§ 1811 — Health benefit plans for individuals and small employers

(a) As used in this section:
[Subdivision (a)(1) effective until January 1, 2026; see also subdivision (a)(1) effective January 1, 2026 set out below.]
(1) “Health benefit plan” means a health insurance policy, a nonprofit hospital or medical service corporation service contract, or a health maintenance organization health benefit plan offered through the Vermont Health Benefit Exchange or a reflective health benefit plan offered in accordance with section 1813 of this title that is issued to an individual or to an employee of a small employer. The term does not include coverage only for accident or disability income insurance, liability insurance, coverage issued as a supplement to liability insurance, workers’ compensation or similar insurance, automobile medical payment insurance, credit-only insurance, coverage for on-site medical clinics, or other similar insurance coverage in which benefits for health services are secondary or incidental to other insurance benefits as provided under the Affordable Care Act. The term also does not include stand-alone dental or vision benefits; long-term care insurance; short-term, limited-duration health insurance; specific disease or other limited benefit coverage; Medicare supplemental health benefits; Medicare Advantage plans; and other similar benefits excluded under the Affordable Care Act.
[Subdivision (a)(1) effective January 1, 2026; see also subdivision (a)(1) effective until January 1, 2026 set out above.]
(1) “Health benefit plan” means a health insurance policy, a nonprofit hospital or medical service corporation service contract, or a health maintenance organization health benefit plan offered through the Vermont Health Benefit Exchange or a reflective health benefit plan offered in accordance with section 1813 of this title that is issued to an individual in the individual market or to an employee of a small employer in the small group market. The term does not include coverage only for accident or disability income insurance, liability insurance, coverage issued as a supplement to liability insurance, workers’ compensation or similar insurance, automobile medical payment insurance, credit-only insurance, coverage for on-site medical clinics, or other similar insurance coverage in which benefits for health services are secondary or incidental to other insurance benefits as provided under the Affordable Care Act. The term also does not include stand-alone dental or vision benefits; long-term care insurance; short-term, limited-duration health insurance; specific disease or other limited benefit coverage; Medicare supplemental health benefits; Medicare Advantage plans; and other similar benefits excluded under the Affordable Care Act.
(2) “Registered carrier” means any person, except an insurance agent, broker, appraiser, or adjuster, who issues a health benefit plan and who has a registration in effect with the Commissioner of Financial Regulation as required by this section.
[Subdivision (a)(3) effective until January 1, 2026; see also subdivision (a)(3) effective January 1, 2026 set out below.]
(3)(A) Until January 1, 2016, “small employer” means an entity that employed an average of not more than 50 employees on working days during the preceding calendar year. The term includes self-employed persons to the extent permitted under the Affordable Care Act. Calculation of the number of employees of a small employer shall not include a part-time employee who works fewer than 30 hours per week or a seasonal worker as defined in 26 U.S.C. § 4980H(c)(2)(B). An employer may continue to participate in the Exchange even if the employer’s size grows beyond 50 employees, as long as the employer continuously makes qualified health benefit plans in the Vermont Health Benefit Exchange available to its employees.
(B) Beginning on January 1, 2016, “small employer” means an entity that employed an average of not more than 100 employees on working days during the preceding calendar year. The term includes self-employed persons to the extent permitted under the Affordable Care Act. The number of employees shall be calculated using the method set forth in 26 U.S.C. § 4980H(c)(2). An employer may continue to participate in the Exchange even if the employer’s size grows beyond 100 employees, as long as the employer continuously makes qualified health benefit plans in the Vermont Health Benefit Exchange available to its employees.
[Subdivision (a)(3) effective January 1, 2026; see also subdivision (a)(3) effective until January 1, 2026 set out above.]
(3) “Small employer” means an entity that employed an average of not more than 100 employees on working days during the preceding calendar year. The term includes self-employed persons to the extent permitted under the Affordable Care Act. The number of employees shall be calculated using the method set forth in 26 U.S.C. § 4980H(c)(2). An employer may continue to participate in the Exchange even if the employer’s size grows beyond 100 employees, provided the employer continuously makes qualified health benefit plans in the Vermont Health Benefit Exchange available to its employees.
