8 V.S.A. § 4021 – Termination of coverage

(a) (1) A major medical insurance policy issued by a health insurer that insures employees, members, or subscribers for hospital and medical insurance on an expense-incurred, service, or prepaid basis shall:
1. (A) provide notice to the policyholder or other responsible party of any premium payment due on a policy at least 21 days before the due date; and
2. (B) provide a grace period of at least one month for the payment of each premium falling due after the first premium, during which grace period the plan shall continue in force and the issuer of the plan shall be liable for valid claims for covered losses incurred prior to the end of the grace period.
3. (2) If the issuer of a plan described subdivision (1) of this subsection does not receive payment by the due date, the issuer shall send a termination notice to the policyholder at least 21 days prior to termination notifying the policyholder that the issuer may terminate the plan if payment is not received by the termination date.
4. (3) The termination date of a plan described in subdivision (1) of this subsection shall not be earlier than the day following the last day of the grace period set forth in subdivision (1)(B) of this subsection.
(b) For all health insurance policies other than major medical insurance policies, a health insurer shall notify a policyholder of any premium payment due on a policy at least 21 days before the due date. If a health insurer does not receive payment by the due date, the health insurer shall send a termination notice to the policyholder notifying the policyholder that the health insurer will terminate the policy effective on the due date if payment is not received within 14 days from the date of mailing of the termination notice. If a health insurer does not receive payment within 14 days from the date of mailing of the termination notice, the health insurer may cancel coverage effective on the due date. (Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.)