---
kind: "section"
citation: "42 U.S.C. § 300gg–44"
title: "42"
title_heading: "The Public Health and Welfare"
number: "300gg–44"
heading: "State flexibility in individual market reforms"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/300gg-44"
units:
  - "Chapter 6A — Public Health Service"
  - "Subchapter XXV — Requirements Relating to Health Insurance Coverage"
  - "Part B — Individual Market Rules"
  - "Subpart 1 — portability, access, and renewability requirements"
---

# §300gg–44. State flexibility in individual market reforms

- (a) **Waiver of requirements where implementation of acceptable alternative mechanism—**
  - (1) **In general—** The requirements of [section 300gg–41 of this title](/usc/42/300gg–41.md) shall not apply with respect to [health insurance coverage](/usc/42/300gg–91.md?p=b-1) offered in the [individual market](/usc/42/300gg–91.md?p=e-1-A) in the [State](/usc/42/201.md?p=f) so long as a [State](/usc/42/201.md?p=f) is found to be implementing, in accordance with this section and consistent with [section 300gg–62(b) of this title](/usc/42/300gg–62.md?p=b), an alternative mechanism (in this section referred to as an “acceptable alternative mechanism”)—
    - (A) under which all eligible individuals are provided a choice of [health insurance coverage](/usc/42/300gg–91.md?p=b-1);
    - (B) under which such coverage does not impose any preexisting condition exclusion with respect to such coverage;
    - (C) under which such choice of coverage includes at least one policy form of coverage that is comparable to comprehensive [health insurance coverage](/usc/42/300gg–91.md?p=b-1) offered in the [individual market](/usc/42/300gg–91.md?p=e-1-A) in such [State](/usc/42/201.md?p=f) or that is comparable to a standard option of coverage available under the group or individual health insurance laws of such [State](/usc/42/201.md?p=f); and
    - (D) in a [State](/usc/42/201.md?p=f) which is implementing—
      - (i) a model act described in [subsection (c)(1)](#c-1),
      - (ii) a qualified high risk pool described in [subsection (c)(2)](#c-2), or
      - (iii) a mechanism described in [subsection (c)(3)](#c-3).
  - (2) **Permissible forms of mechanisms—** A private or public individual health insurance mechanism (such as a [health insurance coverage](/usc/42/300gg–91.md?p=b-1) pool or [programs](/usc/42/274l–1.md?p=4), mandatory group conversion policies, guaranteed issue of one or more plans of [individual health insurance coverage](/usc/42/300gg–91.md?p=b-5), or open enrollment by one or more [health insurance issuers](/usc/42/300gg–91.md?p=b-2)), or combination of such mechanisms, that is designed to provide access to health benefits for individuals in the [individual market](/usc/42/300gg–91.md?p=e-1-A) in the [State](/usc/42/201.md?p=f) in accordance with this section may constitute an acceptable alternative mechanism.
- (b) **Application of acceptable alternative mechanisms—**
  - (1) **Presumption—**
    - (A) **In general—** Subject to the succeeding provisions of this subsection, a [State](/usc/42/201.md?p=f) is presumed to be implementing an acceptable alternative mechanism in accordance with this section as of July 1, 1997, if, by not later than April 1, 1997, the chief executive officer of a [State](/usc/42/201.md?p=f)—
      - (i) notifies the [Secretary](/usc/42/201.md?p=c) that the [State](/usc/42/201.md?p=f) has enacted or intends to enact (by not later than January 1, 1998, or July 1, 1998, in the case of a [State](/usc/42/201.md?p=f) described in [subparagraph (B)(ii)](#b-1-B-ii)) any necessary legislation to provide for the implementation of a mechanism reasonably designed to be an acceptable alternative mechanism as of January 1, 1998,[^1] (or, in the case of a [State](/usc/42/201.md?p=f) described in [subparagraph (B)(ii)](#b-1-B-ii), July 1, 1998); and
      - (ii) provides the [Secretary](/usc/42/201.md?p=c) with such information as the [Secretary](/usc/42/201.md?p=c) may require to review the mechanism and its implementation (or proposed implementation) under this subsection.
    - (B) **Delay permitted for certain States—**
      - (i) **Effect of delay—** In the case of a [State](/usc/42/201.md?p=f) described in [clause (ii)](#b-1-B-ii) that provides notice under [subparagraph (A)(i)](#b-1-A-i), for the presumption to continue on and after July 1, 1998, the chief executive officer of the [State](/usc/42/201.md?p=f) by April 1, 1998—
        - (I) must notify the [Secretary](/usc/42/201.md?p=c) that the [State](/usc/42/201.md?p=f) has enacted any necessary legislation to provide for the implementation of a mechanism reasonably designed to be an acceptable alternative mechanism as of July 1, 1998; and
        - (II) must provide the [Secretary](/usc/42/201.md?p=c) with such information as the [Secretary](/usc/42/201.md?p=c) may require to review the mechanism and its implementation (or proposed implementation) under this subsection.
      - (ii) **States described—** A [State](/usc/42/201.md?p=f) described in this clause is a [State](/usc/42/201.md?p=f) that has a legislature that does not meet within the 12-month period beginning on August 21, 1996.
    - (C) **Continued application—** In order for a mechanism to continue to be presumed to be an acceptable alternative mechanism, the [State](/usc/42/201.md?p=f) shall provide the [Secretary](/usc/42/201.md?p=c) every 3 years with information described in subparagraph [(A)(ii)](#b-1-A-ii) or [(B)(i)(II)](#b-1-B-i-II) (as the case may be).
  - (2) **Notice—** If the [Secretary](/usc/42/201.md?p=c) finds, after review of information provided under [paragraph (1)](#b-1) and in consultation with the chief executive officer of the [State](/usc/42/201.md?p=f) and the insurance commissioner or chief insurance regulatory official of the [State](/usc/42/201.md?p=f), that such a mechanism is not an acceptable alternative mechanism or is not (or no longer) being implemented, the [Secretary](/usc/42/201.md?p=c)—
    - (A) shall notify the [State](/usc/42/201.md?p=f) of—
      - (i) such preliminary determination, and
      - (ii) the consequences under [paragraph (3)](#b-3) of a failure to implement such a mechanism; and
    - (B) shall permit the [State](/usc/42/201.md?p=f) a reasonable opportunity in which to modify the mechanism (or to adopt another mechanism) in a manner so that may be an acceptable alternative mechanism or to provide for implementation of such a mechanism.
  - (3) **Final determination—** If, after providing notice and opportunity under [paragraph (2)](#b-2), the [Secretary](/usc/42/201.md?p=c) finds that the mechanism is not an acceptable alternative mechanism or the [State](/usc/42/201.md?p=f) is not implementing such a mechanism, the [Secretary](/usc/42/201.md?p=c) shall notify the [State](/usc/42/201.md?p=f) that the [State](/usc/42/201.md?p=f) is no longer considered to be implementing an acceptable alternative mechanism and that the requirements of [section 300gg–41 of this title](/usc/42/300gg–41.md) shall apply to [health insurance coverage](/usc/42/300gg–91.md?p=b-1) offered in the [individual market](/usc/42/300gg–91.md?p=e-1-A) in the [State](/usc/42/201.md?p=f), effective as of a date specified in the notice.
  - (4) **Limitation on secretarial authority—** The [Secretary](/usc/42/201.md?p=c) shall not make a determination under paragraph [(2)](#b-2) or [(3)](#b-3) on any basis other than the basis that a mechanism is not an acceptable alternative mechanism or is not being implemented.
  - (5) **Future adoption of mechanisms—** If a [State](/usc/42/201.md?p=f), after January 1, 1997, submits the notice and information described in [paragraph (1)](#b-1), unless the [Secretary](/usc/42/201.md?p=c) makes a finding described in [paragraph (3)](#b-3) within the 90-day period beginning on the date of submission of the notice and information, the mechanism shall be considered to be an acceptable alternative mechanism for purposes of this section, effective 90 days after the end of such period, subject to the second sentence of [paragraph (1)](#b-1).
- (c) **Provision related to risk—**
  - (1) **Adoption of NAIC models—** The model act referred to in [subsection (a)(1)(D)(i)](#a-1-D-i) is the [Small Employer](/usc/42/300gg–91.md?p=e-4) and Individual Health Insurance Availability Model Act (adopted by the National Association of Insurance Commissioners on June 3, 1996) insofar as it applies to [individual health insurance coverage](/usc/42/300gg–91.md?p=b-5) or the Individual Health Insurance Portability Model Act (also adopted by such Association on such date).
  - (2) **Qualified high risk pool—** For purposes of [subsection (a)(1)(D)(ii)](#a-1-D-ii), a “qualified high risk pool” described in this paragraph is a high risk pool that—
    - (A) provides to all eligible individuals [health insurance coverage](/usc/42/300gg–91.md?p=b-1) (or comparable coverage) that does not impose any preexisting condition exclusion with respect to such coverage for all eligible individuals, and
    - (B) provides for premium rates and covered benefits for such coverage consistent with standards included in the NAIC Model Health Plan for Uninsurable Individuals Act (as in effect as of August 21, 1996).
  - (3) **Other mechanisms—** For purposes of [subsection (a)(1)(D)(iii)](#a-1-D-iii), a mechanism described in this paragraph—
    - (A) provides for risk adjustment, risk spreading, or a risk spreading mechanism (among issuers or policies of an issuer) or otherwise provides for some financial subsidization for eligible individuals, including through assistance to participating issuers; or
    - (B) is a mechanism under which each eligible individual is provided a choice of all [individual health insurance coverage](/usc/42/300gg–91.md?p=b-5) otherwise available.

