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

Sec. 1.  21 V.S.A. § 601(14)(H) is amended to read:

(H)  Any executive officer elected or appointed and empowered in accordance with the bylaws of the corporation shall be an employee of the corporation.  With the approval of the commissioner, an officer may elect not to come under the provisions of this chapter and if all officers of the corporation make such election and the corporation has no employees, the corporation shall not be required to purchase workers' compensation coverage The individual officers of a corporation and the individual managers or members of a limited liability corporation by affirmatively electing exclusion from coverage and obtaining the approval of the commissioner.  If after election, the officer excluded individual suffers a personal injury and files a claim under this chapter, the employer shall have all the defenses available in a personal injury claim.  However, this election shall not prevent any other individual, other than the executive officer excluded individual, found to be an employee of the corporation business to recover workers' compensation from either the corporation or the statutory employer.

Sec. 2.  21 V.S.A. § 640(d) is amended to read:

(d)  The liability of the employer to pay for medical, surgical, hospital, and nursing services and supplies, prescription drugs, and durable medical equipment provided to the injured employee under this section shall not exceed the maximum fee for a particular service, prescription drug, or durable medical equipment as provided by a schedule of fees and rates prepared by the commissioner.  From May 15, 2006 to September 30, 2006, an employer’s payment for inpatient and outpatient hospital services shall be based on the statewide average discounted payment that providers received from commercial payers in fiscal year 2006.  When calculating the fiscal year 2006 statewide average commercial payer discounted payment, hospital budget submissions will be used and physician care charges shall be excluded.  Starting October 1, 2006, and in subsequent fiscal years, the fiscal year 2006 statewide average commercial payer discounted payment shall be adjusted annually with a methodology to be set by rule, which shall make the annual adjustment consistent with the change in aggregate Vermont hospital costs.  The reimbursement rate for services and supplies in the commissioner’s fee schedule shall include consideration of consider medical necessity, clinical efficacy, cost-effectiveness, and safety, and those services and supplies shall be provided on a nondiscriminatory basis consistent with workers’ compensation and health care law.  The commissioner shall authorize reimbursement at a rate higher than the scheduled rate if the employee demonstrates to the commissioner’s satisfaction that reasonable and necessary treatment, prescription drugs, or durable medical equipment is not available at the scheduled rate.  An employer shall establish direct billing and payment procedures and notification procedures as necessary for coverage of medically‑necessary prescription medications for chronic conditions of injured employees, in accordance with rules adopted by the commissioner.


This act shall take effect on July 1, 2006, except Secs. 2 and 2a, which shall take effect upon passage.

Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont