The Vermont Statutes Online
Banking and Insurance
GROUP HEALTH INSURANCE TERMINATION AND REPLACEMENT
4091c. Termination for nonpayment of premium or subscription charges
(a) If a group
health insurance policy or subscriber contract provides for automatic
termination of the policy or contract after a premium or subscription charge
has remained unpaid through the grace period allowed for such payment, the
carrier shall be liable for valid claims for covered losses incurred prior to
the end of the grace period.
(b) If the
actions of the carrier after the end of the grace period indicate that it
considers the policy or contract to be continuing in force beyond the end of
the grace period, including actions such as continuing to recognize claims
subsequently incurred, or in some other manner, the carrier shall be liable for
valid claims for losses incurred prior to the effective date of written notice
of termination to the policyholder or other entity responsible for making
payments or submitting subscription charges to the carrier.
(c) The carrier
shall notify a policyholder or other responsible entity of any premium payment
due on a policy at least 21 days before the due date. The effective date of
termination of a policy or contract shall not be prior to midnight at the end
of the 14th day following mailing of notice of termination. (Added 1989, No.
113, § 2; amended 1997, No. 112 (Adj. Sess.), § 2.)