§ 4041. Group health insurance policies; definitions
(a) As used in this section:
(1) “Employees” includes the officers, managers, and employees of the employer; the partners,
if the employer is a partnership; the officers, managers, and employees of subsidiary
or affiliated corporations of a corporation employer; and the individual proprietors,
partners, and employees of individuals and firms, the business of which is controlled
by the insured employer through stock ownership, contract, or otherwise.
(2) “Employer” may be deemed to include any municipal or governmental entity or officer,
or the appropriate officer for an unincorporated town or gore or for the Unified Towns
and Gores of Essex County, as well as private individuals, partnerships, and corporations.
(b) Group health insurance is a form of health insurance that covers one or more persons,
with or without their dependents, that is issued upon the following basis:
(1)(A) Under a policy issued to an employer, who is deemed the policyholder, insuring at
least one employee of the employer, for the benefit of persons other than the employer.
(B) In accordance with section 3368 of this title, an employer domiciled in a jurisdiction other than Vermont that has more than 25
certificate-holder employees whose principal worksite and domicile is in Vermont and
that is defined as a large group in its own jurisdiction and under the Patient Protection
and Affordable Care Act, Pub. L. No. 111-148, § 1304, as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, may purchase insurance in the large group health insurance market for its Vermont-domiciled
certificate-holder employees.
(2)(A) Under a policy issued:
(i) to an association, a trust, or one or more trustees of a fund established by one or
more associations otherwise eligible for the issuance of a policy under this subdivision
(2) and maintained, directly or indirectly, by one or more associations for the benefit
of its members or a contract or plan issued by such an association or trust; or
(ii) by a multiple employer welfare arrangement as defined in the Employee Retirement Income
Security Act of 1974, as amended.
(B)(i) The association or associations shall have:
(I) a minimum of 100 persons at the time of incorporation or formation;
(II) been organized and maintained in good faith for purposes other than that of obtaining
insurance;
(III) been in active existence for at least one year; and
(IV) a constitution and bylaws that provide that:
(aa) the association or associations hold regular meetings not less than annually to further
purposes of the members;
(bb) except for credit unions, the association or associations collect dues or solicit
contributions from members; and
(cc) the members constitute a majority of the voting power of the association for all purposes
and have representation on the governing board and committees.
(ii)(I) The association or associations shall not be controlled by a health insurer, as evidenced
by the operation of the association or associations.
(II) The following factors may be used as evidence to determine whether an association
is a health insurer-operated association; provided, however, that the presence or
absence of one or more of these factors shall not serve to limit or be dispositive
of such a determination:
(aa) common board members, officers, executives, or employees;
(bb) common ownership of the health insurer and the association, or of the association
and another eligible group; and
(cc) common use of office space or equipment used by the health insurer to transact insurance.
(C) An association’s members shall have a shared or common purpose that is not primarily
a business or customer relationship.
(D)(i) A policy issued by an association shall not insure persons other than the members
or employees of the association or associations, or employees of members, or all of
any class or classes of employees of the association, associations, or members, together,
in each case, with the employees’ or members’ dependents, as applicable, for the benefit
of persons other than the employee’s employer.
(ii) A policy issued by an association shall insure all eligible persons, except those
who reject coverage in writing.
(E) An association shall not use the solicitation of insurance as the primary method of
obtaining new members.
(F) If a health insurer collects membership fees or dues on behalf of an association,
the health insurer shall disclose to the members of the association that the health
insurer is billing and collecting membership fees and dues on behalf of the association.
(3)(A) Under a policy issued to a trust, or to one or more trustees of a fund established
and maintained, directly or indirectly, by:
(i) two or more employers;
(ii) one or more labor unions or similar employee organizations; or
(iii) one or more employers and one or more labor unions or similar employee organizations.
(B)(i) A policy under this subdivision (3) must be issued to the trust or trustees for the
purpose of insuring all of the employees of the employers or all of the members of
the unions or organizations, or all of any class or classes of employees or members,
together, in each case, with the employees’ or members’ dependents, as applicable,
for the benefit of persons other than the employers or the unions or organizations.
(ii) A policy issued to a trust shall insure all eligible persons, except those who reject
coverage in writing.
(4) Under a policy issued to any other substantially similar group that, in the discretion
of the Commissioner, may be subject to the issuance of a group accident and sickness
policy or contract. (Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.)