Virginia Code 38.2-3552: Small employer health group cooperatives.
A. 1. Any person or persons may organize and maintain a small employer health group cooperative for the purpose of offering, providing, or facilitating the provision of coverage for health care services to its employer-members.
Terms Used In Virginia Code 38.2-3552
- Accident and sickness insurance: means insurance against loss resulting from sickness, or from bodily injury or death by accident or accidental means, or from a combination of any or all of these perils. See Virginia Code 38.2-109
- cooperative: means an entity authorized by its employer-members to negotiate with health insurance issuers on their behalf as to the terms, including premium rates, under which a group health policy or policies may be issued, providing coverage for the eligible employees of such employer-members and their eligible dependents. See Virginia Code 38.2-3551
- Employer-member: means a small employer participating in a small employer health group cooperative. See Virginia Code 38.2-3551
- Grace period: The number of days you'll have to pay your bill for purchases in full without triggering a finance charge. Source: Federal Reserve
- issuer: means a company authorized to issue coverage under Article 3 (§ Virginia Code 38.2-3551
- Person: means any association, aggregate of individuals, business, company, corporation, individual, joint-stock company, Lloyds type of organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Virginia Code 38.2-100
- policy: means a group insurance policy providing hospital, medical and surgical or major medical coverage on an expense-incurred basis, a group accident and sickness insurance policy or subscription contract, and a group health care plan for health care services or limited health care services provided by a health maintenance organization. See Virginia Code 38.2-3551
- rates: means any rate of premium, policy fee, membership fee or any other charge made by an insurer for or in connection with a contract or policy of insurance. See Virginia Code 38.2-100
- Service area: means the geographic area within which a health insurance issuer is authorized to sell a group health policy or policies. See Virginia Code 38.2-3551
- Small employer: means , in connection with a group health policy with respect to a calendar year and a plan year, an employer who employed an average of at least one but not more than 50 employees on business days during the preceding calendar year and who employs at least one employee on the first day of the plan year. See Virginia Code 38.2-3551
2. The membership of the small employer health group cooperative shall consist only of small employers. To participate as an employer-member of a small employer health group cooperative, an employer shall be a small employer.
3. A person or persons organizing a small employer health group cooperative and the small employers who propose to become employer-members of such cooperative shall jointly execute a small employer health group cooperative agreement. Such agreement shall identify the duties, rights and obligations of the parties, and may include terms addressing (i) the length of time an employer-member shall be enrolled through the cooperative and (ii) the conditions under which an employer-member may withdraw from the cooperative. If a small employer health group cooperative opts to be deemed the policyholder under subdivision 1 a of subsection B of this section, the small employer health group cooperative agreement shall include provisions addressing the collection of funds from employer-members for the payment of all premiums due under the group health policy. Such provisions shall specifically address all rights and obligations of each employer-member within the cooperative when one or more employer-members fails to remit its respective share of any premium due. Such provisions shall also describe the circumstances under which the group health policy will lapse for nonpayment of premiums and shall identify the grace period requirements applicable to group accident and sickness insurance, pursuant to § 38.2-3527. Nothing in this subsection nor in the small employer health group cooperative agreement shall preclude or operate to prevent enforcement by the issuer of the provisions of the group health policy addressing the payment of premiums and termination of the policy due to nonpayment of premium.
B. A small employer health group cooperative shall be treated as, and given the same consideration and privileges as, a single entity for purposes of negotiating the terms, including premium rates, under which coverage may be issued or provided to the employer-members of the cooperative by a health insurance issuer proposing to issue a group health policy or policies for such purpose covering employer-members of the cooperative within the service area of the issuer, as follows:
1. At the option of the small employer health group cooperative, the cooperative shall either:
a. Be deemed the policyholder of such group health policy or policies covering its employer-members within the service area of the issuer; or
b. Be deemed only a sponsoring entity facilitating the acquisition of separate group health policies for its employer-members within the service area of the issuer, which may be made available through the cooperative by the issuer at terms mutually agreed upon by the cooperative and the issuer; and
2. A small employer health group cooperative opting to be deemed the policyholder under subdivision 1 a of this subsection shall obtain authorization acceptable to the health insurance issuer from each of its employer-members to act on behalf of the employer-members in this capacity. Such authorization:
a. Shall be included in the terms of the agreement referenced in subdivision 3 of subsection A;
b. Shall identify the specific representatives of the cooperative who shall be permitted to enter into insurance contracts on behalf of the employer-members; and
c. Shall specify the extent and limits of such authority.
C. To the extent that the activities of the cooperative or its representatives constitute selling, soliciting, or negotiating contracts of insurance, as those terms are defined in § 38.2-1800, the provisions of Chapter 18 (§ 38.2-1800 et seq.) of this title shall apply.
D. To the extent a small employer health group cooperative is a multiple employer welfare arrangement as that term is defined in regulations promulgated pursuant to § 38.2-3420, it shall be subject to all provisions of this title to the extent that such provisions are applicable to multiple employer welfare arrangements.
2006, c. 427.