The national Group Health Insurance guide covers how group plans work: eligibility, the master contract and certificates, federal COBRA, HIPAA portability and coordination of benefits. This guide covers the Vermont rules: state continuation, the extension of benefits when a group policy terminates, termination notice to the group, and the small-employer market.

State continuation (8 V.S.A. §§ 4047a to 4047c)

Vermont's continuation law is separate from federal COBRA.

• Which benefits: it applies only to major medical and dental coverage (§ 4047a(d)).
• Qualifying events (§ 4047a(b)):
  • loss of employment
  • reduced hours
  • divorce
  • loss of dependent status
• Not eligible: a person whose job ended because of misconduct (§ 4047a(c)(4)).
• Notice and election (§ 4047b(a)):
  • The employer notifies the person within 30 days of the event.
  • The person elects in writing within 60 days after receiving notice and pays the first contribution through the end of the election month.
• Cost: contributions are due monthly in advance and can't be more than 102% of the group rate (§ 4047b(b)).
• How long: coverage lasts up to 18 months after it would have ended. It ends earlier for nonpayment, Medicare entitlement, other group coverage or termination of the group plan (§ 4047c(1)).

Extension of benefits (8 V.S.A. § 4048d)

When a group policy terminates, a covered person who is totally disabled on that date gets an extension of benefits of at least:

• 12 months under major medical coverage
• 90 days under other hospital or medical expense coverage

Dental isn't included.

Termination for nonpayment (8 V.S.A. § 4048b)

• The insurer gives the group policyholder 21 days' advance notice of the premium due.
• Termination for nonpayment can't take effect before midnight at the end of the 14th day after the termination notice is mailed.

Small employers (33 V.S.A. § 1811)

• A small employer averaged no more than 100 employees in the past calendar year.
• Small-group plans are community rated and guaranteed issue.
• Insurers may not pay agents commissions on these plans (8 V.S.A. § 4022). See the Vermont Medical Plans guide.

Blanket health insurance (8 V.S.A. § 4052)

Blanket health insurance covers special groups of people under one policy. It is supplemental to major medical coverage or pays benefits other than health care costs. Examples include a policy issued to a common carrier covering all its passengers, and policies covering students or volunteer groups.

Common exam traps

• Vermont continuation covers major medical and dental only.
• Vermont continuation lasts 18 months and costs up to 102%.
• The election window is 60 days after notice. The employer's notice is due within 30 days of the event.
• Losing a job for misconduct means no continuation. Reduced hours, divorce and loss of dependent status all qualify.
• When a group policy terminates, a totally disabled person gets an extension of 12 months under major medical or 90 days under other medical coverage.