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Implementation of Vermont Act 91 with Respect to Health Insurance: Civil Unions Mandatory Endorsement and Related Issues for Insurers

Bulletin
Thursday, December 21, 2000
Health Care Bulletin #110

HCA Bulletin 110

December 21, 2000

Implementation of Vermont Act 91 with Respect to Health Insurance:

Civil Unions Mandatory Endorsement and Related Issues for Insurers

Effective January 1, 2001, all policies and contracts must be in compliance with Act 91 of the 2000 Legislative Session, Vermont=s new AAct Relating to Civil Unions.@ An unofficial version of the full text of the Act is available at the web site of the Vermont State Legislature, at http://www.leg.state.vt.us/docs/2000/acts/ACT091.HTM. A review of the language of the Act should be helpful as insurers encounter specific issues and questions.

Section 17 of the Act requires that insurance contracts and policies offered to married couples, spouses and families also be made available to civil union couples, parties to the civil union and their families. Section 18 of the Act requires that health insurers offer dependent coverage to parties to a civil union and their families. Dependent coverage is defined as family coverage or two-person coverage. Act 91 requires that the Commissioner adopt rules necessary to carry out the purposes of the law. On December 6, 2000, the Department adopted regulation No. 2000-01-IH relating to civil unions that will take effect January 1, 2001. A copy of the regulation is available at the Department’s website at http://bishca.state.vt.us.

This new law authorizes the Commissioner to adopt, by Order, standards and a process to bring currently approved forms into compliance with Vermont law. The Commissioner will issue an Order (a draft of the Order is attached), effective January 1, 2001 requiring all health insurers to adopt the Vermont Mandatory Civil Unions Endorsement or file, for approval, an alternative endorsement that complies with Act 91, for all policies, contracts, certificates, riders and endorsements subject to regulation by the Commissioner. Insurers are responsible for ensuring that the endorsement attached to policies and contracts has been approved by the Department and is compatible with those forms.

Unless it is otherwise determined that specific forms need to be amended and filed for approval, insurers adopting the Vermont Mandatory Civil Unions Endorsement (the endorsement attached is the final version adopted by the Department) need not make form changes or submit a form filing specific to Act 91. If insurers choose to make specific form changes, these must be filed for approval.

An approved endorsement must be attached to all policies, contracts, certificates, riders and endorsements offered, issued, renewed or delivered in the state of Vermont. Insurers are allowed to include these endorsements with their renewals in 2001. For all contracts and policies that do not contain a renewal date, the contract or policy must be endorsed on the first anniversary of the policy effective date that occurs in 2001. For example, a contract or policy with an effective date of March 1, 1998 must be endorsed by March 1, 2001. If an insured requests that their policy be amended to comply with Act 91, the insurer shall promptly endorse or amend the contract using a form approved by the Department. Effective January 1, 2001, all health insurance policies and contracts shall be interpreted to provide equivalent benefits for married couples and civil union couples, and their families, whether or not they have been physically endorsed or amended at the time a claim is made.

The insurance provisions of Act 91 apply to insurers. Under federal law, the Employee Retirement Income Security Act of 1974 (ERISA), private employers determine eligibility for

enrollment in fully insured or self funded employee welfare benefit plans. Because of ERISA, Act 91 does not state requirements pertaining to a private employer’s enrollment of a party to a

civil union in an ERISA employee welfare benefit plan. However, governmental employers (not federal government) are not subject to ERISA and, therefore, are required to provide health benefits to the dependents of a party to a civil union if the public employer provides health benefits to the dependents of married persons.

Private employers should be directed to consult their own counsel for specific advice in establishing eligibility requirements for their ERISA health benefit plans. Insurers are not obligated to provide group coverage to a dependent of a party to a civil union if the private employer has declined to enroll that dependent even where the private employer provides benefits to the dependents of married persons.

The Department, in cooperation with the Vermont Department of Taxes, is preparing a AFrequently Asked Questions@ publication for parties to civil unions.

Department Contact Information: Paula DiStabile, Esq., Division Health Care Administration, (802) 828-2900