Code of Vermont Rules › Agency 21 - DEPARTMENT OF FINANCIAL REGULATION › Sub-Agency 020 - INSURANCE DIVISION › Chapter 072 - RULE I-2018-03 SHORT-TERM, LIMITED-DURATION HEALTH INSURANCE › Section 21 020 072 - RULE I-2018-03 SHORT-TERM, LIMITED-DURATION HEALTH INSURANCE

Current through
				June, 2024
Section 1
				Purpose
This rule is promulgated pursuant to
				  8 V.S.A. §
											4084a and in response to the publication on
				  August 3, 2018 by the United States Department of Labor, the Department of
				  Health and Human Services, and the Department of the Treasury of a final rule
				  (the "Final Rule") amending the definition of short-term, limited-duration
				  insurance found in 26 C.F.R. pt. 54, 29 C.F.R. pt 2590, and 45 C.F.R. pts. 144,
				  146, and 148. See Short-Term, Limited-Duration Insurance, 83 Fed. Reg. 38,212
				  (August 3, 2018) (to be codified at 26 C.F.R. pt. 54, 29 C.F.R. pt. 2590, and
				  45 C.F.R. pts. 144, 146, and 148). The Final Rule lengthens the maximum
				  duration of short-term, limited-duration insurance from less than three months
				  after the effective date of the contract to up to twelve months after the
				  contract date. It also provides that short-term, limited-duration policies may
				  be renewed or extended to a maximum duration of up to thirty-six months after
				  the initial contract date. The preamble to the Final Rule makes clear that
				  states are free to adopt more restrictive definitions and rules governing
				  short-term, limited-duration health insurance to meet the specific needs of
				  their health insurance markets.
Short-term, limited-duration health insurance is a type of
				  health insurance coverage that is designed to fill temporary coverage gaps that
				  may occur when an individual is transitioning from one plan or coverage to
				  another plan or coverage. It is not intended to function as comprehensive
				  health care coverage. Short-term, limited-duration health insurance is not
				  considered Minimum Essential Coverage ("MEC") under the Affordable Care Act
				  ("ACA") and is not required under federal law to provide essential health
				  benefits or to cover preexisting conditions. Short-term, limited-duration
				  health insurance is not subject to the ACA's requirements of guaranteed
				  availability and guaranteed renewability and may, in contrast to ACA-compliant
				  health coverage, contain annual and lifetime dollar limits.
The purpose of this rule is to set forth rules and procedures
				  governing the filing, sale, marketing, and issuance of short-term,
				  limited-duration health insurance in Vermont. This rule protects Vermont
				  consumers by ensuring that short-term, limited-duration health insurance
				  provides robust benefits and clear disclosure of its limitations compared to
				  ACA-compliant health care policies and other types of MEC. It promotes the
				  stability of Vermont's health insurance markets, including Vermont Health
				  Connect, by ensuring that short-term, limited-duration health insurance is sold
				  only to bridge temporary gaps in coverage and not as comprehensive health care
				  coverage. Pursuant to
				  8 V.S.A. §
											4084a, Vermont limits short-term,
				  limited-duration health insurance to a three-month term and precludes renewal
				  within a 12-month period. Nothing in this rule shall be construed to allow a
				  short-term, limited-duration health insurance policy to be sold in Vermont
				  prior to the effective date hereof.
Section 2 Definitions
The following terms are defined for purposes of this rule as
				  follows:
A. "Short-term,
				limited-duration insurance" means individual health insurance that provides
				medical, hospital, or major medical expense benefits coverage pursuant to a
				policy or contract with an insurer and that has an expiration date specified in
				the policy or contract that is three months or less after the original
				effective date of the policy or contract.
B. "Commissioner" means the Commissioner of
				the Vermont Department of Financial Regulation.
C. "Department" means the Vermont Department
				of Financial Regulation.
D.
				"Insurer" means any insurer, nonprofit hospital or medical service corporation,
				health maintenance organization, or managed care organization offering health
				insurance as defined in
				8 V.S.A. §
											3301(a)(2).