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CMS Exempts U.S. Territories From ACA Market Reforms

An exemption issued by the Centers for Medicare & Medicaid Services will allow U.S. territories to stop adhering to market-reform rules in the Affordable Care Act.
August 7, 2014

An exemption issued by the Centers for Medicare & Medicaid Services (CMS) will allow U.S. territories to stop adhering to market-reform rules in the Affordable Care Act (ACA). In a series of letters mailed July 16 to top officials in all federal territories, CMS Administrator Marilyn Tavenner said individual and group health insurers will not have to meet ACA requirements related to community rating, single risk pools, rate review, medical loss ratios and minimum essential health benefit mandates.

Tavenner said CMS determined that federal territories do not meet the definition of “state” in the Public Health Service Act in the wake of the ACA. She also said the interpretation applies retroactively, so territories will not have to pay back any grants to the federal government that were issued to the territories prior to her July 16 letter, although unspent grant funding must be returned to CMS.