Extent of Federal Preemption with Respect to State Regulation of

30.2 - Extent of Federal Preemption with Respect to State Regulation of MA Plans (Rev. 101, Issued: 08-19-11, Effective: 08-19-11, Implementation: 08-19-11) All State standards, including those established through case law, are preempted to the extent that they would specifically regulate health plans (including MA plans), with the exceptions of State licensing and solvency laws. Other State health and safety standards, or generally applicable standards, that are not specific to health plans are not preempted. CMS defers to the States on whether an entity meets the requirements to become State licensed or whether an entity has adequate financial solvency to be risk bearing. However, State licensure requirements cannot impose any condition that CMS does not determine to be a licensure requirement. For example, a State licensure requirement that governs whether an organization is fit to serve as a health insurer is acceptable, but a requirement that governs how an entity operates its insurance upon receipt of a health insurance license is improper. In general, a valid State licensure requirement is one that determines whether an entity is capable of offering health insurance in the State at the time of application. We differentiate between requirements that govern the fitness of an organization to serve as a health insurer or risk bearing entity and the requirements that govern the ongoing operation of how, where, and to whom it provides benefits. We have not in the regulations or this chapter set forth specific parameters of what would be considered, as there may be legitimate aspects of State licensure that we have not encountered and could not necessarily anticipate. We recognize that there still may be questions about the extent of allowable State regulations. We address these specific preemption questions in cooperation with States on a case-by-case basis.