Two Vermont lawmakers have introduced House Bill 585, a legislative proposal designed to address health coverage costs and expand affordable options for state residents. The bill, sponsored by Rep. Patricia McCoy of Poultney and Rep. Francis “Topper” McFaun of Barre Town, seeks to implement reforms that supporters say will benefit both consumers and small businesses.
Affordable health coverage has long been a primary concern for small business owners in Vermont. According to data analyzed by Take Command, the proportion of small businesses in Vermont offering health coverage dropped by 21.5% from 2009 to 2023, representing the third largest decline among all states. Currently, only about one quarter of small businesses in Vermont provide health insurance to employees, the lowest rate in the Northeast.
The National Federation of Independent Business (NFIB), which represents hundreds of thousands of member businesses across various industries and advocates for small and independent business owners at both federal and state levels (https://www.nfib.com/), has previously outlined challenges faced by small employers regarding health coverage costs. The organization operates as a nonprofit, nonpartisan entity focused on small business advocacy and uses a one-member, one-vote system to determine its policy positions (https://www.nfib.com/).
Large employers often self-insure their employee health plans under federal law, which exempts them from certain regulations that apply to smaller firms. In contrast, Vermont’s restrictions on stop loss insurance make self-insuring less accessible for small businesses compared to most other states.
House Bill 585 aims to reverse some previous state policies that limited affordable options for small businesses. One key provision would lift restrictions on Association Health Plans (AHPs), allowing multiple small employers to pool together for better purchasing power and lower costs. The bill also proposes reforms to stop loss regulations in an effort to make AHPs more viable.
Another section addresses short-term health plans, which are currently limited in Vermont due to strict duration caps. H.585 would permit these plans for up to 12 months—including renewals—aligning with prior federal regulations and practices seen in many other states.
The legislation also calls for the creation of an individual market reinsurance program similar to those implemented in Minnesota and New Hampshire. These programs have been credited with reducing premiums and stabilizing enrollment in their respective states’ individual markets.
In addition, H.585 proposes modest changes to how insurance rates can vary based on age within the community rating system—allowing premiums to differ by up to 5% above or below the standard rate.
“With much of Vermont’s health coverage and healthcare systems on the brink, it is imperative that lawmakers from all parties look outside of rigid ideological boxes for fixes,” according to supporters of the bill.
If enacted, proponents argue H.585 could restore more affordable coverage options such as Association Health Plans and Short-Term Health Plans while reducing individual market premiums through reinsurance measures.
The NFIB continues its role as an advocate for policies affecting small businesses nationwide—including taxes, regulations, HR guidance, partnerships—and maintains its headquarters in Washington D.C., extending advocacy efforts across all 50 states (https://www.nfib.com/). Brad Close serves as president and chief executive officer (https://www.nfib.com/).
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