Committee advances health‑insurance reforms adding site‑neutral payments and new reporting

The Senate Health and Welfare Committee advanced H585 (revision 3.2), a health‑insurance reform bill that would expand site‑neutral reimbursement rules, require state reporting on association health plans, and study plan‑design flexibility for prescription‑drug cost sharing.

Jen Harvey of the Office of Legislative Counsel told the committee the draft adds a requirement that, by 01/15/2027, the Department of Financial Regulation (DFR) report on federal law and projected impacts of expanding access to association health plans beginning 01/01/2028 and the likely effects on enrollment and premiums. "On or before 01/15/2027, DFR would report to this committee and Senate Health and Welfare and Senate Finance the following information related to expanding access to association health plans beginning on 01/01/2028," she said.

The draft also expands site‑neutral reimbursement rules to include occupational therapy and athletic training in addition to physical therapy, directing insurers to express reimbursement amounts as a percentage of Medicare rates and requiring uniform reimbursement amounts across plans except for certain inpatient differences.

Harvey said the bill removes an earlier section that would have eliminated prescription‑drug‑specific out‑of‑pocket maximums and replaces it with language directing the Department of Vermont Health Access and DFR to analyze the feasibility and premium impacts of allowing plan designs that omit prescription‑drug out‑of‑pocket limits so long as insurers also offer plans that retain those limits. She said insurers required to make site‑neutral reimbursements would report back by 03/01/2027 on implementation and any financial impacts.

Members pressed staff on effective dates and contracting implications for hospitals and insurers. One member observed, "Most contracts with insurers start January 1," and asked whether applying site‑neutral requirements to provider contracts entered into, amended, renewed, or taking effect on or after 10/01/2026 might disrupt existing agreements. Committee members and counsel discussed alternative language tying the rule to services delivered on or after the effective date versus contracting dates and asked staff to refine the drafting.

After final checks, the committee voted on revision 3.2 of H585 and completed a roll call. The transcript records recorded yes and no votes for multiple members and the committee designated reporters; the motion to proceed with the revision carried in committee.