[Subsection (b) effective until January 1, 2026; see also subsection (b) effective January 1, 2026 set out below.]
(b)(1) To the extent permitted by the U.S. Department of Health and Human Services, an individual may purchase a health benefit plan through the Exchange website, through navigators, by telephone, or directly from a registered carrier under contract with the Vermont Health Benefit Exchange, if the carrier elects to make direct enrollment available. A registered carrier enrolling individuals in health benefit plans directly shall comply with all open enrollment and special enrollment periods applicable to the Vermont Health Benefit Exchange.
(2) To the extent permitted by the U.S. Department of Health and Human Services, a small employer or an employee of a small employer may purchase a health benefit plan through the Exchange website, through navigators, by telephone, or directly from a registered carrier under contract with the Vermont Health Benefit Exchange.
(3) No person may provide a health benefit plan to an individual or small employer unless the plan complies with the provisions of this subchapter.
[Subsection (b) effective January 1, 2026; see also subsection (b) effective until January 1, 2026 set out above.]
(b)(1) An individual may purchase a health benefit plan through the Exchange website, through navigators, by telephone, or directly from a registered carrier under contract with the Vermont Health Benefit Exchange. A registered carrier enrolling individuals in health benefit plans directly shall comply with all open enrollment and special enrollment periods applicable to the Vermont Health Benefit Exchange.
(2) A small employer or an employee of a small employer may purchase a health benefit plan directly from a registered carrier under contract with the Vermont Health Benefit Exchange.
(3) No person may provide a health benefit plan to an individual or to a small employer unless the plan complies with the provisions of this subchapter.
[Subsection (c) effective until January 1, 2026; see also subsection (c) effective January 1, 2026 set out below.]
(c) No person may provide a health benefit plan to an individual or small employer unless such person is a registered carrier. The Commissioner of Financial Regulation shall establish, by rule, the minimum financial, marketing, service, and other requirements for registration. Such registration shall be effective upon approval by the Commissioner of Financial Regulation and shall remain in effect until revoked or suspended by the Commissioner of Financial Regulation for cause or until withdrawn by the carrier. A carrier may withdraw its registration upon at least six months’ prior written notice to the Commissioner of Financial Regulation. A registration filed with the Commissioner of Financial Regulation shall be deemed to be approved unless it is disapproved by the Commissioner of Financial Regulation within 30 days of filing.
[Subsection (c) effective January 1, 2026; see also subsection (c) effective until January 1, 2026 set out above.]
(c) No person may provide a health benefit plan to an individual or to a small employer unless such person is a registered carrier. The Commissioner of Financial Regulation shall establish, by rule, the minimum financial, marketing, service, and other requirements for registration. Such registration shall be effective upon approval by the Commissioner of Financial Regulation and shall remain in effect until revoked or suspended by the Commissioner of Financial Regulation for cause or until withdrawn by the carrier. A carrier may withdraw its registration upon at least six months’ prior written notice to the Commissioner of Financial Regulation. A registration filed with the Commissioner of Financial Regulation shall be deemed to be approved unless it is disapproved by the Commissioner of Financial Regulation within 30 days of filing.
[Subdivision (d)(1) effective until January 1, 2026; see also subdivision (d)(1) effective January 1, 2026 set out below.]
(d)(1) Guaranteed issue. A registered carrier shall guarantee acceptance of all individuals, small employers, and employees of small employers, and each dependent of such individuals and employees, for any health benefit plan offered by the carrier, regardless of any outstanding premium amount a subscriber may owe to the carrier for coverage provided during the previous plan year.
[Subdivision (d)(1) effective January 1, 2026; see also subdivision (d)(1) effective until January 1, 2026 set out above.]
(1) Guaranteed issue. (A) A registered carrier shall guarantee acceptance of all individuals and their dependents for any health benefit plan offered by the carrier in the individual market, regardless of any outstanding premium amount a subscriber may owe to the carrier for coverage provided during the previous plan year.
