Vermont Regulators Looking Out For Consumers Who Opt For 'Association Health Plans'

Jul 5, 2018

Vermont health regulators are keeping a close watch on some new federal health care policies to make sure that Vermont consumers don't get ripped off by the plans.

The Vermont Department of Financial Regulation is now in the process of considering emergency rules to oversee a big change in the way special federal health insurance plans operate in Vermont.

DFR Commissioner Michael Pieciak said the Trump administration has made it easier for so-called "association health plans" to be offered in every state. These are plans where small businesses are able to join together and enjoy some of the benefits that are available to larger employers.

Pieciak said his department needs to ensure that there are strong consumer protections with these new health insurance groups.

"In other states we've seen examples of plans being offered to consumers that were deceptive — either they were outright frauds or they were deceptive in terms of the coverages that were provided and what the consumer was actually receiving," Pieciak said. "So we want make sure that there's clear disclosure, that there's registration with our department."

And Pieciak said it's critical for these new insurance groups to demonstrate that they have a strong financial base.

"So 'solvency' is basically when a company no longer can pay claims because it has run out of money, and this has been another issue that other states have experienced with association health plans," Pieciak explained. "So we want to make sure the plans that are self-funded are well-capitalized, so that Vermonters are protected and that their insurance claims are being paid."

Pieciak said another major issue that needs to be discussed is whether these new plans have to conform to Vermont's health care mandates — he thinks the answer is yes.

"Certainly one of the discussions that we're having is 'what are the coverages that we're going to require association health plans to have?'" Pieciak said. "Obviously state mandates probably should be included. Ten essential health benefits, those should probably be included. But that will be part of the discussion that we have with constituents and stakeholders."

Michael Fisher, Vermont's chief health care advocate, said consumers who sign up for these plans need to read the fine print of their coverage to be certain that they are getting the services they think that they are getting.

"There's nothing as frustrating as feeling like ... you purchased some protection for yourself and then you find when you need the care it's just not available to you or the costs are out of range," Fisher said.

The Department of Financial Regulation hopes to have their new emergency rules in place by the end of the month so the new association health plans can begin operating in Vermont by the beginning of October.