Health Insurance Coverage for Part-Time Employees

STATE OF VERMONT DEPARTMENT OF FINANCIAL REGULATION 89 Main Street Montpelier, VT 05620-3101 For consumer assistance: [Banking] 888-568-4547 [Insurance] 800-964- 1784 [Securities] 877-550-3907 dfr.vermont.gov Insurance Bulletin #196 (revised) Health Insurance Coverage for Part-Time Employees January 8, 2026 [Revised: 2026 - Updated statutory references. Substantive requirements unchanged.] The purpose of this Bulletin is to provide clarification on the statutory interpretation of 8 V.S.A. §§ 4042(a)(4) (formerly § 4080(5)), 4514a (hospital service corporations), and 4594 (medical service corporations), which address group health insurance coverage offered to part-time employees. It has been brought to the Department’s attention that some insurers have questions related to application of the statutes. In response, the Department is issuing a revised interpretation based on an in-depth review of the legislative history and intent. Sections 4042(b)(4) (formerly § 4080(5)), 4514a, and 4594 were originally enacted in Act No. 34 of 1989. The Act’s legislative history indicates that the purpose of the law was to require insurers to offer employers the option to cover part-time employees. The decision of whether to cover part-time employees under the employer’s group health plan was then left to the employer. The statutory provisions allow the rate for part-time employees to be set at the same rate as full-time employees, and the employer to decide the cost sharing arrangement for covered part-time employees. The employer can require part-time employees to pay the full cost of coverage, even if the employer shares a portion of the premium expense for full-time employees. Therefore, health insurers, nonprofit hospital service corporations, and nonprofit medical service corporations should offer employers the option to cover all part-time employees working 17.5 hours or more. Health insurers should review this bulletin to ensure compliance. Questions regarding this Bulletin may be emailed to DFR Director of Health Insurance Regulation Sebastian Arduengo. Kaj Samsom, Commissioner Date Docusign Envelope ID: 739C5087-D31D-4197-A5C1-7B5193070944 1/8/2026 DFR Insurance Bulletin #196-Rev Page 2 of 2 Exhibit A Bulletin Version History Version Date Description 1 October 16, 2017 Initial Bulletin Issued 2 January 8, 2026 Updated statutory references. Substantive requirements unchanged. Docusign Envelope ID: 739C5087-D31D-4197-A5C1-7B5193070944