(B) A registered carrier shall guarantee acceptance of all small employers, their employees, and their employees’ dependents for any health benefit plan offered by the carrier in the small group market, regardless of any outstanding premium amount a subscriber may owe to the carrier for coverage provided during the previous plan year.
(2) Preexisting condition exclusions. A registered carrier shall not exclude, restrict, or otherwise limit coverage under a health benefit plan for any preexisting health condition.
(3) 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).
(4) Ban on annual and lifetime limits. A health benefit plan 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 plan, regardless of whether the services are provided in-network or out-of-network.
(5)(A) No cost sharing for preventive services. A health benefit plan 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) 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 (5)(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 (5) 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.
(e) A registered carrier shall offer a health benefit plan rate structure that at least differentiates between single person, two person, and family rates.
[Subdivision (f)(1) effective until January 1, 2026; see also subdivision (f)(1) effective January 1, 2026 set out below.]
(f)(1) A registered carrier shall use a community rating method acceptable to the Commissioner of Financial Regulation for determining premiums for health benefit plans. Except as provided in subdivision (2) of this subsection, the following risk classification factors are prohibited from use in rating individuals, small employers, or employees of small employers, or the dependents of such individuals or employees:
(A) demographic rating, including age and gender rating;
(B) geographic area rating;
(C) industry rating;
(D) medical underwriting and screening;
(E) experience rating;
(F) tier rating; or
(G) durational rating.
[Subdivision (f)(1) effective January 1, 2026; see also subdivision (f)(1) effective until January 1, 2026 set out above.]
(1) A registered carrier shall use a community rating method acceptable to the Commissioner of Financial Regulation for determining premiums for health benefit plans and shall determine the premiums for the carrier’s individual market plans separately from the premiums for its small group market plans. Except as provided in subdivision (2) of this subsection, the following risk classification factors are prohibited from use in rating individuals, small employers, or employees of small employers, or the dependents of such individuals or employees:
(A) demographic rating, including age and gender rating;
(B) geographic area rating;
(C) industry rating;
(D) medical underwriting and screening;
(E) experience rating;
(F) tier rating; or
(G) durational rating.
(2)(A) The Commissioner of Financial Regulation shall, by rule, adopt standards and a process for permitting registered carriers to use one or more risk classifications in their community rating method, provided that the premium charged shall not deviate above or below the community rate filed by the carrier by more than 20 percent and provided further that the Commissioner of Financial Regulation’s rules may not permit any medical underwriting and screening and shall give due consideration to the need for affordability and accessibility of health insurance.
(B) The Commissioner of Financial Regulation’s rules shall permit a carrier, including a hospital or medical service corporation and a health maintenance organization, to establish rewards, premium discounts, split benefit designs, rebates, or otherwise waive or modify applicable co-payments, deductibles, or other cost-sharing amounts in return for adherence by a member or subscriber to programs of health promotion and disease prevention. The Commissioner of Financial Regulation shall consult with the Commissioner of Health, the Director of the Blueprint for Health, and the Commissioner of Vermont Health Access in the development of health promotion and disease prevention rules that are consistent with the Blueprint for Health. Such rules shall:
(i) limit any reward, discount, rebate, or waiver or modification of cost-sharing amounts to not more than a total of 15 percent of the cost of the premium for the applicable coverage tier, provided that the sum of any rate deviations under subdivision (A) of this subdivision (2) does not exceed 30 percent;
(ii) be designed to promote good health or prevent disease for individuals in the program and not be used as a subterfuge for imposing higher costs on an individual based on a health factor;
(iii) provide that the reward under the program is available to all similarly situated individuals and shall comply with the nondiscrimination provisions of the federal Health Insurance Portability and Accountability Act of 1996; and
(iv) provide a reasonable alternative standard to obtain the reward to any individual for whom it is unreasonably difficult due to a medical condition or other reasonable mitigating circumstance to satisfy the otherwise applicable standard for the discount and disclose in all plan materials that describe the discount program the availability of a reasonable alternative standard.
