DFR tells committee health care sharing plans are not insurance as members consider H102 reporting requirement

Mary Block, deputy commissioner of insurance at the Department of Financial Regulation (DFR), told a legislative committee that "health care sharing plans are not regulated by DFR. They are not insurance." The committee was meeting to revisit provisions of H585 and to hear information about H102, a proposal to require reporting by health care sharing plans.

Block described sharing plans as "member driven" and often faith-based, noting membership can require a statement of faith and commitments to live according to an organization's tenets. She said the plans are "not ACA compliant," can include exclusions for preexisting conditions and services that conflict with a group's religious tenets, and typically target healthier individuals seeking basic preventive care and protection against catastrophic events.

Committee members asked practical questions about consumer-facing practices. Block said some plans issue membership cards but that formal network agreements with PPOs are unlikely. On complaints and enforcement, she said DFR sometimes receives inquiries and will "refer complaints to the AG's office" when issues fall outside insurance regulation; DFR can act only when a sharing plan "steps over the line" and begins representing itself as insurance. Block noted that DFR issued a cease-and-desist in 2019 and is now reviewing a recent New York Department of Insurance sanction because the sanctioned organization does business in multiple states.

The deputy commissioner also told the committee DFR lacks reliable information on how many Vermonters participate in sharing plans. "We have no real idea," she said, but added that Colorado's reporting shows 14 plans identifying activity in Vermont. Block and members discussed the limits of a reporting requirement: while it would give regulators more visibility, it also raises constitutional questions about freedom of religion and speech. She said Colorado's reporting law has been sued in federal court; a preliminary injunction request was denied but the litigation continues.

Members raised consumer-protection concerns. One committee member described a scenario in which a hospital forgives a patient's debt while a sharing plan later pays the individual member, who could then retain the payment; Block acknowledged she could not rule out that possibility given current oversight gaps. On whether members have recourse if a sharing plan denies payment, Block said that remedies are not available through DFR for non-insurance entities and that aggrieved consumers would likely need to pursue the Attorney General's office or other civil avenues.

Lawmakers and staff framed H102 as a reporting-based approach modeled on Colorado's law. Block said reporting improves "line of sight" because organizations that comply with reporting are visible to regulators, but she warned that the least compliant organizations may never report. The committee closed the session after thanking Block for the briefing and scheduling its next meeting.

The committee did not take formal votes on H102 or related reporting requirements during the session.