General Provisions

V.S.A. tit. 8, ch. 107, subch. 1

in effect

8 V.S.A. § 4011 Definitions

4011. Definitions As used in this chapter: (1) “Covered individual” means an individual who is covered by a health insurance plan, whether as the primary subscriber or policyholder or as a dependent, employee, or employee’s dependent under the plan. (2) “Health care services” means services for the diagnosis, prevention, treatment, cure, or relief of a health condition, illness, injury, or disease. (3) “Health insurance plan” means a policy or contract issued by a health insurer, including the health benefit plan or plans offered by the State of Vermont to its employees and any health benefit plan offered by any agency or instrumentality of the State to its employees. Unless otherwise specified, “health insurance” does not include Vermont Medicaid. (4) “Health insurer” means an insurance company that provides health insurance as defined in subdivision 3301(a)(2) of this title, a nonprofit hospital or medical service corporation, a managed care organization, a health maintenance organization, and, to the extent permitted under federal law, any administrator of an insured, self-insured, or publicly funded health care benefit plan offered by a public or private entity. (5) “Major medical insurance” means a comprehensive health insurance plan that is not specific disease, accident, hospital indemnity, dental care, vision care, disability income, long-term care, Medicare supplement insurance, or other limited-benefit coverage. The term does not include short-term, limited-duration health insurance coverage or a plan under which benefits are paid directly to a covered individual or the individual’s assigns and for which the amount of the benefit is not based on potential medical costs or on actual costs incurred. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4012 Compliance with federal law

4012. Compliance with federal law (a) Except as otherwise provided in this title, health insurers, hospital and medical service corporations, and health maintenance organizations that issue, sell, renew, or offer health insurance plans in Vermont shall comply with the requirements of the Health Insurance Portability and Accountability Act of 1996, as amended from time to time (42 U.S.C. Chapter 6A, Subchapter XXV), and the Patient Protection and Affordable Care Act of 2010, Pub. L. No. 111-148, as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152. The Commissioner shall enforce such requirements pursuant to the Commissioner’s authority under this title. (b)(1) Health insurers, hospital and medical service corporations, health maintenance organizations, and health care providers, as that term is defined in 18 V.S.A. § 9432, shall comply with the requirements of the No Surprises Act, Pub. L. No. 116-260, Division BB, Title I, as amended from time to time. (2) The Commissioner shall enforce the requirements of the No Surprises Act as they apply to health insurers, hospital and medical service corporations, health maintenance organizations, and health care providers, to the extent permitted under federal law, pursuant to the Commissioner’s authority under this title. The Commissioner may also refer cases of noncompliance to the U.S. Department of Health and Human Services under the terms of a collaborative enforcement agreement, or to the Office of the Vermont Attorney General. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4013 Discrimination prohibited

4013. Discrimination prohibited No health insurer shall make or permit any unfair discrimination between individuals of substantially the same hazard in the amount of premium rates charged for any health insurance plan or in the benefits payable under the plan; provided, however, that this section shall not be construed to prohibit different premium rates, different benefits, or different underwriting procedure for individuals insured under group, family expense, or blanket plans of insurance. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4014 Advertising practices

4014. Advertising practices (a) No company doing business in this State, and no insurance agent or broker, shall use in connection with the solicitation of health insurance or pharmacy benefit management any advertising copy or advertising practice or any plan of solicitation that is materially misleading or deceptive. An advertising copy or advertising practice or plan of solicitation shall be considered to be materially misleading or deceptive if by implication or otherwise it transmits information in such manner or of such substance that a prospective applicant for health insurance may be misled by it to the applicant’s material damage. (b)(1) If the Commissioner finds that any such advertising copy or advertising practice or plan of solicitation is materially misleading or deceptive, the Commissioner shall order the company or the agent or broker using such copy or practice or plan to cease and desist from such use. (2) Before making any such finding and order, the Commissioner shall give notice, not less than 10 days in advance, and a hearing to the company, agent, or broker affected. (3) If the Commissioner finds, after due notice and hearing, that any authorized insurer, licensed pharmacy benefit manager, licensed insurance agent, or licensed insurance broker has intentionally violated any such order to cease and desist, the Commissioner may suspend or revoke the license of such insurer, pharmacy benefit manager, agent, or broker. Recodified 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4015 Penalties for violations

4015. Penalties for violations The Commissioner may impose an administrative penalty of up to $750.00 on any person who intentionally violates any provision of this chapter or any order of the Commissioner made in accordance with this chapter. The Commissioner may also suspend or revoke the license of a health insurer or agent for any such intentional violation. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4016 Appeal

4016. Appeal (a) Any person aggrieved by any action of the Commissioner may obtain a review by appeal to the Superior Court of Washington County. The appeal shall be based on the record of the proceedings before the Commissioner and shall not be limited to questions of law. If the appeal is from an order of the Commissioner, the order shall not take effect during the pendency of the appeal unless the court determines otherwise. (b) The court may review all the facts and in disposing of any issue before it may modify, affirm, or reverse any order of the Commissioner in whole or in part. (c) Either party may appeal from the decision of the Superior Court to the Supreme Court in the manner provided by law. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4017 Exemption from attachment and trustee process