(C) The Commissioner of Financial Regulation’s rules shall include:
(i) standards and procedures for health promotion and disease prevention programs based on the best scientific, evidence-based medical practices as recommended by the Commissioner of Health;
(ii) standards and procedures for evaluating an individual’s adherence to programs of health promotion and disease prevention; and
(iii) any other standards and procedures necessary or desirable to carry out the purposes of this subdivision (2).
(D) The Commissioner of Financial Regulation may require a registered carrier to identify that percentage of a requested premium increase that is attributed to the following categories: hospital inpatient costs, hospital outpatient costs, pharmacy costs, primary care, other medical costs, administrative costs, and projected reserves or profit. Reporting of this information shall occur at the time a rate increase is sought and shall be in the manner and form directed by the Commissioner of Financial Regulation. Such information shall be made available to the public in a manner that is easy to understand.
(g) A registered carrier shall file with the Commissioner of Financial Regulation an annual certification by a member of the American Academy of Actuaries of the carrier’s compliance with this section. The requirements for certification shall be as the Commissioner of Financial Regulation prescribes by rule.
(h) A registered carrier shall provide, on forms prescribed by the Commissioner of Financial Regulation, full disclosure to a small employer of all premium rates and any risk classification formulas or factors prior to acceptance of a plan by the small employer.
(i) A registered carrier shall guarantee the rates on a health benefit plan for a minimum of 12 months.
(j) The Commissioner of Financial Regulation or the Green Mountain Care Board established in 18 V.S.A. chapter 220, as appropriate, shall disapprove any rates filed by any registered carrier, whether initial or revised, for insurance policies unless the anticipated medical loss ratios for the entire period for which rates are computed are at least 80 percent, as required by the Affordable Care Act.
[Subsection (k) effective until January 1, 2026; see also subsection (k) effective January 1, 2026 set out below.]
(k) The guaranteed acceptance provision of subsection (d) of this section shall not be construed to limit an employer’s discretion in contracting with his or her employees for insurance coverage.
[Subsection (k) effective January 1, 2026; see also subsection (k) effective until January 1, 2026 set out above.]
(k) The guaranteed acceptance provision of subsection (d) of this section shall not be construed to limit an employer’s discretion in contracting with the employer’s employees for insurance coverage.
(l)(1) A registered carrier shall allow for the enrollment of a pregnant individual, and of any individual who is eligible for coverage under the terms of the health benefit plan because of a relationship to the pregnant individual, at any time after the commencement of the pregnancy. Coverage shall be effective as of the first of the month following the individual’s selection of a health benefit plan.
(2) A registered carrier shall allow an individual who is eligible for advance payments of federal premium tax credits under 26 U.S.C. § 36B and whose household income for the year is expected to be not greater than 200 percent of the federal poverty level, and any individual who is eligible for coverage because of a relationship to that individual, to enroll in a health benefit plan through the Vermont Health Benefit Exchange at any time during the plan year. (Added 2011, No. 171 (Adj. Sess.), § 3, eff. Jan. 1, 2013; amended 2013, No. 79, § 5n, eff. Jan. 1, 2014; 2013, No. 79, § 30, eff. Oct. 1, 2013; 2013, No. 144 (Adj. Sess.), § 3, eff. May 27, 2014; 2015, No. 54, § 12, eff. June 5, 2015; 2015, No. 120 (Adj. Sess.), § 4; 2017, No. 85, § E.306.3; 2017, No. 88 (Adj. Sess.), § 3, eff. Feb. 20, 2018; 2017, No. 131 (Adj. Sess.), § 6, eff. May 16, 2018; 2019, No. 19, § 5, eff. Jan. 1, 2020; 2019, No. 63, § 6, eff. Jan. 1, 2020; 2025, No. 2, § 4, eff. January 1, 2026; 2025, No. 27, § E.306.3, eff. July 1, 2025.)