Federal & State Regulations | Health plans - Vermont | J. J. Keller® Compliance Network

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Summary of differences between federal and state regulations

Employee health plans are generally covered under the federal jurisdiction of the Employee Retirement Income Security Act (ERISA).

Federal ERISA plans generally do not have to comply with state laws. ERISA rules preempt or block state laws that relate to ERISA plans. State insurance laws, however, do apply. State laws include the following provisions:

The plan must provide dependent coverage to parties to a civil union that is equivalent to that provided to married insureds. (§4063a)
The plan must not exclude part-time employees (those who works a minimum of at least 17½ hours per week) and must 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. (§4080)
The plan must cover clinically necessary health care services provided by a chiropractic physician licensed in this state for treatment. (§4088a)
The plan must cover routine costs for patients who participate in cancer clinical trials. (§4088b)
The plan must cover medically-necessary growth cell stimulating factor injections taken as part of a prescribed chemotherapy regimen. (§4088c)
If the plan provides coverage on an expense incurred basis, it must offer optional coverage for mental health care. (§4089)
The plan must cover treatment of a mental health condition, or alcohol/substance abuse, and must not establish any rate, term or condition that places a greater financial burden on an insured for access to treatment for a mental health condition than for access to treatment for a physical health condition. (§4089b)
The plan must cover the equipment, supplies and outpatient self-management training and education, including medical nutrition therapy, for the treatment of insulin dependent diabetes, insulin using diabetes, gestational diabetes and noninsulin using diabetes if prescribed by a health care professional. (§4089c)
If the plan provides that provides that coverage of a dependent child terminates upon attainment of the limiting age for dependent children specified in the policy, it must not limit or restrict coverage with respect to an unmarried child who is incapable of self-sustaining employment by reason of a mental or physical disability per 20 CFR Part 404, Subpart P (Social Security) and who became so incapable prior to attainment of the limiting age, and who is chiefly dependent upon the employee, member, subscriber, or policyholder for support and maintenance. (§4089d)
Plans that cover dependent children who are full-time college students beyond the age of 18 must include coverage for a dependent's medically necessary leave of absence from school for up to 24 months. Documentation and certification by the student's treating physician of the need for leave must be submitted to the insurer or, for self-insured plans, the health plan administrator. The plan may require periodic proof from the treating physician that leave continues to be medically necessary. (§4089d)
The plan must cover medical foods prescribed for medically necessary treatment for an inherited metabolic disease. (§4089e)
The plan must cover diagnosis and medically necessary treatment, including surgical and nonsurgical procedures, for a musculoskeletal disorder that affects any bone or joint in the face, neck or head and is the result of accident, trauma, congenital defect, developmental defect, or pathology. (§4089g)
The plan must cover prescription drugs purchased in Canada, and used in Canada or reimported legally, on the same benefit terms and conditions as prescription drugs purchased in this country. (§4089i)
The plan must permit a retail pharmacist to fill prescriptions in the same manner and at the same level of reimbursement as they are filled by mail order pharmacies. (§4089j)
If the plan provides coverage on an expense incurred basis, and covers family members, it must cover newly born children from the moment of birth. This coverage must include coverage of injury, sickness, necessary care and treatment of medically diagnosed congenital defect or birth abnormality, or any combination of these. (§4092)
If the plan provides hospital or medical coverage, it must offer optional coverage for home health care. (§4096)
The plan must cover outpatient contraceptive services including sterilizations, and must cover the purchase of all prescription contraceptives and prescription contraceptive devices approved by the federal Food and Drug Administration, except that a health insurance plan that does not provide coverage of prescription drugs is not required to provide coverage of prescription contraceptives and prescription contraceptive devices. (4099c)
The plan cannot deny enrollment of a child under the health plan of the child's parent ordered to provide medical support on the grounds that the child was born out of wedlock; the child is not claimed as a dependent on the parent's federal tax return; or the child does not reside with the parent or in the insurer's service area. (§4100b)
If the plan covers dependent children of participants or beneficiaries, it must cover dependent children placed with participants or beneficiaries for adoption under the same terms and conditions as apply to the natural, dependent children of the participants and beneficiaries, irrespective of whether the adoption has become final. (§4100c)
The plan may not discriminate on the basis of medical information, including the results of genetic testing. (§4724)
The plan may not discriminate between married couples and parties to a civil union. (§4724)
Effective 10/1/09, insurers must cover colorectal cancer screenings, including annual fecal occult blood testing plus one flexible sigmoidoscopy every five years; or one colonoscopy every 10 years. For those at high risk, such screenings include those recommended by the physician. (§4100g) See also HB 24.
Effective 4/1/2010, insurers that provides coverage for cancer chemotherapy treatment must provide coverage for prescribed, orally administered anticancer medications used to kill or slow the growth of cancerous cells that is no less favorable on a financial basis than intravenously administered or injected anticancer medications covered under the insured's plan. (§4100h)
Effective 10/1/2011, plans that provide maternity benefits must also cover services rendered by a licensed midwife or a licensed advanced practice registered nurse who is certified as a nurse midwife. Coverage for services provided by a licensed midwife or certified nurse midwife must not be subject to any greater co-payment, deductible, or coinsurance than is applicable to any other similar benefits provided by the plan. (§4099(d)). See also SB 15.

Employers that don’t offer health coverage or have uninsured employees, may have to pay a health care contribution, or “assessment” based on the number of uninsured workers.

Employers not offering coverage and/or paying a portion of the coverage:

If an employer doesn’t offer a plan and/or pay a portion of a plan that pays part of the cost of heath insurance for its employees, they must pay the health care assessment on all employees.

If an employer does offer health coverage, they must pay the assessment on:

Employees who are ineligible to participate in the employer’s plan.
If they offer insurance to all full-time employees, they do not have to pay the assessment on seasonal or part-time employees provided such employees meet a certain criteria (refer to Vermont Department of Labor Web site for further details).
Employees who refuse the employer’s coverage and do not have coverage from another source.

The amount the employer must pay is based on the number of full-time equivalents (based on a 40-hour work week) who are in the above categories. The current assessment is $91.25 every three months for each full-time equivalent (equal to $365 per year). Employers could exempt up to eight full-time equivalents through quarter ending June 30, 2008. The exemption reduced to 6 beginning July 1, 2008 and will reduce again to 4 beginning July 1, 2009.

Please note that an employer's payment into the assessment fund does not automatically enroll their employees into Green Mountain Care programs. Employees must apply and meet the eligibility criteria to enroll.

Single-payer system

With the signing of H 202 at the end of May 2011, Vermont will have a plan for creating a single-payer and unified health system. No later than November 1, 2013, the Vermont health benefit exchange is to begin enrolling individuals and small employers for coverage beginning January 1, 2014. Large employers may begin enrolling for coverage no later than November 1, 2016 for coverage beginning January 1, 2017. The state exchange is to provide qualified employers with qualified health benefit plans including the multistate plans required by the Affordable Care Act, with effective dates beginning on or before January 1, 2014.

Employers will be required to provide employees with an annual statement including the total monthly premium cost paid for the plan, the employer's share and the employee's share of the total monthly premium, and any amount the employer contributes toward the employee's cost-sharing requirement or other out-of-pocket expenses.