↓ Skip to main content
Syam Adusumilli
Regulatory and Legal Structure · LFP-03.TD1

State Regulatory Map: How Each State Treats Level Funded Plans

By Syam Adusumilli · 7 min read
In a Hurry? Read the executive summary.

This reference document provides state-by-state regulatory treatment of level funded plans and stop loss insurance. The table is organized alphabetically by state. Each entry identifies the regulatory framework, minimum attachment point requirements where applicable, and pending legislative activity. The document supports 03.02 (State Regulation of Level Funded) and 07.02 (State-Level Market Dynamics) by providing granular state detail for reference.

How to Use This Document
#

Treatment categories reflect how each state approaches level funded plans and the stop loss insurance that makes them viable.

Category 1 (ERISA-Preempted) indicates states that accept federal ERISA preemption without significant additional state-level regulation of level funded plans. Stop loss is regulated as insurance, but without restrictive attachment point minimums or provisions specifically targeting level funded arrangements.

Category 2 (Stop Loss Constraints) indicates states that regulate stop loss insurance in ways that affect level funded viability. Minimum attachment point requirements, minimum group size requirements, or other stop loss regulations constrain the level funded products that can be offered in the state.

Category 3 (Specific Framework) indicates states that have enacted regulatory frameworks specifically addressing level funded plans, creating a distinct category between fully insured and pure self-funded treatment.

Category 4 (Fully Insured Treatment) would indicate states that classify certain level funded arrangements as fully insured, requiring compliance with community rating, essential health benefits, state mandated benefits, and premium taxes. No state currently applies this treatment categorically, though several have considered legislation that would move in this direction.

Minimum specific attachment point reflects the state-imposed floor for specific stop loss coverage. “None” indicates no state minimum; federal standards and carrier underwriting guidelines apply. Dollar figures reflect the state regulatory minimum below which stop loss cannot be sold.

Pending legislation flag indicates whether legislation that would change the state’s treatment of level funded or stop loss was introduced or pending as of the publication date. This flag signals regulatory instability rather than predicting outcomes.

State Regulatory Map
#

StateTreatmentMin. Specific AttachmentMin. Group SizeKey CitationPending Legislation
Alabama1 - ERISA-PreemptedNoneNoneAla. Code § 27-1-1 et seq.No
Alaska1 - ERISA-PreemptedNoneNoneAlaska Stat. § 21.03 et seq.No
Arizona1 - ERISA-PreemptedNoneNoneAriz. Rev. Stat. § 20-101 et seq.No
Arkansas1 - ERISA-PreemptedNoneNoneArk. Code § 23-60-101 et seq.No
California2 - Stop Loss Constraints$40,000NoneCal. Ins. Code § 10128.5Yes
Colorado2 - Stop Loss ConstraintsNoneNoneColo. Rev. Stat. § 10-16-119No
Connecticut2 - Stop Loss Constraints$20,0002Conn. Gen. Stat. § 38a-553Yes
Delaware1 - ERISA-PreemptedNoneNoneDel. Code tit. 18, § 101 et seq.No
Florida1 - ERISA-PreemptedNoneNoneFla. Stat. § 624.01 et seq.No
Georgia1 - ERISA-PreemptedNoneNoneGa. Code § 33-1-1 et seq.No
Hawaii2 - Stop Loss Constraints$25,000NoneHaw. Rev. Stat. § 431:1-100 et seq.No
Idaho1 - ERISA-PreemptedNoneNoneIdaho Code § 41-101 et seq.No
Illinois2 - Stop Loss Constraints$20,000None215 ILCS 5/1 et seq.No
Indiana1 - ERISA-PreemptedNoneNoneInd. Code § 27-1-1-1 et seq.No
Iowa1 - ERISA-PreemptedNoneNoneIowa Code § 505.1 et seq.No
Kansas2 - Stop Loss Constraints$20,000NoneKan. Stat. § 40-101 et seq.No
Kentucky2 - Stop Loss Constraints$20,000NoneKy. Rev. Stat. § 304.1-010 et seq.No
Louisiana2 - Stop Loss Constraints$20,000NoneLa. Rev. Stat. § 22:1 et seq.No
Maine2 - Stop Loss Constraints$22,500NoneMe. Rev. Stat. tit. 24-A, § 1 et seq.Yes
Maryland2 - Stop Loss Constraints$22,500NoneMd. Code, Ins. § 1-101 et seq.Yes
Massachusetts2 - Stop Loss Constraints$25,000NoneMass. Gen. Laws ch. 175, § 1 et seq.Yes
Michigan2 - Stop Loss Constraints$20,000NoneMich. Comp. Laws § 500.100 et seq.No
Minnesota2 - Stop Loss Constraints$20,0002Minn. Stat. § 60A.01 et seq.Yes
Mississippi1 - ERISA-PreemptedNoneNoneMiss. Code § 83-1-1 et seq.No
Missouri2 - Stop Loss Constraints$20,000NoneMo. Rev. Stat. § 374.010 et seq.No
Montana1 - ERISA-PreemptedNoneNoneMont. Code § 33-1-101 et seq.No
Nebraska1 - ERISA-PreemptedNoneNoneNeb. Rev. Stat. § 44-101 et seq.No
Nevada2 - Stop Loss Constraints$20,000NoneNev. Rev. Stat. § 679A.010 et seq.No
New Hampshire2 - Stop Loss Constraints$20,000NoneN.H. Rev. Stat. § 400-A:1 et seq.No
New Jersey2 - Stop Loss Constraints$35,000NoneN.J. Stat. § 17:1-1 et seq.Yes
New Mexico2 - Stop Loss Constraints$20,000NoneN.M. Stat. § 59A-1-1 et seq.No
New York3 - Specific Framework$10,000NoneN.Y. Ins. Law § 101 et seq.Yes
North Carolina2 - Stop Loss Constraints$20,000NoneN.C. Gen. Stat. § 58-1-1 et seq.No
North Dakota1 - ERISA-PreemptedNoneNoneN.D. Cent. Code § 26.1-01-01 et seq.No
Ohio1 - ERISA-PreemptedNoneNoneOhio Rev. Code § 3901.01 et seq.No
Oklahoma1 - ERISA-PreemptedNoneNoneOkla. Stat. tit. 36, § 101 et seq.No
Oregon2 - Stop Loss Constraints$20,000NoneOr. Rev. Stat. § 731.004 et seq.Yes
Pennsylvania2 - Stop Loss Constraints$22,500None40 Pa. Stat. § 1 et seq.No
Rhode Island2 - Stop Loss Constraints$22,500NoneR.I. Gen. Laws § 27-1-1 et seq.Yes
South Carolina1 - ERISA-PreemptedNoneNoneS.C. Code § 38-1-10 et seq.No
South Dakota1 - ERISA-PreemptedNoneNoneS.D. Codified Laws § 58-1-1 et seq.No
Tennessee1 - ERISA-PreemptedNoneNoneTenn. Code § 56-1-101 et seq.No
Texas1 - ERISA-PreemptedNoneNoneTex. Ins. Code § 1.001 et seq.No
Utah1 - ERISA-PreemptedNoneNoneUtah Code § 31A-1-101 et seq.No
Vermont2 - Stop Loss Constraints$20,0002Vt. Stat. tit. 8, § 1 et seq.Yes
Virginia2 - Stop Loss Constraints$20,000NoneVa. Code § 38.2-100 et seq.No
Washington2 - Stop Loss Constraints$40,000NoneWash. Rev. Code § 48.01.010 et seq.Yes
West Virginia2 - Stop Loss Constraints$20,000NoneW. Va. Code § 33-1-1 et seq.No
Wisconsin2 - Stop Loss Constraints$20,000NoneWis. Stat. § 600.01 et seq.No
Wyoming1 - ERISA-PreemptedNoneNoneWyo. Stat. § 26-1-101 et seq.No
District of Columbia2 - Stop Loss Constraints$20,000NoneD.C. Code § 31-101 et seq.No

