In March, NFIB Vermont submitted comments to the Vermont Department of Financial Regulation (DFR) asking the state to reduce barriers to affordable, quality health coverage options for small business owners.

>>>>> Read NFIB Vermont’s comments HERE. <<<<<

Since 2016, Vermont has imposed severe restrictions on the ability of small businesses to self-insure for health coverage. Self-insurance is an attractive option for some businesses because it offers greater flexibility to control costs and design plans that work for employees. Self-insurance is the most common form of coverage among large employers.

Typically, small businesses who self-insure for health coverage purchase stop loss insurance. Small employers cover the cost of claims up to a certain dollar threshold, above which the stop loss policy kicks in and the insurer covers additional claim amounts.

Most states have no minimum amount that a small employer must cover before the stop loss policy takes over or follow a longstanding national model for these thresholds.

Since 2016, Vermont has deviated from the national model and required small businesses to carry much higher levels of risk compared to their counterparts in other states. Vermont’s rules also require small employers to cover far more in claims than larger businesses in Vermont.

These levels are unnecessarily high and take the option of self-insuring off the table for many small employers. The rules also may make the policies more lucrative for large insurance companies by shifting more risk onto small employers, reducing the number of claims a stop loss insurer will have to cover.

DFR is in the process of a periodic reevaluation of the state’s stop loss insurance rules. NFIB Vermont opposes any increase in the dollar level at which stop loss insurance can take effect and recommends that Vermont:

1) returns to the national standards for stop loss insurance, and

2) equalizes the stop loss thresholds for small and large groups, as Minnesota and Rhode Island have done.

We will continue to monitor the rulemaking process and update members.