## Footnotes

[^1]: So in original. The comma probably should not appear.

## Source credit

(July 1, 1944, ch. 373, title XXVII, § 2744, as added Pub. L. 104–191, title I, § 111(a), Aug. 21, 1996, 110 Stat. 1984; amended Pub. L. 104–204, title VI, § 605(b)(1), Sept. 26, 1996, 110 Stat. 2942.)

## Notes

### Editorial Notes

### Codification

August 21, 1996, referred to in subsec. (b)(1)(B)(ii), was in the original “the date of enactment of this Act”, which was translated as meaning the date of enactment of Pub. L. 104–191, which enacted this subchapter, to reflect the probable intent of Congress.

### Amendments

1996—Subsec. (a)(1). Pub. L. 104–204 made technical amendment to reference in original act which appears in text as reference to section 300gg–62(b) of this title.

### Statutory Notes and Related Subsidiaries

### Effective Date of 1996 Amendment

Pub. L. 104–204, title VI, § 605(c), Sept. 26, 1996, 110 Stat. 2942, provided that: “The amendments made by this section [enacting section 300gg–51 of this title and amending this section and sections 300gg–61 and 300gg–62 of this title] shall apply with respect to health insurance coverage offered, sold, issued, renewed, in effect, or operated in the individual market on or after January 1, 1998.”

### Effective Date

Section applicable with respect to health insurance coverage offered, sold, issued, renewed, in effect, or operated in the individual market after June 30, 1997, regardless of when a period of creditable coverage occurs, see section 111(b) of Pub. L. 104–191, set out as a note under section 300gg–41 of this title.