In order to implement new insurance reforms contained in the ACA to effectively regulate their commercial markets, states will need state statutory authority to implement new policies and authorities.

*Milestone details:

*Full name: Enact legislation necessary to bring the state into compliance with federal law.

*Relevance to the ACA:

The ACA contains a number of insurance market reforms that states will need to adopt laws to enforce. However, if states cannot or choose not to enforce the new requirements, the regulatory authority will fall to the federal government. Sections relevant to commercial insurance regulation include:

§1001 - Enacts individual and group market reforms effective for plan years after September 2010. These reforms include:

-- Prohibits lifetime or annual limits and rescissions.

-- Provides guaranteed issue for children and extension of coverage for certain dependents.

-- Requires coverage of preventive services and emergency services, access to pediatric care and to OB/GYN care, and choice of provider.

-- Provides reporting requirements for plans, standardized definitions of insurance-related terms and explanation of coverage, and standardized medical loss ratio.

§1003 - Creates a premium rate review process beginning in plan year 2010 and requires plans to justify an unreasonable rate increase to the state and the Secretary of HHS.

§1201 - Applies additional consumer protections to large and small group markets and the individual market beginning 2014 that include:

-- Prohibits rating by health status and exclusions of pre-existing conditions.

-- Establishes maximum premium rating bands and limits rating factors to age, tobacco use, area, and individual or family status.

-- Prohibits excessive waiting periods.

-- Guarantees coverage availability and renewability.

-- Establishes minimum benefit standards.

§ 1251 - Creates grandfathered plans, which will be subject to only a select number of insurance reforms. Final regulations issued (75 FR 34540) limit the changes plans can make to benefits, premiums and cost-sharing and still retain grandfathered status.

§1321 - Amends the Public Health Service act as codified in 42 USC §300gg-22 which outlines state enforcement authority regarding group health plans, to include regulation of the individual market, allowing the federal government to preempt state law and enforce the consumer protections if states do not.