§ 4042. Group insurance policies; required policy provisions
(a) Terms and conditions. No group health insurance policy shall contain any provision relating to notice of
claim, proofs of loss, time of payment of claims, or time within which legal action
must be brought upon the policy that, in the opinion of the Commissioner, is less
favorable to the persons insured than would be permitted by the provisions set forth
in section 4029 of this title. In addition, each such policy shall contain in substance the following provisions:
(1) A provision that the policy; the application of the policyholder, if an application
or copy is attached to the policy; and the individual applications, if any, submitted
by the employees or members in connection with the policy shall constitute the entire
contract between the parties, and that all statements, in the absence of fraud, made
by any applicant or applicants shall be deemed representations and not warranties,
and that no such statement shall avoid the insurance or reduce benefits under the
policy unless contained in a written application, of which a copy is attached to the
policy.
(2) A provision that the health insurer will furnish to the policyholder, for delivery
to each employee or member of the insured group, an individual certificate setting
forth in summary form a statement of the essential features of the insurance coverage
of the employee or member and to whom benefits are payable under the policy. If dependents
are included in the coverage, only one certificate need be issued for each family
unit.
(3) A provision that to the group originally insured may be added from time to time eligible
new employees or members or dependents, as the case may be, in accordance with the
terms of the policy.
(4) A provision that the health insurer shall not exclude part-time employees and shall
offer the same group health benefits to part-time employees as it offers to the employee
groups of which the part-time employees would be members if they were full-time employees.
The health insurer shall offer to include the part-time employees as part of the employer’s
employee group, at the full rate to be paid by the employer and the employee, at a
rate prorated between the employer and the employee, or at the employee’s expense.
As used in this subdivision, “part-time employee” means any employee who works a minimum
of at least 17.5 hours per week.
(b) Protections for covered individuals.
(1) Preexisting condition exclusions. A group insurance policy shall not contain any provision that excludes, restricts,
or otherwise limits coverage under the policy for one or more preexisting health conditions.
(2) Annual limitations on cost sharing.
(A)(i) The annual limitation on cost sharing for self-only coverage for any year shall be
the same as the dollar limit established by the federal government for self-only coverage
for that year in accordance with 45 C.F.R. § 156.130.
(ii) The annual limitation on cost sharing for other than self-only coverage for any year
shall be twice the dollar limit for self-only coverage described in subdivision (i)
of this subdivision (A).
(B)(i) In the event that the federal government does not establish an annual limitation on
cost sharing for any plan year, the annual limitation on cost sharing for self-only
coverage for that year shall be the dollar limit for self-only coverage in the preceding
calendar year, increased by any percentage by which the average per capita premium
for health insurance coverage in Vermont for the preceding calendar year exceeds the
average per capita premium for the year before that.
(ii) The annual limitation on cost sharing for other than self-only coverage for any year
in which the federal government does not establish an annual limitation on cost sharing
shall be twice the dollar limit for self-only coverage described in subdivision (i)
of this subdivision (B).
(3) Ban on annual and lifetime limits. A group insurance policy shall not establish any annual or lifetime limit on the
dollar amount of essential health benefits, as defined in Section 1302(b) of the Patient
Protection and Affordable Care Act of 2010, Pub. L. No. 111-148, as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, and applicable regulations and federal guidance, for any individual insured under
the policy, regardless of whether the services are provided in-network or out-of-network.
(4) No cost sharing for preventive services.
(A) A group insurance policy shall not impose any co-payment, coinsurance, or deductible
requirements for:
(i) preventive services that have an “A” or “B” rating in the current recommendations
of the U.S. Preventive Services Task Force;
(ii) immunizations for routine use in children, adolescents, and adults that have in effect
a recommendation from the Advisory Committee on Immunization Practices of the Centers
for Disease Control and Prevention with respect to the individual involved;
(iii) with respect to infants, children, and adolescents, evidence-informed preventive care
and screenings as set forth in comprehensive guidelines supported by the federal Health
Resources and Services Administration; and
(iv) with respect to women, to the extent not included in subdivision (i) of this subdivision
(4)(A), evidence-informed preventive care and screenings set forth in binding comprehensive
health plan coverage guidelines supported by the federal Health Resources and Services
Administration.
(B) Subdivision (A) of this subdivision (4) shall apply to a high-deductible health plan
only to the extent that it would not disqualify the plan from eligibility for a health
savings account pursuant to 26 U.S.C. § 223.
(5) Definition of “group insurance policy.” As used in this subsection, “group insurance policy” has the same meaning as “group
health plan” and shall be subject to the same excepted benefits, in each case, as
set forth in 45 C.F.R. § 146.145, as in effect as of December 31, 2017. (Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.)