The Vermont Statutes Online

Title 32: Taxation and Finance

Chapter 243: Health Care Claims Tax

• § 10401. Definitions

  As used in this chapter:

  (1) “Health insurance” means any group or individual health care benefit policy, contract, or other health benefit plan offered, issued, renewed, or administered by any health insurer, including any health care benefit plan offered, issued, renewed, or administered by any health insurance company, any nonprofit hospital and medical service corporation, any dental service corporation, or any managed care organization as defined in 18 V.S.A. § 9402. The term includes comprehensive major medical policies, contracts, or plans; short-term, limited-duration health insurance policies and contracts as defined in 8 V.S.A. § 4084a; student health insurance policies; and Medicare supplemental policies, contracts, or plans, but does not include Medicaid or any other State health care assistance program in which claims are financed in whole or in part through a federal program unless authorized by federal law and approved by the General Assembly. The term does not include policies issued for specified disease, accident, injury, hospital indemnity, long-term care, disability income, or other limited benefit health insurance policies, except that any policy providing coverage for dental services shall be included.

  (2) “Health insurer” means any person who offers, issues, renews, or administers a health insurance policy, contract, or other health benefit plan in this State and includes third party administrators or pharmacy benefit managers who provide administrative services only for a health benefit plan offering coverage in this State. The term does not include a third party administrator or pharmacy benefit manager to the extent that a health insurer has paid the fee that would otherwise be imposed in connection with health care claims administered by the third party administrator or pharmacy benefit manager. (Added 2013, No. 73, § 48; amended 2017, No. 131 (Adj. Sess.), § 4, eff. May 16, 2018; 2019, No. 14, § 83, eff. April 30, 2019.)

• [Effective until July 1, 2025.]

  § 10402. Health care claims tax

  (a) There is imposed on every health insurer an annual tax in an amount equal to 0.999 of one percent of all health insurance claims paid by the health insurer for its Vermont members in the previous fiscal year ending June 30. The annual fee shall be paid to the Commissioner of Taxes in one installment due by January 1.

  (b) Revenues paid and collected under this chapter shall be deposited as follows:

  (1) 0.199 of one percent of all health insurance claims into the Health IT-Fund established in section 10301 of this title; and

  (2) 0.8 of one percent of all health insurance claims into the General Fund.

  (c) The annual cost to obtain Vermont Healthcare Claims Uniform Reporting and Evaluation System (VHCURES) data, pursuant to 18 V.S.A. § 9410, for use by the Department of Taxes shall be paid from the Vermont Health IT-Fund and the General Fund in the same proportion as revenues are deposited into those Funds.

  (d) It is the intent of the General Assembly that all health insurers shall contribute equitably through the tax imposed in subsection (a) of this section. In the event that the tax is found not to be enforceable as applied to third-party administrators or other entities, the tax owed by all other health insurers shall remain at the existing level and the General Assembly shall consider alternative funding mechanisms that would be enforceable as to all health insurers. (Added 2013, No. 73, § 48; amended 2013, No. 73, § 53, eff. July 1, 2019; 2019, No. 6, § 72, eff. April 22, 2019.)

• [Effective July 1, 2025.]

  § 10402. Health care claims tax

  (a) There is imposed on every health insurer an annual tax in an amount equal to 0.8 of one percent of all health insurance claims paid by the health insurer for its Vermont members in the previous fiscal year ending June 30. The annual fee shall be paid to the Commissioner of Taxes in one installment due on or before January 1.

  (b) Revenues paid and collected under this chapter shall be deposited into the General Fund.

  (c) The annual cost to obtain Vermont Healthcare Claims Uniform Reporting and Evaluation System (VHCURES) data, pursuant to 18 V.S.A. § 9410, for use by the Department of Taxes shall be paid from the General Fund.

  (d) It is the intent of the General Assembly that all health insurers shall contribute equitably through the tax imposed in subsection (a) of this section. In the event that the tax is found not to be enforceable as applied to third-party administrators or other entities, the tax owed by all other health insurers shall remain at the existing level and the General Assembly shall consider alternative funding mechanisms that would be enforceable as to all health insurers. (Added 2013, No. 73, § 48; amended 2013, No. 73, § 53, eff. July 1, 2019; 2019, No. 6, § 72, eff. April 22, 2019; 2019, No. 6, § 73, eff. July 1, 2025.)

• § 10403. Administration of tax

  (a) The Commissioner of Taxes shall administer and enforce this chapter and the tax. The Commissioner may adopt rules under 3 V.S.A. chapter 25 to carry out such administration and enforcement.

  (b) All of the administrative provisions of chapter 151 of this title, including those relating to the collection and enforcement by the Commissioner of the withholding tax and the income tax, shall apply to the tax imposed by this chapter. In addition, the provisions of chapter 103 of this title, including those relating to the imposition of interest and penalty for failure to pay the tax as provided in section 10402 of this title, shall apply to the tax imposed by this chapter. (Added 2013, No. 73, § 48.)

• § 10404. Determination of deficiency, refund, penalty, or interest

  (a) Within 60 days after the mailing of a notice of deficiency, denial, or reduction of a refund claim, or assessment of penalty or interest, a health insurer may petition the Commissioner in writing for a determination of that deficiency, refund, or assessment. The Commissioner shall thereafter grant a hearing upon the matter and notify the health insurer in writing of his or her determination concerning the deficiency, penalty, or interest. This is the exclusive remedy of a health insurer with respect to these matters.

  (b) Any hearing granted by the Commissioner under this section shall be subject to and governed by 3 V.S.A. chapter 25.

  (c) Any aggrieved health insurer may, within 30 days after a determination by the Commissioner concerning a notice of deficiency, an assessment of penalty or interest, or a claim to refund, appeal that determination to the Washington Superior Court or to the Superior Court for the county in which the health insurer has a place of business. (Added 2013, No. 73, § 48.)