4017. Exemption from attachment and trustee process So much of any benefits under all policies of health insurance as does not exceed $200.00 for each month during any period of disability covered by the policy shall not be liable to attachment, trustee process, or other process, or to be seized, taken, appropriated, or applied by any legal or equitable process or by operation of law, either before or after payment of such benefits, to pay any debt or liabilities of the person insured under the policy. However, this exemption shall not apply where an action is brought to recover for necessaries contracted for during the period of disability and the writ or bill of complaint contains a statement to that effect. When a policy provides for a lump sum payment because of a dismemberment or other loss insured, the payment shall be exempt from execution of the covered individual’s creditors. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4018 Third-party ownership

4018. Third-party ownership Nothing in this chapter shall be construed as preventing a person other than the covered individual with proper insurable interest from making application for and owning a policy covering the covered individual or from being entitled under such a policy to any indemnities, benefits, and rights provided in the policy. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4019 Notice as waiver

4019. Notice as waiver A health insurer shall not be deemed to have waived any rights to defend a claim under a health insurance plan based solely on the health insurer’s acknowledgement of receipt of notice under the plan, furnishing or accepting forms for filing proof of loss under the plan, or investigating any claim of loss under the plan. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4020 Age limits

4020. Age limits (a) If a health insurance plan contains a provision establishing, as an age limit or otherwise, a date after which the coverage provided by the plan will not be effective, and if that date falls within a period for which the health insurer has accepted a premium or if the health insurer accepts a premium after that date, the coverage provided by the plan shall continue in force subject to any right of cancellation until the end of the period for which a premium has been accepted. (b) Notwithstanding any provision of subsection (a) of this section to the contrary, if the age of the covered individual has been misstated and if, according to the correct age of the covered individual, the coverage provided by the policy would not have become effective or would have ceased prior to the health insurer’s acceptance of the premium or premiums, then the health insurer’s liability shall be limited to the refund, upon request, of all premiums paid for the period not covered by the plan. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4021 Termination of coverage

4021. Termination of coverage (a)(1) A major medical insurance policy issued by a health insurer that insures employees, members, or subscribers for hospital and medical insurance on an expense-incurred, service, or prepaid basis shall: (A) provide notice to the policyholder or other responsible party of any premium payment due on a policy at least 21 days before the due date; and (B) provide a grace period of at least one month for the payment of each premium falling due after the first premium, during which grace period the plan shall continue in force and the issuer of the plan shall be liable for valid claims for covered losses incurred prior to the end of the grace period. (2) If the issuer of a plan described subdivision (1) of this subsection does not receive payment by the due date, the issuer shall send a termination notice to the policyholder at least 21 days prior to termination notifying the policyholder that the issuer may terminate the plan if payment is not received by the termination date. (3) The termination date of a plan described in subdivision (1) of this subsection shall not be earlier than the day following the last day of the grace period set forth in subdivision (1)(B) of this subsection. (b) For all health insurance policies other than major medical insurance policies, a health insurer shall notify a policyholder of any premium payment due on a policy at least 21 days before the due date. If a health insurer does not receive payment by the due date, the health insurer shall send a termination notice to the policyholder notifying the policyholder that the health insurer will terminate the policy effective on the due date if payment is not received within 14 days from the date of mailing of the termination notice. If a health insurer does not receive payment within 14 days from the date of mailing of the termination notice, the health insurer may cancel coverage effective on the due date. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4022 Rebates and commissions prohibited for nongroup and small group policies and plans offered through the Vermont Health Benefit Exchange

4022. Rebates and commissions prohibited for nongroup and small group policies and plans offered through the Vermont Health Benefit Exchange (a) No health insurer doing business in this State and no insurance agent or broker shall: (1) offer, promise, allow, give, set off, or pay, directly or indirectly: (A) any rebate of or part of the premium payable on a health insurance plan issued pursuant to 33 V.S.A. § 1811 or earnings, profits, dividends, or other benefits founded, arising, accruing, or to accrue on or from the premium; (B) any special advantage in date of policy or age of issue; (C) any paid employment or contract for services of any kind; or (D) any other valuable consideration or inducement to or for insurance on any risk in this State, or for or upon any renewal of any such insurance, that is not specified in the health insurance plan; or (2) offer, promise, give, option, sell, or purchase any stocks, bonds, securities, or property, or any dividends or profits accruing or to accrue on them, or other thing of value as inducement to insurance or in connection with insurance, or any renewal thereof, that is not specified in the health insurance plan. (b) No person insured under a health insurance plan issued pursuant to 33 V.S.A. § 1811 or party or applicant for such plan shall directly or indirectly receive or accept or agree to receive or accept any rebate of premium or of any part of the premium, or any favor or advantage, or share in any benefit to accrue under any health insurance plan issued pursuant to 33 V.S.A. § 1811, or any valuable consideration or inducement, that is not specified in the health insurance plan. (c) Nothing in this section shall be construed as prohibiting any health insurer from: (1) allowing or returning to its participating policyholders dividends, savings, or unused premium deposits; (2) returning or otherwise abating, in full or in part, the premiums of its policyholders out of surplus accumulated from nonparticipating insurance; or (3) taking a bona fide obligation, with interest not exceeding six percent per annum, in payment of any premium. (d)(1) No insurer shall pay any commission, fee, or other compensation, directly or indirectly, to a licensed or unlicensed agent, broker, or other individual in connection with the sale of a health insurance plan issued pursuant to 33 V.S.A. § 1811, nor shall a health insurer include in an insurance rate for a health insurance plan issued pursuant to 33 V.S.A. § 1811 any sums related to services provided by an agent, broker, or other individual. A health insurer may provide to its employees wages, salary, and other employment-related compensation in connection with the sale of health insurance plans but shall not structure any such compensation in a manner that promotes the sale of particular health insurance plans over other plans offered by that insurer. (2) Nothing in this subsection shall be construed to prohibit the Vermont Health Benefit Exchange established in 33 V.S.A. chapter 18, subchapter 1 from structuring compensation for agents or brokers in the form of an additional commission, fee, or other compensation outside insurance rates or from compensating agents, brokers, or other individuals through the procedures and payment mechanisms established pursuant to 33 V.S.A. § 1805(17). Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4022a Rebates prohibited for group insurance policies

4022a. Rebates prohibited for group insurance policies (a) As used in this section, “group insurance” means any policy described in section 4041 of this title, except that it shall not include any small group policy issued pursuant to 33 V.S.A. § 1811. (b) No health insurer doing business in this State and no insurance agent or broker shall: (1) offer, promise, allow, give, set off, or pay, directly or indirectly: (A) any rebate of or part of the premium payable on a group insurance policy, or on any group insurance policy or agent’s commission on the premium or earnings, profits, dividends, or other benefits founded, arising, accruing, or to accrue on or from the premium; (B) any special advantage in date of policy or age of issue; (C) any paid employment or contract for services of any kind; or (D) any other valuable consideration or inducement to or for insurance on any risk in this State, or for or upon any renewal of any such insurance, that is not specified in the health insurance plan; or (2) offer, promise, give, option, sell, or purchase any stocks, bonds, securities, or property, or any dividends or profits accruing or to accrue on them, or other thing of value as inducement to insurance or in connection with insurance, or any renewal thereof, that is not specified in the health insurance plan. (c) No person insured under a group insurance policy or party or applicant for group insurance shall directly or indirectly receive or accept or agree to receive or accept any rebate of premium or of any part of the premium, or all or any part of any agent’s or broker’s commission on the premium, or any favor or advantage, or share in any benefit to accrue under any health insurance plan, or any valuable consideration or inducement, that is not specified in the health insurance plan. (d) Nothing in this section shall be construed as prohibiting: (1) the payment of commission or other compensation to any duly licensed agent or broker; (2) any health insurer from allowing or returning to its participating policyholders dividends, savings, or unused premium deposits; (3) any health insurer from returning or otherwise abating, in full or in part, the premiums of its policyholders out of surplus accumulated from nonparticipating insurance; or (4) the health insurer from taking a bona fide obligation, with interest not exceeding six percent per annum, in payment of any premium. (e) A health insurer that pays a commission, fee, or other compensation, directly or indirectly, to a licensed or unlicensed agent, broker, or other individual other than a bona fide employee of the health insurer in connection with the sale of a group insurance policy shall clearly disclose to the purchaser of the policy the amount of any such commission, fee, or compensation paid or to be paid. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4023 Provisions applying to policies delivered in another state

4023. Provisions applying to policies delivered in another state If any policy is issued by a health insurer domiciled in this State for delivery to a person residing in another state, and if the official having responsibility for the administration of the insurance laws of the other state informs the Commissioner that the policy is not subject to approval or disapproval by the official, the Commissioner may issue an order requiring that the policy meet the standards set forth in sections 4029, 4030, and 4031 of this title. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4024 Coordination of insurance coverage with Medicaid and compliance with Medicaid recovery provisions

4024. Coordination of insurance coverage with Medicaid and compliance with Medicaid recovery provisions (a) No health insurer shall consider the availability of or eligibility for medical assistance in this or any other state under Title XIX of the Social Security Act (Medicaid) when considering eligibility for coverage or making payments under its plan for eligible enrollees, subscribers, policyholders, or certificate holders. (b) A health insurer that issues, sells, renews, or offers health insurance coverage in Vermont or who is required to be licensed or registered with the Department shall comply with the requirements of 33 V.S.A. §§ 1907, 1908, 1909, and 1910. The Commissioner shall enforce such requirements pursuant to the Commissioner’s authority under this title. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4025 Health insurance and the Blueprint for Health

4025. Health insurance and the Blueprint for Health (a) All major medical insurance plans shall be offered, issued, and administered consistent with the Blueprint for Health established in 18 V.S.A. chapter 13. (b) Health insurers offering major medical insurance plans shall participate in the Blueprint for Health as specified in 18 V.S.A. § 706. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/08/107Fetched: 10/21/2026