|BILL AS INTRODUCED||2007-2008|
Introduced by Representatives Ainsworth of Royalton, Bray of New Haven, Larrabee of Danville, Malcolm of Pawlet and Stevens of Shoreham
Subject: Insurance; health; small group; 75 percent rule
Statement of purpose: This bill proposes to allow small businesses that offer health insurance to all full-time and part-time employees to purchase small group insurance even if less than 75 percent of the employees enroll in the employer’s plan.
AN ACT RELATING TO ELIMINATION OF THE RULE PROHIBITING SMALL BUSINESSES FROM BUYING HEALTH INSURANCE UNLESS 75 percent OF EMPLOYEES ENROLL
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 8 V.S.A. § 4080 is amended to read:
§ 4080. SMALL GROUP HEALTH BENEFIT PLANS
(a) Definitions. As used in this section:
(1) “Small employer” means an employer who, on at least 50 percent of its working days during the preceding calendar quarter, employs at least one and no more than 50 employees. The term includes self-employed persons. Calculation of the number of employees of a small employer shall not include a part-time employee who works less than 30 hours per week. The provisions of this section shall continue to apply until the plan anniversary date following the date the employer no longer meets the requirements of this subdivision.
(2) “Small group” means:
(A) a small employer; or
(B) an association, trust or other group issued a health insurance policy subject to regulation by the commissioner under subdivisions 4079(2), (3) or (4) of this title.
(3) “Small group plan” means a group health insurance policy, a nonprofit hospital or medical service corporation service contract or a health maintenance organization health benefit plan offered or issued to a small group, including but not limited to common health care plans approved by the commissioner under subsection (e) of this section. The term does not include disability insurance policies, accident indemnity or expense policies, long-term care insurance policies, student or athletic expense or indemnity policies, dental policies, policies that supplement the Civilian Health and Medical Program of the Uniformed Services, or Medicare supplemental policies.
(4) “Registered small group carrier” means any person, except an insurance agent, broker, appraiser, or adjuster, who issues a small group plan and who has a registration in effect with the commissioner as required by this section.
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(l) A registered small group carrier which is not a nonprofit health maintenance organization shall require that at least 75 percent of the employees or members of a small group participate in the carrier’s plan, provided that if a nonprofit health maintenance organization provides a small group plan to more than 25 percent of the employees or members of the small group, a registered small group carrier may offer or continue to provide its small group plan to the remaining employees or members. A small employer that offers health insurance to all its part-time and full-time employees shall not be prohibited from purchasing a small group plan solely because less than 75 percent of those employees participate. For purposes of this requirement, the registered small group carrier shall not include in its calculation an employee or member who is already covered by another group health benefit plan as a spouse or dependent. If the small group is an association, trust, or other substantially similar group, this participation requirement shall be calculated on an employer-by-employer basis.
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The Vermont General Assembly
115 State Street