Group Coverage

V.S.A. tit. 8, ch. 107, subch. 3

in effect

8 V.S.A. § 4041 Group health insurance policies; definitions

4041. Group health insurance policies; definitions (a) As used in this section: (1) “Employees” includes the officers, managers, and employees of the employer; the partners, if the employer is a partnership; the officers, managers, and employees of subsidiary or affiliated corporations of a corporation employer; and the individual proprietors, partners, and employees of individuals and firms, the business of which is controlled by the insured employer through stock ownership, contract, or otherwise. (2) “Employer” may be deemed to include any municipal or governmental entity or officer, or the appropriate officer for an unincorporated town or gore or for the Unified Towns and Gores of Essex County, as well as private individuals, partnerships, and corporations. (b) Group health insurance is a form of health insurance that covers one or more persons, with or without their dependents, that is issued upon the following basis: (1)(A) Under a policy issued to an employer, who is deemed the policyholder, insuring at least one employee of the employer, for the benefit of persons other than the employer. (B) In accordance with section 3368 of this title, an employer domiciled in a jurisdiction other than Vermont that has more than 25 certificate-holder employees whose principal worksite and domicile is in Vermont and that is defined as a large group in its own jurisdiction and under the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, § 1304, as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, may purchase insurance in the large group health insurance market for its Vermont-domiciled certificate-holder employees. (2)(A) Under a policy issued: (i) to an association, a trust, or one or more trustees of a fund established by one or more associations otherwise eligible for the issuance of a policy under this subdivision (2) and maintained, directly or indirectly, by one or more associations for the benefit of its members or a contract or plan issued by such an association or trust; or (ii) by a multiple employer welfare arrangement as defined in the Employee Retirement Income Security Act of 1974, as amended. (B)(i) The association or associations shall have: (I) a minimum of 100 persons at the time of incorporation or formation; (II) been organized and maintained in good faith for purposes other than that of obtaining insurance; (III) been in active existence for at least one year; and (IV) a constitution and bylaws that provide that: (aa) the association or associations hold regular meetings not less than annually to further purposes of the members; (bb) except for credit unions, the association or associations collect dues or solicit contributions from members; and (cc) the members constitute a majority of the voting power of the association for all purposes and have representation on the governing board and committees. (ii)(I) The association or associations shall not be controlled by a health insurer, as evidenced by the operation of the association or associations. (II) The following factors may be used as evidence to determine whether an association is a health insurer-operated association; provided, however, that the presence or absence of one or more of these factors shall not serve to limit or be dispositive of such a determination: (aa) common board members, officers, executives, or employees; (bb) common ownership of the health insurer and the association, or of the association and another eligible group; and (cc) common use of office space or equipment used by the health insurer to transact insurance. (C) An association’s members shall have a shared or common purpose that is not primarily a business or customer relationship. (D)(i) A policy issued by an association shall not insure persons other than the members or employees of the association or associations, or employees of members, or all of any class or classes of employees of the association, associations, or members, together, in each case, with the employees’ or members’ dependents, as applicable, for the benefit of persons other than the employee’s employer. (ii) A policy issued by an association shall insure all eligible persons, except those who reject coverage in writing. (E) An association shall not use the solicitation of insurance as the primary method of obtaining new members. (F) If a health insurer collects membership fees or dues on behalf of an association, the health insurer shall disclose to the members of the association that the health insurer is billing and collecting membership fees and dues on behalf of the association. (3)(A) Under a policy issued to a trust, or to one or more trustees of a fund established and maintained, directly or indirectly, by: (i) two or more employers; (ii) one or more labor unions or similar employee organizations; or (iii) one or more employers and one or more labor unions or similar employee organizations. (B)(i) A policy under this subdivision (3) must be issued to the trust or trustees for the purpose of insuring all of the employees of the employers or all of the members of the unions or organizations, or all of any class or classes of employees or members, together, in each case, with the employees’ or members’ dependents, as applicable, for the benefit of persons other than the employers or the unions or organizations. (ii) A policy issued to a trust shall insure all eligible persons, except those who reject coverage in writing. (4) Under a policy issued to any other substantially similar group that, in the discretion of the Commissioner, may be subject to the issuance of a group accident and sickness policy or contract. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4042 Group insurance policies; required policy provisions

4042. Group insurance policies; required policy provisions (a) Terms and conditions. No group health insurance policy shall contain any provision relating to notice of claim, proofs of loss, time of payment of claims, or time within which legal action must be brought upon the policy that, in the opinion of the Commissioner, is less favorable to the persons insured than would be permitted by the provisions set forth in section 4029 of this title. In addition, each such policy shall contain in substance the following provisions: (1) A provision that the policy; the application of the policyholder, if an application or copy is attached to the policy; and the individual applications, if any, submitted by the employees or members in connection with the policy shall constitute the entire contract between the parties, and that all statements, in the absence of fraud, made by any applicant or applicants shall be deemed representations and not warranties, and that no such statement shall avoid the insurance or reduce benefits under the policy unless contained in a written application, of which a copy is attached to the policy. (2) A provision that the health insurer will furnish to the policyholder, for delivery to each employee or member of the insured group, an individual certificate setting forth in summary form a statement of the essential features of the insurance coverage of the employee or member and to whom benefits are payable under the policy. If dependents are included in the coverage, only one certificate need be issued for each family unit. (3) A provision that to the group originally insured may be added from time to time eligible new employees or members or dependents, as the case may be, in accordance with the terms of the policy. (4) A provision that the health insurer shall not exclude part-time employees and shall offer the same group health benefits to part-time employees as it offers to the employee groups of which the part-time employees would be members if they were full-time employees. The health insurer shall offer to include the part-time employees as part of the employer’s employee group, at the full rate to be paid by the employer and the employee, at a rate prorated between the employer and the employee, or at the employee’s expense. As used in this subdivision, “part-time employee” means any employee who works a minimum of at least 17.5 hours per week. (b) Protections for covered individuals. (1) Preexisting condition exclusions. A group insurance policy shall not contain any provision that excludes, restricts, or otherwise limits coverage under the policy for one or more preexisting health conditions. (2) Annual limitations on cost sharing. (A)(i) The annual limitation on cost sharing for self-only coverage for any year shall be the same as the dollar limit established by the federal government for self-only coverage for that year in accordance with 45 C.F.R. § 156.130. (ii) The annual limitation on cost sharing for other than self-only coverage for any year shall be twice the dollar limit for self-only coverage described in subdivision (i) of this subdivision (A). (B)(i) In the event that the federal government does not establish an annual limitation on cost sharing for any plan year, the annual limitation on cost sharing for self-only coverage for that year shall be the dollar limit for self-only coverage in the preceding calendar year, increased by any percentage by which the average per capita premium for health insurance coverage in Vermont for the preceding calendar year exceeds the average per capita premium for the year before that. (ii) The annual limitation on cost sharing for other than self-only coverage for any year in which the federal government does not establish an annual limitation on cost sharing shall be twice the dollar limit for self-only coverage described in subdivision (i) of this subdivision (B). (3) Ban on annual and lifetime limits. A group insurance policy shall not establish any annual or lifetime limit on the dollar amount of essential health benefits, as defined in Section 1302(b) of 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, and applicable regulations and federal guidance, for any individual insured under the policy, regardless of whether the services are provided in-network or out-of-network. (4) No cost sharing for preventive services. (A) A group insurance policy shall not impose any co-payment, coinsurance, or deductible requirements for: (i) preventive services that have an “A” or “B” rating in the current recommendations of the U.S. Preventive Services Task Force; (ii) recommended immunizations as defined in 18 V.S.A. § 1130; (ii) immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved; (iii) with respect to infants, children, and adolescents, evidence-informed preventive care and screenings as set forth in comprehensive guidelines supported by the federal Health Resources and Services Administration; and (iv) with respect to women, to the extent not included in subdivision (i) of this subdivision (4)(A), evidence-informed preventive care and screenings set forth in binding comprehensive health plan coverage guidelines supported by the federal Health Resources and Services Administration. (B) Subdivision (A) of this subdivision (4) shall apply to a high-deductible health plan only to the extent that it would not disqualify the plan from eligibility for a health savings account pursuant to 26 U.S.C. § 223. (5) Definition of “group insurance policy.” As used in this subsection, “group insurance policy” has the same meaning as “group health plan” and shall be subject to the same excepted benefits, in each case, as set forth in 45 C.F.R. § 146.145, as in effect as of December 31, 2017. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025; amended 2025, No. 76 (Adj. Sess.), § 4, eff. Mar. 24, 2026; 2025, No. 76 (Adj. Sess.), § 10, eff. July 1, 2031.

8 V.S.A. § 4043 Association health plans

4043. Association health plans (a)(1) As used in this section, “association health plan” means a policy issued to an association; to a trust; or to one or more trustees of a fund established, created, or maintained for the benefit of the members of one or more associations or a contract or plan issued by an association or trust or by a multiple employer welfare arrangement as defined in the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (2) No association health plan shall be issued, offered, or renewed in this State to any person other than an association that was formed or could have been formed under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., and accompanying U.S. Department of Labor regulations and guidance, in each case, as in effect as of January 19, 2017. (b) The Commissioner shall adopt rules pursuant to 3 V.S.A. chapter 25 regulating association health plans in order to protect Vermont consumers and promote the stability of Vermont’s health insurance markets, to the extent permitted under federal law, including rules regarding licensure, solvency and reserve requirements, and rating requirements. (c) The provisions of section 3661 of this title shall apply to association health plans. 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