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It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  18 V.S.A. § 9406(a)(2) is amended to read:

(2)  When preparing the budget, the board commissioner shall consider health care costs and the impact of the budget on those who receive, provide and pay for health care services.

Sec. 2.  18 V.S.A. § 9406(b)(1) and (2) are amended to read:

(b)(1) Annually the division of health care administration shall prepare a ten-year three-year projection of health care expenditures made on behalf of Vermont residents, based on the format of the health care budget and expenditure analysis adopted by the commissioner under this section, projecting expenditures in broad sectors such as hospital, physician, home health, or pharmacy. The projection shall include estimates for:

(A)  Expenditures for the health plans of any hospital and medical service corporation, health maintenance organizations, Medicaid program, or other health plan regulated by this state which covers more than five percent of the state population.

(B)  Expenditures for Medicare, all self-insured employers, and all other health insurance.

(2)  Each health plan payer identified under subdivision (1)(A) of this subsection shall may comment on the division’s proposed projections, including comments concerning whether the plan agrees with the proposed projection, alternative projections developed by the plan, and a description of what mechanisms, if any, the plan has identified to reduce its health care expenditures.  Comments shall may also include a comparison of the plan’s actual expenditures with the applicable projections for the prior year, and an evaluation of the efficacy of any cost containment efforts the plan has made.

Sec. 3.  8 V.S.A. § 4090a(a) is amended to read:

(a)  All group health insurance policies, issued by an insurance company, a nonprofit hospital or medical service corporation, a self-insured group plan and prepaid health insurance plans delivered or issued for delivery in this state which insure employees or members for hospital and medical insurance on an expense incurred, service basis or prepaid basis, other than for specific diseases or for accidental injuries only, shall provide that any person whose insurance under the group policy would terminate because of the termination of employment, divorce or legal separation of the covered employee from the employee’s spouse, a dependent child ceasing to be a dependent child under the generally applicable requirements of the policy, or the death of the covered employee or member shall be entitled to continue their hospital and medical insurance under that group policy.

Sec. 4.  8 V.S.A. § 4090b(a) is amended to read:

(a)  A person electing continuation shall notify the insurer, or the policyholder, or the contractor, or agent for the group if the policyholder did not contract for the policy directly with the insurer, of such election in writing within sixty (60) 60 days if the employee or member is deceased, or 30 days if the employee has been terminated, the covered employee becomes divorced or legally separated, or a dependent child ceases to be a dependent child under the generally applicable requirements of the policy, of the date that coverage under the group policy would otherwise terminate, or the date the person is given notice of the right of continuation, whichever is sooner.  Notice of election to continue under the group policy shall be accompanied by the initial contribution.

Sec. 5.  8 V.S.A. § 4090c is amended to read:


Continuation of insurance under the group policy shall terminate upon the occurrence of any of the following:

(1)  the date six months after the date that insurance under the policy would have terminated due to the death or loss of employment of the employee or member, the divorce or legal separation of the covered employee from the employee’s spouse, or a dependent child ceasing to be a dependent child under the generally applicable requirements of the policy of the employee or member;

(2)  the person fails to make timely payment of the required contribution;

(3)  the person is or could be covered by Medicare;

(4)  the date on which the group policy is terminated or, in the case of an employee, the date the decedent’s or terminated employee’s employer terminates participation under the group policy.  If such coverage is replaced by similar coverage under another group policy:

(A)  the person shall have the right to become covered under that replacement policy, for the balance of the period that he or she would have remained covered under the prior group policy;

(B)  the minimum level of benefits to be provided by the replacement policy shall be the applicable level of benefits of the prior group policy reduced by any benefits payable under that prior group policy;

(C)  the prior group policy shall continue to provide benefits to the extent of its accrued liabilities and extensions of benefits as if the replacement has not occurred.

Sec. 6.  REPEAL

8 V.S.A. § 4066(11) (insurer not liable for loss sustained by persons intoxicated or under the influence of a narcotic) is repealed.


This act shall take effect upon passage, except that Secs. 3, 4, 5 and 6 of this act shall apply to all health benefit plans on or after October 1, 2002 on such date as a plan is offered, issued or renewed, but in no event later than October 1, 2003.

Approved:  June 5, 2002