Quick answer
Federal law, mainly the Affordable Care Act, sets the minimum rules for health insurance nationwide. States regulate the insurance sold within their borders on top of that floor. Your state can require extra benefits, cap costs like insulin copays, run its own marketplace, add its own subsidies or coverage mandate, expand Medicaid, and limit or ban short-term plans. These state rules apply to insurance bought from an insurer, not to self-funded employer plans.
Key takeaways
- The ACA sets the floor: essential benefits, no pre-existing condition exclusions and limits on out-of-pocket costs.
- 21 states plus DC run their own marketplaces for 2027; the rest use HealthCare.gov.
- 29 states and DC cap insulin copays in state-regulated plans.
- California, Massachusetts, New Jersey, Rhode Island and DC have their own coverage mandates with tax penalties.
- Self-funded employer plans follow federal rules, not state mandates.
On this page
What federal law sets for everyone
Under the ACA, individual and small-group plans must cover 10 essential health benefits, can’t turn people down or charge more for pre-existing conditions, can’t have lifetime or yearly dollar limits on essential benefits, and must cap yearly out-of-pocket costs ($10,600 for one person in 2026). Federal law also sets Medicare rules and the basic framework for Medicaid; see government health insurance.
What states can do
| State rule | What it means for you |
|---|---|
| Benefit mandates | Required coverage beyond federal law, such as infertility treatment, autism therapy or hearing aids for children, varies by state |
| Cost caps | 29 states and DC cap insulin copays; some cap costs for other drugs or services |
| Own marketplace | 21 states and DC run their own enrollment sites for 2027, often with longer open enrollment |
| Extra subsidies | Some states add their own help on top of federal premium tax credits |
| Individual mandate | CA, MA, NJ, RI and DC charge a tax penalty for going without coverage |
| Medicaid expansion | 41 states including DC cover adults up to 138% of the poverty level |
| Short-term plans | Some states limit or ban them |
| Surprise billing | Many states add protections, including some for ground ambulance bills |
| Rating rules | NY and VT don’t allow premiums to vary by age; some states limit tobacco surcharges |
Who state rules don’t cover
Many large employers self-fund their health plans. Those plans are governed by federal law (ERISA) and don’t have to follow state benefit mandates or cost caps. See is self-funded health insurance right for you. Medicare also follows federal rules, though states regulate Medigap policies.
Examples of how state rules affect coverage
- Weight-loss care. Coverage for obesity treatment, such as bariatric surgery, depends partly on your state’s required benefits and your plan. See will health insurance pay for weight-loss programs.
- Families and individuals. Your state’s marketplace, subsidies and Medicaid rules shape what’s available to individuals and families.
- Small businesses. States regulate small-group plans, including the definition of a small employer. See small business health insurance.
How to find your state’s rules
- Your state insurance department explains state mandates and handles complaints.
- Your state’s marketplace or HealthCare.gov lists the plans and help available where you live.
- Your plan’s Summary of Benefits and Coverage lists what your specific plan covers.
Insurers also differ by state; see the best health insurance companies.
See the plans sold in your state: compare quotes by ZIP code.
Frequently asked questions
Do health insurance rules differ by state?
Yes. Federal law sets the minimum, and states add their own rules for the plans they regulate.
Does my state’s law apply to my job-based plan?
Only if your employer buys insurance from an insurer. If your employer self-funds the plan, federal law applies instead.
Which states have their own health insurance mandate?
California, Massachusetts, New Jersey, Rhode Island and the District of Columbia.
Sources
This article is general information, not legal or insurance advice. State laws change often, so check with your state insurance department. Last reviewed September 2026.