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Centers for Medicare & Medicaid Services

Self-Funded Non-Federal Governmental Plans

The Affordable Care Act has given Americans new rights and benefits, by helping more children get health coverage, ending lifetime and most annual limits on care, allowing young adults under 26 to stay on their parent’s health insurance, and giving patients access to recommended preventive services without cost.

Prior to enactment of the Affordable Care Act, sponsors of self-funded, non-federal governmental plans were permitted to elect to exempt those plans from, or “opt out of,” certain provisions of the Public Health Service (PHS) Act. This election was authorized under section 2721(b)(2) of the PHS Act.

The Affordable Care Act made a number of changes, with the result that sponsors of self-funded, non-federal governmental plans can no longer opt out of as many requirements of Title XXVII.

This section is intended to provide information about this opt out provision.  The information in this section will be of interest to state and local governmental employers that provide self-funded group health plan coverage to their employees, administrators of those group health plans, and employees and dependents who are enrolled, or may enroll, in those plans.

 Although self-funded nonfederal governmental plans may still opt out of certain provisions of the PHS Act, they are not exempt from other requirements of the law including the restrictions on annual limits and other provisions of the Patient’s Bill of Rights.

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