Vermont witnesses urge data, guardrails as committee considers expanding association health plans in H.585

At a legislative committee hearing on H.585, business, nonprofit and consumer witnesses outlined competing views of a proposal to expand access to association health plans (AHPs), saying AHPs could make coverage affordable for some employers while also risking destabilization of Vermont’s individual and small-group markets.

Chelsea Bardo Lewis, Executive Director of Vermont Businesses for Social Responsibility, told the committee her members — which she said employ about 43% of the state’s workforce — are facing sharp premium spikes and that many small employers and solopreneurs are being priced out. “Their premiums are going from $400 a month to $1,600 a month,” Lewis said, illustrating how rapid increases are pushing some families to forgo coverage.

The nonprofit sector offered a cautious endorsement. Emma Paradise of Common Good Vermont, which represents nonprofit organizations statewide, said AHPs could “provide much needed relief” for nonprofits if clear guardrails are in place, including disclosure requirements and “annual reporting on AHP enrollment, premiums, and benefit design.” Her organization’s survey showed 94% of participating nonprofits reported premium increases in 2024, she said.

Business advocates framed AHPs as one tool among many. Megan Sullivan, vice president of government affairs for the Vermont Chamber of Commerce, said AHPs are not a silver bullet but could help retain workers and keep businesses in Vermont, especially in hospitality and border communities. She asked the committee to engage carriers on plan design and to consider incentives for lower‑cost provider use.

Department of Financial Regulation staff sought to clarify oversight. Mary Black said AHP rates are reviewed by the Green Mountain Care Board while DFR reviews forms and policies, noting that “it doesn’t take them completely out of our regulatory control. It just takes them out of the exchange.”

Several witnesses and committee members pressed for empirical evidence. Health care advocate Mike Fisher summarized historical data and rate‑review findings and warned of adverse selection: when healthier groups leave the Qualified Health Plan (QHP) market for alternatives such as AHPs or self‑insurance, remaining pools can become costlier. “This proposal shifts costs from younger people to older people,” Fisher said, adding that a small number of departures can have outsized effects on premiums.

Panelists debated trade‑offs and other policy levers: changing age‑rating rules, revisiting benchmark benefit design, reference‑based pricing to create preferred buying groups, and whether re‑establishing state programs like Catamount Health could be an option. Multiple participants said actuaries provide ranges rather than certainty and urged the committee to assemble multi‑source data, including provider perspectives and stop‑loss rule impacts, before advancing policy.

No formal vote was taken. Committee members and agency staff signaled they would pursue additional analysis and cross‑agency data work to better quantify likely effects on enrollment, premiums and market stability before considering statutory changes.

The committee’s next steps included requests for more robust modeling and the possibility of convening carriers, regulators and affected sectors to design reporting and consumer‑protection requirements if the committee chooses to pursue an AHP expansion.