BILL AS INTRODUCED S.43
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VT LEG #379227 v.1
S.43 1
Introduced by Senators White, Chittenden, Clarkson, Gulick, Vyhovsky and 2
Watson 3
Referred to Committee on 4
Date: 5
Subject: Health; health insurance; State employees’ health plan; school 6
employees; reference-based pricing 7
Statement of purpose of bill as introduced: This bill proposes to direct the 8
Department of Human Resources to implement a reference-based pricing 9
program in the State employees’ health plan for inpatient and outpatient 10
hospital services at certain hospitals beginning in 2026. It would also limit the 11
allowable growth rate of premiums in the State employees’ health plan to not 12
more than medical inflation and would allow school employers to join the plan 13
for coverage of their employees. 14
An act relating to reference-based pricing and cost-containment in the State 15
employees’ health plan 16 BILL AS INTRODUCED S.43
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VT LEG #379227 v.1
It is hereby enacted by the General Assembly of the State of Vermont: 1
Sec. 1. 3 V.S.A. § 631 is amended to read: 2
§ 631. GROUP INSURANCE FOR STATE EMPLOYEES; SALARY 3
DEDUCTIONS FOR INSURANCE, SAVINGS PLANS, AND 4
CREDIT UNIONS 5
(a)(1) The Secretary of Administration may contract on behalf of the State 6
with any insurance company or nonprofit association doing business in this 7
State to secure the benefits of franchise or group insurance. The terms of 8
coverage under the policy shall be determined under section 904 of this title, 9
but it may include: 10
(A) life, disability, health, and accident insurance and benefits for 11
any class or classes of State employees; and 12
(B) hospital, surgical, and medical benefits for any class or classes of 13
State employees or for those employees and any class or classes of their 14
dependents. 15
(2)(A)(i) As used in this section, the term “employees” includes any 16
class or classes of elected or appointed officials, State’s Attorneys, sheriffs, 17
employees of State’s Attorneys’ offices whose compensation is administered 18
through the State of Vermont payroll system, except contractual and temporary 19
employees, and deputy sheriffs paid by the State of Vermont pursuant to 24 20
V.S.A. § 290(b). The term “employees” shall does not include members of the 21 BILL AS INTRODUCED S.43
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VT LEG #379227 v.1
General Assembly as such, any person rendering service on a retainer or fee 1
basis, members of boards or commissions, or persons other than employees of 2
the Vermont Historical Society, the Vermont Film Corporation, the Vermont 3
State Employees’ Credit Union, Vermont State Employees’ Association, and 4
the Vermont Council on the Arts, whose compensation for service is not paid 5
from the State Treasury, or any elected or appointed official unless the official 6
is actively engaged in and devoting substantially full-time to the conduct of the 7
business of the official’s public office. 8
* * * 9
(iv) For purposes of group hospital-surgical-medical expense 10
insurance only, the term “employees” may include school employees at the 11
option of a school employer, as those terms are defined in 16 V.S.A. § 2101. 12
* * * 13
(b)(1) For group hospital-surgical-medical expense insurance, the Secretary 14
of Administration shall: 15
(A) ensure utilization of a reference-based pricing program for 16
inpatient and outpatient hospital services at hospitals other than critical access 17
hospitals; and 18
(B) limit the annual rate of premium growth to not more than the 19
percentage change from the previous year in the Consumer Price Index for 20
medical care in the Northeast region. 21 BILL AS INTRODUCED S.43
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VT LEG #379227 v.1
(2) On or before March 15 annually, the Secretary shall report to the 1
General Assembly on the effect of the reference-based pricing program on the 2
cost of the group hospital-surgical-medical expense insurance for State 3
employees. 4
Sec. 2. EFFECTIVE DATE 5
This act shall take effect on January 1, 2026, with the first required report 6
under 3 V.S.A. § 631(b)(2) due on or before March 15, 2027. 7