With the enactment of H 35 on February 19, 2025, Vermont permanently separated its individual and small group health insurance markets. The state had required health insurance carriers to merge the two markets and their underlying risk pools following the passage of the federal ACA. However, the state began allowing the separation of the two markets on a temporary basis in 2022. Effective January 1, 2026, insurance carriers in Vermont shall determine the premiums for individual market plans separately from the premiums for their small group market plans.
While this legislation is directed at insurance carriers, businesses that employed an average of not more than 100 employees on working days during the preceding calendar year are eligible to purchase small group health insurance in Vermont. These employers should take note of the permanent separation of the small group market from individual coverage, due to the potential impact on premium rates.