.md?p=d) law or regulation that the [Secretary](/usc/42/18024.md?p=c) determines implements the standards within the [State](/usc/42/18024.md?p=d).
- (c) **Failure to establish Exchange or implement requirements—**
  - (1) **In general—** If—
    - (A) a [State](/usc/42/18024.md?p=d) is not an electing [State](/usc/42/18024.md?p=d) under [subsection (b)](#b); or
    - (B) the [Secretary](/usc/42/18024.md?p=c) determines, on or before January 1, 2013, that an electing [State](/usc/42/18024.md?p=d)—
      - (i) will not have any required Exchange operational by January 1, 2014; or
      - (ii) has not taken the actions the [Secretary](/usc/42/18024.md?p=c) determines necessary to implement—
        - (I) the other requirements set forth in the standards under [subsection (a)](#a); or
        - (II) the requirements set forth in subtitles A and C and the amendments made by such subtitles;

    the [Secretary](/usc/42/18024.md?p=c) shall (directly or through agreement with a not-for-profit entity) establish and operate such Exchange within the [State](/usc/42/18024.md?p=d) and the [Secretary](/usc/42/18024.md?p=c) shall take such actions as are necessary to implement such other requirements.

  - (2) **Enforcement authority—** The provisions of section 2736(b)[^1] of the Public Health Services[^2] Act [[42 U.S.C. 300gg–22(b)](/usc/42/300gg–22.md?p=b)] shall apply to the enforcement under [paragraph (1)](#c-1) of requirements of [subsection (a)(1)](#a-1) (without regard to any limitation on the application of those provisions to [group health plans](/usc/42/18021.md?p=b-3)).
- (d) **No interference with State regulatory authority—** Nothing in this title[^1] shall be construed to preempt any [State](/usc/42/18024.md?p=d) law that does not prevent the application of the provisions of this title.[^1]
- (e) **Presumption for certain State-operated Exchanges—**
  - (1) **In general—** In the case of a [State](/usc/42/18024.md?p=d) operating an Exchange before January 1, 2010, and which has insured a percentage of its population not less than the percentage of the population projected to be covered nationally after the implementation of this Act, that seeks to operate an Exchange under this section, the [Secretary](/usc/42/18024.md?p=c) shall presume that such Exchange meets the standards under this section unless the [Secretary](/usc/42/18024.md?p=c) determines, after completion of the process established under [paragraph (2)](#e-2), that the Exchange does not comply with such standards.
  - (2) **Process—** The [Secretary](/usc/42/18024.md?p=c) shall establish a process to work with a [State](/usc/42/18024.md?p=d) described in [paragraph (1)](#e-1) to provide assistance necessary to assist the [State](/usc/42/18024.md?p=d)’s Exchange in coming into compliance with the standards for approval under this section.

## Footnotes

[^1]: See References in Text note below.
[^2]: So in original. Probably should be “Service”.

## Source credit

(Pub. L. 111–148, title I, § 1321, Mar. 23, 2010, 124 Stat. 186.)

## Notes

### Editorial Notes

### References in Text

This title, referred to in subsecs. (a)(1) and (d), is title I of Pub. L. 111–148, Mar. 23, 2010, 124 Stat. 130, which enacted this chapter and enacted, amended, and transferred numerous other sections and notes in the Code. For complete classification of title I to the Code, see Tables.

Subtitles A and C, referred to in subsecs. (a)(1) and (c)(1)(B)(ii)(II), are subtitles A (§§ 1001–1004) and C (§§ 1201–1255), respectively, of title I of Pub. L. 111–148, Mar. 23, 2010, 124 Stat. 130, 154. Subtitle A enacted sections 300gg–11 to 300gg–19, 300gg–93, and 300gg–94 of this title, transferred sections 300gg–4 to 300gg–7 and 300gg–13 of this title to sections 300gg–25 to 300gg–28 and 300gg–9 of this title, respectively, amended sections 300gg–11, 300gg–12, and 300gg–21 to 300gg–23 of this title, and enacted provisions set out as a note under section 300gg–11 of this title. Subtitle C enacted subchapter II of this chapter and sections 300gg to 300gg–2 and 300gg–4 to 300gg–7 of this title, transferred section 300gg of this title to section 300gg–3 of this title, amended sections 300gg–1 and 300gg–4 of this title, and enacted provisions set out as a note under section 300gg of this title. For complete classification of subtitles A and C to the Code, see Tables.

The Public Health Service Act, referred to in subsec. (a)(1), is act July 1, 1944, ch. 373, 58 Stat. 682, which is classified generally to chapter 6A (§ 201 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 201 of this title and Tables.

Section 2736 of the Public Health Service Act, referred to in subsec. (c)(2), was renumbered section 2723 of that Act by Pub. L. 111–148, § 1563(c)(13)(C) (formerly § 1562(c)(13)(C)), Mar. 23, 2010, 124 Stat. 269, and is classified to section 300gg–22 of this title.

This Act, referred to in subsec. (e)(1), is Pub. L. 111–148, Mar. 23, 2010, 124 Stat. 119, known as the Patient Protection and Affordable Care Act. For complete classification of this Act to the Code, see Short Title note set out under section 18001 of this title and Tables.