Vermont Individual Mandate

 

Effective since 2020, Vermont imposes a state individual mandate that requires individuals in Vermont to maintain acceptable health coverage. The Vermont law largely mirrors the federal individual mandate requirement under the Affordable Care Act (ACA) that was effectively eliminatedin 2019. However, there is currently no financial penalty for failing to maintain coverage under the Vermont law.

 

OVERVIEW

 

Vermont’s individual mandate requires most individuals in the state (and their family members) to be covered under minimum essential coverage for each month of the year. As originally written, the law stated that the legislature intended to establish a financial penalty or other enforcement mechanism. However, the Vermont legislature subsequently amended the law to eliminate sections related to enforcement. As a result, individuals in Vermont will not be penalized for failing to maintain acceptable health coverage.

 

MINIMUM ESSENTIAL COVERAGE

 

For purposes of the Vermont individual mandate, minimum essential coverage (MEC) has the same definition as under the ACA. MEC includes coverage under:

 

 

MEC in Vermont also includes any other coverage deemed by the Vermont Department of Financial Regulation to constitute MEC.

 

AFFECTED INDIVIDUALS

 

The requirement to maintain MEC applies to individuals of all ages (including children), unless that individual falls within a specific exception or is exempt. The following categories of individuals are exempt:

 

 

REPORTING REQUIREMENTS

 

To help administer the individual mandate, Vermont law requires individuals to indicate on their state income tax return whether they had MEC for each month of the year. In addition, if requested by the Vermont Department of Taxes, individuals will be required to submit a copy of the individual statement furnished to them by the provider of the MEC under the ACA’s federal reporting requirement under Internal Revenue Code Section 6055.

Notably, Vermont law provides that the state will impose its own provider reporting requirement similar to the federal Code Section 6055 reporting requirement in the event that the federal requirement is suspended or eliminated for any taxable year.