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Senate Finance orders study on effects of expanding association health plans before any expansion
Summary
Sections 3–5 of H.585 would expand association health plans when federal law permits; DFR must produce modeling and a report by Jan. 1, 2028, to assess likely impacts on enrollment and premiums across Vermont's individual and small‑group markets.
Senate Finance spent a significant portion of its March 31 walkthrough on proposed expansions to association health plans (AHPs) in H.585 and on DFR’s required study of market impacts if federal law allows broader AHP access.
Legislative presenters said the statutory changes would relax Vermont's narrower commonality‑of‑interest rules and that the practical reach of the expansion depends on federal law. Committee members were told the change would be effective Jan. 1, 2028 to give DFR time to complete a mandated analysis.
DFR staff and the commissioner explained the study will analyze scenarios showing the effects on enrollment and premiums in Vermont's individual and small‑group markets if varying shares of relatively healthier lives move from the individual market into association plans. One DFR official described model scenarios such as the top 1, 3, 5 and 10 percent healthiest migrating to an AHP and the resulting premium and morbidity impacts.
Fiscal staff warned the committee that DFR typically billbacks actuarial work to regulated entities and that the AHP study may require an appropriation because there is no regulated entity to bill. Estimates discussed for an actuarial study ranged roughly from $15,000 to $50,000 depending on scope. DFR officials indicated a limited scoped analysis could be done within existing contracts but acknowledged more extensive modeling may need funding.
Proponents said AHP expansion could give small employers another option to offer coverage; skeptics warned removing healthier groups from the individual market could worsen premiums for remaining enrollees. DFR emphasized the statutory change alone wouldn’t automatically broaden plans; a companion regulatory update and federal permissibility would be required before any market change.
What’s next: DFR will prepare the analysis and report back to committees of jurisdiction by Jan. 1, 2028 with findings to inform any later decision on expanding AHPs.