Key Observations
#

Eighteen states and Colorado operate under Category 1 or Category 2 treatment with no or modest stop loss constraints, allowing flexibility for level funded product design. Colorado regulates stop loss through data collection and filing requirements under C.R.S. 10-16-119 but has not classified level funded as fully insured; level funded products continue to be sold in the state.

Twenty-eight states and the District of Columbia impose minimum specific attachment point requirements, with most following the NAIC Model Act standard of $20,000. California and Washington impose the highest minimums at $40,000, which significantly constrains level funded viability for very small groups in those states.

No state currently operates under full Category 4 treatment that categorically classifies all level funded as fully insured. New York operates under a specific framework (Category 3) with distinct regulatory requirements for level funded products.

Thirteen states have pending legislation that could change their treatment of level funded or stop loss insurance. This legislative activity concentrates in states with larger insurance markets and more active regulatory environments.

Update Frequency
#

This document reflects regulatory status as of March 2026. State regulatory treatment changes through legislation, regulatory guidance, and enforcement interpretation. Users should verify current requirements with state insurance departments before relying on this reference for compliance decisions.

How this article connects to others in Blue Gray Matters.

LFP-02.03 Stop Loss Underwriting technical
State minimum specific attachment point requirements documented in this map set the regulatory floor for the attachment point options stop loss carriers can quote in each state, constraining the underwriting range LFP-02.03 examines and making some of the lower attachment point options that article analyzes unavailable in states with elevated minimums.
LFP-04.02 Below The Viable Threshold technical
State minimum group size requirements for stop loss issuance documented in this map operate as a regulatory floor that may bind before the actuarial viability threshold LFP-04.02 identifies, determining for each state the smallest employer that can legally obtain stop loss coverage regardless of their actuarial risk profile.
LFP-07.02 The States Where Level Funded Thrives And The States That Regulate It Out technical
This reference document provides the state-level regulatory detail LFP-07.02 draws on when analyzing where level funded thrives and where state regulation determines market viability, with the Category 1 through Category 4 framework serving as the shared taxonomy for the geographic market analysis that article conducts.
LFP-15.11 Go To Market Sequencing technical
The state regulatory categories mapped here provide the geographic market assessment framework a TPA uses when sequencing which states to enter first; LFP-15.11 examines go-to-market sequencing for the TPA product, and this document's identification of permissive versus restrictive states is the regulatory input to that prioritization.

Sources cited in this article.

  1. National Association of Insurance Commissioners. Stop Loss Insurance Model Act. Model 92, 1995, revised 1999.
  2. National Conference of State Legislatures. "Health Insurance Legislation Database." NCSL, 2025.
  3. Self-Insurance Institute of America. "State Regulatory Affairs Tracker." SIIA, 2025.
  4. State insurance department websites. Stop loss and level funded regulatory guidance. Accessed March 2026.