BILLASINTRODUCEDANDPASSEDBYSENATE S.27
2025 Page1of6
S.27
IntroducedbySenatorsLyons,Baruth,Beck,Bongartz,Brennan,Chittenden,
Clarkson,Collamore,Cummings,Gulick,Hardy,Harrison,
Hart,Hashim,Major,Norris,Plunkett,RamHinsdale,
Vyhovsky,Watson,WestmanandWhite
ReferredtoCommitteeonHealthandWelfare
Date:January29,2025
Subject:Health;consumerprotection;creditreporting;medicaldebt
Statementofpurposeofbillasintroduced:Thisbillproposestodirectthe
StateTreasurertocontractwithanentitytoacquireandabolishcertain
medicaldebtsforVermonterswithincomesatorbelow400percentofthe
federalpovertylevelorwhoowemedicaldebtequaltofivepercentormoreof
theirhouseholdincome.Thebillwouldalsoprohibitcreditreportingagencies
fromreportingormaintaininginformationonVermonters’medicaldebtand
wouldprohibithealthcareprovidersfromreportingmedicaldebttocredit
reportingagencies.
Anactrelatingtomedicaldebtreliefandexcludingmedicaldebtfrom
creditreports
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ItisherebyenactedbytheGeneralAssemblyoftheStateofVermont:
Sec.1.STATETREASURER;MEDICALDEBTRELIEF;
APPROPRIATION
(a)Thesumof$1,000,000.00isappropriatedtotheStateTreasurerfrom
theGeneralFundinfiscalyear2026forthepurposeofcontractingwitha
nonprofitentitytoacquireandrepaycertainmedicaldebtsincurredby
Vermontresidentsassetforthinthissection.
(b)TheStateTreasurershallensurethattheentitywithwhichthe
Treasurercontractsunderthissectionwill:
(1)purchasethemedicaldebtofeligibledebtorsfromhealthcare
providersatfairmarketvalue;
(2)abolishthedebtwithnocostortaxconsequencesforthedebtor;and
(3)coordinatewiththehealthcareproviderorcollectionsagencyto
ensurethatanyadverseinformationresultingfromthemedicaldebtis
removedfromthedebtor’sconsumercreditreportfollowingthecontractor’s
purchaseandabolitionofthedebt.
(c)Inordertobeeligibleforrepaymentofmedicaldebtunderthissection,
thefollowingconditionsmustbemet:
(1)thedebtorshallbeaVermontresidentwhoeitherhasahousehold
incomethatisatorbelow400percentofthefederalpovertylevelforthe
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20 BILLASINTRODUCEDANDPASSEDBYSENATE S.27
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applicablehouseholdsizeorwhoowesmedicaldebtinanamountthatisfive
percentormoreofthedebtor’shouseholdincome;and
(2)thedebtor’spatientaccountstillmaintainsanoutstandingbalance
evenafterthehealthcareproviderhascompleteditsroutineeffortstocollect
theamountsdue.
Sec.2.2022ActsandResolvesNo.83,Sec.53(b)(5)(B),asamendedby2022
ActsandResolvesNo.185,Sec.C.102and2023ActsandResolvesNo.78,
Sec.E.1000,isfurtheramendedtoread:
(B)$20,000,000$19,000,000shallbeappropriatedtotheState
Treasurer’sOfficeandusedforredeemingStateofVermontgeneralobligation
bondspriortomaturity.
Sec.3.9V.S.A.§ 2466disaddedtoread:
§ 2466d.REPORTINGOFMEDICALDEBTINFORMATION
PROHIBITED
Acreditreportingagencyshallnotreportormaintaininthefileona
consumerinformationrelatingtoamedicaldebt,asdefinedin18V.S.A.
§ 9481.
Sec.3.9V.S.A.§ 2466disaddedtoread:
§ 2466d.REPORTINGOFMEDICALDEBTINFORMATION
PROHIBITED
(a)Acreditreportingagencyshallnotreportormaintaininthefileona
consumerinformationrelatingtoamedicaldebt.
(b)Asusedinthissection:
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(1)“Healthcareservices”meansservicesforthediagnosis,prevention,
treatment,cure,orreliefofaphysical,dental,behavioral,ormentalhealth
conditionorsubstanceusedisorder,includingcounseling,procedures,
products,devices,andmedications.
(2)“Medicaldebt”meansdebtarisingfromhealthcareservices,
includingdentalservices,orfromhealthcaregoods,includingproducts,
devices,durablemedicalequipment,andprescriptiondrugs.“Medicaldebt”
doesnotincludedebtarisingfromservicesprovidedbyaveterinarian;debt
chargedtoacreditcardunlessthecreditcardisissuedunderanopen-endor
closed-endcreditplanofferedsolelyforthepaymentofhealthcareservices;
debtchargedtoahomeequityorgeneral-purposelineofcredit;orsecured
debt.
Sec.4.9V.S.A.§ 2480bisamendedtoread:
§2480b.DISCLOSURESTOCONSUMERS
***
(c)Anytimeacreditreportingagencyisrequiredtomakeawritten
disclosuretoconsumerspursuantto15U.S.C.§1681g,itshalldisclose,inat
least12-pointtype,andinboldtypeasindicated,thefollowingnotice:
“NOTICETOVERMONTCONSUMERS
***
(2)UnderVermontlaw,noonemayaccessyourcreditreportwithout
yourpermissionexceptunderthefollowinglimitedcircumstances:
***
(F)wheretherequestforacreditreportisrelatedtoacredit
transactionenteredintopriortoJanuary1,1993;or
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(G)wheretherequestforacreditreportisbytheVermont
DepartmentofTaxesandisusedforthepurposeofcollectingorinvestigating
delinquenttaxes;or
(H)wheretherequestforacreditreportisbyanorganizationthatis
exemptfromtaxationunderSection501(c)(3)oftheInternalRevenueCode
forthepurposeofdeterminingeligibilityfortheabolitionofmedicaldebt.
***
Sec.5.9V.S.A.§ 2480gisamendedtoread:
§2480g.EXEMPTIONS
***
(e)Theprovisionsofsection2480eofthistitleshallnotapplytoan
organizationthatisexemptfromtaxationunderSection501(c)(3)ofthe
InternalRevenueCodewhendeterminingeligibilityfortheabolitionof
medicaldebt.
Sec.6.18V.S.A.chapter221,subchapter10isamendedtoread:
Subchapter10.PatientFinancialAssistanceandMedicalDebt
***
§9485.PROHIBITIONONSALEORREPORTINGOFMEDICALDEBT
(a)(1)Nolargehealthcarefacilityshallsellitsmedicaldebtexceptas
providedinsubdivision(2)ofthissubsection.
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(2)Alargehealthcarefacilitymaysellorotherwisetransferitsmedical
debttoanorganizationthatisexemptfromtaxationunderSection501(c)(3)of
theInternalRevenueCodeforthespecificpurposeofthetax-exempt
organizationabolishingthemedicaldebtofoneormorepatientsby
cancellationoftheindebtedness.
(b)Nolargehealthcarefacilityormedicaldebtcollectorshallreportor
otherwisefurnishanyportionofamedicaldebttoacreditreportingagency.
***
Sec.7.EFFECTIVEDATE
ThisactshalltakeeffectonJuly1,2025.
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