If you buy health insurance on the individual market, without help from an employer, you may want to know what Vermont is doing to protect you from unfair and unnecessary premium rate increases.  Here’s a summary of the Vermont laws that govern rate increases. 

  • Vermont requires insurers and HMOs to file rates, and the state has “prior approval” authority to approve or reject the rates before they go into effect.
  • The Insurance Commissioner may not grant a rate increase of more than 20% in any given year for a non-group (i.e. individual) policy, unless this 20% limitation would “have a substantial adverse effect on the financial safety and soundness” of the insurer.  8 V.S.A. § 4080b.
  • If the 20% limit prevents implementation of community rating, “the commissioner may permit insurers to correspondingly limit community rating provisions from applying to individuals who would otherwise be entitled to rate reductions.”  8 V.S.A. § 4080b.
  • The Commissioner must disapprove a rate increase if the anticipated loss ratios for the period for which rates are computed are less than 70%.  8 V.S.A. § 4080b.
  • No rate may be used until 30 days after it has been filed with the Commissioner, unless the Commissioner approves the rate sooner.  If the Commissioner does not disapprove a rate within 30 days, it is deemed approved.  If the Commissioner disapproves a rate, or withdraws approval, “a hearing will be granted within 20 days upon written request of the insurer.”  8 V.S.A. § 4062.