Vermont Business Magazine The Treasurer’s Office announced today that starting in calendar year 2026, the state’s retired teachers currently receiving health insurance from Vermont Blue Advantage (VBA) will be covered by equivalent plans provided by HealthSpring.
The decision to switch providers was made after VBA proposed a near-50% rate increase for CY2026, despite agreeing to a 10% cap rate increase in their contract with the state. By moving to HealthSpring, premium rates will only increase 16.2% this January.
The change will impact over 7,000 retired teachers and beneficiaries in Vermont who currently receive their health insurance from VBA. Retiree enrollment will automatically be transferred from VBA to HealthSpring starting January 1, 2026, and retirees will maintain their current level of benefits.
Treasurer Pieciak emphasized that the transition will keep health care affordable and accessible for Vermont's retired teachers. “This change protects the benefits our retired educators have earned through their lifetime of service to our state, ensuring they can continue to afford the care they need. As rising health care costs push Vermonters to the brink, we will look for every opportunity to save our retirees money while maintaining excellent benefits.”
The Treasurer's Office secures health insurance for retired teachers, with costs shared between retirees and the State. Benefits are administered by the Treasurer’s Office Retirement Division, which is overseen by the Vermont State Teachers’ Retirement System (VSTRS) Board of Trustees.
After VBA presented their proposed CY2026 rate increase in July, the Treasurer’s Office immediately initiated a bid process to determine if the State could secure the same or better coverage at more affordable costs. After reviewing multiple proposals with the assistance of an expert consultant and earning approval from the VSTRS Board of Trustees on September 11, 2025, the State intends to move forward with coverage from HealthSpring.
"As Chair of the VSTRS Board and a retiree in the VSTRS health insurance plan, I was disappointed to see our insurance provider propose an almost 50% increase in the cost of health insurance this summer,” said Jon Harris, Chair of the VSTRS Board of Trustees. “I am proud of the Treasurer's Office work to quickly identify and vet an alternative plan provided by HealthSpring that will provide an equivalent benefit package at a substantially lower price. We are committed to doing everything in our power to make this a smooth transition and to continue to provide a strong benefit package to our retired educators for years in the future.”
HealthSpring, a national provider owned by Health Care Service Corporation (HCSC), brings years of Medicare Advantage experience to Vermont’s retired teachers. They currently serve over four million Medicare customers nationwide, including Vermont State College retirees. The Center for Medicare and Medicaid Services rates HealthSpring 4 out of 5 stars, indicating their members receive strong service, care, and customer support. That rating also enables HealthSpring to secure additional federal subsidies.
“We are honored to collaborate with Vermont State Teachers’ Retirement System (VSTRS) to deliver meaningful benefits that empower their retirees to live vibrant, healthy lives,” said Jane Funk, Vice President of Medicare Group Sales for HCSC. “We are committed to a seamless transition, including providing dedicated support, continuity of care, and personalized services.”
HealthSpring currently provides health coverage to hundreds of Vermont State College (VSC) retirees. VSC Chancellor Beth Mauch highlighted the critical support HealthSpring brings to their members. “A trusted partner to the Vermont State Colleges, HealthSpring helps deliver affordable, accessible care for our retirees at a sustainable cost. Our retirees get timely support when they need it, and they have confidence knowing they are in good hands. It is encouraging to see HealthSpring expand their coverage to provide the same level of quality services to Vermont's retired educators."
While retirees transitioning from VBA to HealthSpring will see a 16.2% rate increase, the change will save members hundreds—if not thousands—annually compared to remaining with VBA, depending on their individual subsidies. HealthSpring has also agreed to cap rate increases for the next two years, ensuring costs remain affordable for retirees and the State going forward.
The Treasurer’s Office and HealthSpring will hold a series of in-person and virtual public meetings to answer questions and help VSTRS members better understand the upcoming transition. Dates and locations will be announced.
9.11.2025. Montpelier, VT – Treasurer
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