Executive Summary: State Regulatory Map: How Each State Treats Level Funded Plans

LFP-03.TD1 — The Regulatory Landscape

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This reference document maps regulatory treatment of level funded plans and stop loss insurance across all 50 states and the District of Columbia. Entries are organized alphabetically and classified into three active categories: ERISA-preempted states with minimal additional regulation (Category 1), states that regulate stop loss in ways that indirectly constrain level funded viability through minimum attachment point or group size requirements (Category 2), and states with specific regulatory frameworks creating a category between fully insured and pure self-funded treatment (Category 3). No state currently applies Category 4 treatment that classifies all level funded as fully insured.

Twenty-eight states and the District of Columbia impose minimum specific attachment point requirements, most following the NAIC Model Act standard of $20,000. California and Washington impose $40,000 minimums. Thirteen states have pending legislation that could change their treatment. New York operates under a specific framework with a $10,000 minimum. The map includes key statutory citations for each state and a pending legislation flag indicating regulatory instability.

The document supports LFP-03.02 and LFP-07.02. Verify current requirements with state insurance departments before relying on this reference for compliance decisions; state regulatory treatment changes through legislation, guidance, and enforcement interpretation.