The Vermont Statutes Online

Title 3 Appendix : Executive Orders

Chapter 008 : Banking and Insurance

• Executive Order No. 8-01 (No. 05-26) [Expanding Affordable Health Insurance Choices for Vermonters]

  WHEREAS, over several decades Vermont’s Legislature adopted a series of policies intended to facilitate a transition toward a government-run healthcare system, and although that goal was ultimately abandoned by the Shumlin Administration when it was determined to be unfeasible and unaffordable, many of the statutory and regulatory policies adopted leading up to and during that period remain in place and continue to limit affordable health insurance choices for Vermonters, particularly individuals, working families, and small businesses; and

  WHEREAS, public policy should be judged by the results it produces, and Vermont should no longer accept a health insurance marketplace that consistently offers higher costs and fewer affordable choices than neighboring states; and

  WHEREAS, the Green Mountain Care Board (GMCB) has existing authority in Act 68 of 2025 to begin implementing reference-based pricing for hospitals, and has existing regulatory authority to set hospital budgets, prices and revenue to lower the cost of care for all-payers; and

  WHEREAS, according to the Vermont Department of Health’s 2025 Household Health Insurance Survey Report, young adults are the most likely population to be uninsured, and because Vermont is failing to attract and retain the very people needed to lower insurance costs for everyone, and secure Vermont’s long-term demographic and economic future; and

  WHEREAS, Vermont can significantly improve affordability by expanding affordable health insurance choices, creating a more vibrant health insurance marketplace encouraging broader participation, and ensuring that individuals and small businesses have access to coverage options comparable in both quality and cost to those available in neighboring states; and

  WHEREAS, Vermont’s health insurance rating rules are among the most restrictive in the nation, and have resulted in far fewer affordable options for all Vermonters and small businesses; and

  WHEREAS, Section 2701 of the Patient Protection and Affordable Care Act (ACA) provides authority to vary premiums based on certain criteria and state law 33 V.S.A. § 1811(f) grants the Commissioner of the Department of Financial Regulation (DFR) authority to approve a community rating methodology; and

  WHEREAS, healthcare utilization generally increases with age, and Vermont’s current rating structure places a disproportionate share of premium costs on younger and healthier residents, drastically reducing affordability for the very population Vermont must attract and retain more of, for families and for Vermonters overall; and

  WHEREAS, Vermont’s current health insurance market provides too few affordable choices for many young adults, families, entrepreneurs, and small businesses, making it harder to attract and retain the workforce needed to strengthen our economy and improve stability and lower overall costs; and

  WHEREAS, restoring affordable health insurance choices is essential to attracting young workers, small business startups, and families whose participation makes insurance more affordable and supports the long-term economic security of all Vermonters; and

  WHEREAS, allowing variation in premiums based on age would reduce individual and small group market health insurance premiums for young Vermont residents and for employers with younger average age employees; and

  WHEREAS, the entrance and retention of young Vermont residents into these markets would diversify risk pools and place downward pressure on premiums for all enrollees, including older enrollees; and

  WHEREAS, Section 1332 of the ACA provides the ability to request state innovation waivers (ACA State Innovation Waivers), including waivers to implement reinsurance programs and other innovative practices; and

  WHEREAS, numerous neighboring and peer states have successfully used ACA State Innovation Waivers and other flexibility to expand affordable health insurance options, create reinsurance pools and reduce premiums; and

  WHEREAS, Vermont has several long-standing barriers governing the use of Multiple Employer Welfare Arrangements (MEWA) and Association Health Plans for employers to band together and offer affordable health coverage; and

  WHEREAS, allowing greater access to MEWAs and Association Health Plans would improve affordable coverage options for businesses and their employees; and

  WHEREAS, employers will benefit from greater options and incentives to offer coverage on the exchange, including individual coverage health reimbursement arrangements (ICHRAs), which offer employees greater flexibility to select the health insurance coverage that best meets their individual needs, while providing predictable healthcare benefit costs for small businesses; and

  WHEREAS, other states have adopted state-level tax credits to encourage small employers to offer coverage on the exchange using ICHRAs as an effective means to improve health care affordability for small businesses and their employees; and

  WHEREAS, it is the policy of this Administration that Vermont must take all reasonable steps to modernize its health insurance policies, including using every available executive and regulatory authority to restore affordable health insurance choices, while preparing necessary statutory reform proposals, many of which have been proposed to, and rejected by, past Legislatures to present to the new Legislature that will be elected in November and seated in January.

  NOW, THEREFORE, I, Philip B. Scott, Governor of the State of Vermont, by virtue of the authority vested in me by Chapter II, Sections 3 and 20 of the Vermont Constitution and applicable laws, do hereby order as follows:

  This Executive Order shall launch Vermont's Healthcare Affordability Initiative by directing Executive agencies to use every available State and federal statutory and regulatory authority to restore affordable health insurance choices, improve affordability for individuals and small businesses, strengthen Vermont's health insurance marketplace, and prepare recommendations for additional statutory reforms during the 2027 legislative session.

  This Healthcare Affordability Initiative shall include, but may not be limited to:

  (1) Age Rating Adjustments & Tobacco Abstinence Incentives

  • By December 31, 2026, DFR shall develop a plan to advance rules permitting health insurers to develop rate incentives based on non-use of tobacco products and to vary premium rates based on age, consistent with the rating bands authorized under the ACA.

  • In no instance shall the rating variation deviate more than 20 percent above or below the community rate, in compliance with 33 V.S.A. § 1811(f)(2).

  • DFR shall use its regulatory authority to implement such rating variations.

  (2) ACA State Innovation Waiver

  • By December 31, 2026, the Agency of Human Services, Department of Vermont Health Access (DVHA) in consultation with DFR shall prepare an application for an ACA State Innovation Waiver to explore options like a reinsurance pool that provides cost effective relief to Vermonters and leverage pass-through federal funding.

  • By February 1, 2027, DVHA shall propose to the Vermont House Committee on Health Care and the Vermont Senate Committee on Health and Welfare enabling legislation necessary to seek federal approval of a State Innovation Waiver under Section 1332 of the ACA.

  (3) Association Health Plans, MEWAs, and Small Business Reforms

  • DFR shall review Vermont's statutory and regulatory framework governing Association Health Plans (AHPs), Multiple Employer Welfare Arrangements (MEWAs), and related small employer health coverage options; pursue immediate regulatory changes in accordance with existing authority; and recommend any statutory changes necessary to expand affordable health insurance choices for Vermont’s small employers while maintaining appropriate consumer protections and market stability.

  • In developing such recommendations and regulatory changes DFR shall consider existing requirements for the size of associations, minimum employer and employee member participation, time in existence requirements, reserve requirements, medical loss ratios, essential health benefits, rating rules, market stability, solvency of the risk bearing entities and any other relevant factors.

  • DFR shall also examine stop-loss attachment point requirements and their impact on the ability of small employers to participate in self-funded arrangements, the National Association of Insurance Commissioners (NAIC) model stop-loss policies and the approaches adopted by neighboring and peer states, and other state practices for increasing choices and improving affordability.

  DFR shall specifically identify any statutory or regulatory provisions that unnecessarily limit affordable health insurance options for Vermont small businesses and individuals when compared to neighboring states and recommend executive or legislative actions necessary to address those barriers.

  (4) Tax Incentives

  • DFR, in consultation with DVHA and the Department of Taxes, shall evaluate successful tax incentive programs, such as ICHRA tax credits adopted in other states, including their effectiveness in expanding affordable choices for small businesses, and produce recommendations to the Governor, for potential presentation to the Vermont House Committee on Health Care and the Vermont Senate Committee on Health and Welfare, on the design of an ICHRA or other state tax incentives to improve affordability for coverage offered by Vermont businesses.

  (5) Green Mountain Care Board

  • The GMCB should fully utilize its existing statutory authority to implement the reference-based pricing reforms required by Act 68 of 2025. In exercising that authority, GMCB should prioritize system-wide affordability by ensuring resulting savings are broadly shared among all Vermonters, rather than concentrated on particular groups, markets, or payers, consistent with its statutory mission (see especially 18 V.S.A. § 9372 which states GMCB is charged with “reducing the per-capita rate of growth in expenditures for health services in Vermont across all payers” (emphasis added). This means individuals, small and large businesses, public employee plans, and non-profits, regardless of how they buy their insurance).

  This Executive Order represents the first step in a comprehensive Healthcare Affordability Initiative that begins immediately under existing Executive authority and continues through additional legislative proposals to modernize Vermont's health insurance framework, restore affordable health insurance choices, and reduce costs for Vermont families, individuals, and small businesses. It shall take effect immediately and remain in effect unless modified or extended by subsequent Executive action.

  Any agency unable to implement specific provisions due to legal constraints shall notify the Governor’s office immediately with recommendations for alternative approaches.

  Dated July 8, 2026.