HB315: Health insurance; continuation of group health coverage upon termination of eligibility.
Be it enacted by the General Assembly of Virginia:
1. That ? 38.2-3541 of the Code of Virginia is amended and reenacted as follows:
? 38.2-3541. Continuation on termination of eligibility.
Each group hospital policy, group medical and surgical policy
or group major medical policy delivered or issued for delivery in this
Commonwealth or renewed, reissued or extended if already issued, shall contain,
subject to the policyholder's selection, one of the options set forth in this
section. These options Option 1 shall apply if the insurance on a
person covered under such a policy ceases because of the termination of the
person's eligibility for coverage, prior to that person becoming eligible for
Medicare or Medicaid benefits unless such termination is due to termination of
the group policy under circumstances in which the insured person is insurable
under other replacement group coverage or health care plan without waiting
periods or preexisting conditions under the replacement coverage or plan. Option
2 shall apply if the insurance on a person covered under such a policy that
remains in force ceases because of the termination of the person?s eligibility
for coverage prior to that person becoming eligible for Medicare or Medicaid
benefits. Option 2 shall not be applicable if the group policyholder is
required by federal law to provide for continuation of coverage under its group
health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA).
1. Option 1: To have the insurer issue him, without evidence of insurability, an individual accident and sickness insurance policy in the event that the insurer is not exempt under ? 38.2-3416 and offers such policy, subject to the following requirements:
a. The application for the policy shall be made, and the first
premium paid to the insurer within thirty-one days after the termination
issuance of the written notice required in subdivision 3, but in no event
beyond the 60 day period following the date of the termination of the person's
eligibility;
b. The premium on the policy shall be at the insurer's then customary rate applicable: (i) to such policies, (ii) to the class of risk to which the person then belongs, and (iii) to his or her age on the effective date of the policy;
c. The policy will not result in over-insurance on the basis of the insurer's underwriting standards at the time of issue;
d. The benefits under the policy shall not duplicate any benefits paid for the same injury or same sickness under the prior policy;
e. The policy shall extend coverage to the same family members that were insured under the group policy; and
f. Coverage under this option shall be effected in such a way
as to result in continuous coverage during the thirty-one-day period
from the date of the insured's termination of eligibility for such insured
if requested and paid for by the insured.
2. Option 2: To have his present coverage under the policy
continued for a period of ninety days 12 months immediately
following the date of the termination of the person's eligibility, without
evidence of insurability, subject to the following requirements:
a. The application and payment for the extended
coverage is made to the group policyholder and the total premium for the
ninety-day period is paid to the group policyholder prior to the termination
within 31 days after issuance of the written notice required in subdivision 3,
but in no event beyond the 60 day period following the date of the termination
of the person?s eligibility;
b. Each premium for such extended coverage is timely paid to the group policyholder on a monthly basis during the twelve-month period;
c. The premium for continuing the group coverage shall be at the insurer's current rate applicable to the group policy plus any applicable administrative fee not to exceed two percent of the current rate; and
c d. Continuation shall only be available to an
employee or member who has been continuously insured under the group policy
during the entire three months' period immediately preceding termination of
eligibility.
3. The group policyholder shall provide each employee or other person covered under such a policy written notice of the availability of the option chosen and the procedures and timeframes for obtaining continuation or conversion of the group policy. Such notice shall be provided within 14 days of the policyholder's knowledge of the employee's or other covered person's loss of eligibility under the policy.
Be it enacted by the General Assembly of Virginia:
1. That §§ 38.2-3416 and 38.2-3541 of the Code of Virginia are amended and reenacted as follows:
§ 38.2-3416. Conversion on termination of eligibility; insurer required to offer conversion policy or group coverage.
A. Before an insurer who delivers or issues for delivery in
this Commonwealth or who renews, reissues or extends if already issued, any
group hospital, medical and surgical or group major medical policy, the insurer
shall be required to be able to offer without evidence of insurability to
residents of this Commonwealth who are covered under the policy, whose
eligibility may terminate under the policy, and
who may elect Option 1 under § 38.2-3541 a nongroup policy of group accident and sickness
insurance, either individual or family, whichever is
appropriate, coverage
pursuant to the provisions of § 38.2-3541 unless such termination is due to
termination of the group policy under circumstances in which the insured person
is insurable under other replacement group coverage or health care plan without
waiting periods or preexisting conditions under the replacement coverage or
plan.
B. Any insurer who has in effect prior to January 1, 1985, any group policy described in subsection A of this section, may be exempted from the provisions of subsection A of this section. However, for persons affected by the termination of eligibility, the insurer shall be required to continue coverage under the existing group policy, without evidence of insurability and at the insurer's current rate applicable to the group policy, for as long as the affected persons elect or as long as the insurer is not required to offer an acceptable conversion policy.
§ 38.2-3541. Conversion or continuation on termination of eligibility.
A. Each
group hospital policy, group medical and surgical policy or group major medical
policy delivered or issued for delivery in this Commonwealth or renewed,
reissued or extended if already issued, shall contain,
subject to the policyholder's selection, one of the options option set forth in this section subsection B. These options This option shall apply if the
insurance on a person covered under such a policy ceases because of the
termination of the person's eligibility for coverage, prior to that person
becoming eligible for Medicare or Medicaid benefits unless such termination is
due to termination of the group policy under circumstances in which the insured
person is insurable under other replacement group coverage or health care plan
without waiting periods or preexisting conditions under the replacement
coverage or plan.
1. Option 1: To have
the insurer issue him, without evidence of insurability, an individual accident
and sickness insurance policy in the event that the insurer is not exempt under
§ 38.2-3416 and offers such policy, subject to the following requirements:
a. The application for
the policy shall be made, and the first premium paid to the insurer within
thirty-one days after the termination;
b. The premium on the
policy shall be at the insurer's then customary rate applicable: (i) to such
policies, (ii) to the class of risk to which the person then belongs, and (iii)
to his or her age on the effective date of the policy;
c. The policy will not
result in over-insurance on the basis of the insurer's underwriting standards
at the time of issue;
d. The benefits under
the policy shall not duplicate any benefits paid for the same injury or same
sickness under the prior policy;
e. The policy shall
extend coverage to the same family members that were insured under the group
policy; and
f. Coverage under this
option shall be effected in such a way as to result in continuous coverage
during the thirty-one-day period for such insured.
2. Option 2: To B. Each person described
in subsection A shall have the
option to have his present coverage under the policy
continued for a period of ninety days 12 months immediately following
the date of the termination of the person's eligibility, without evidence of
insurability, subject to the following requirements:
a 1. The application for the
extended coverage is made to the group policyholder and the
total each monthly
premium for the ninety-day is paid timely each month during the 12-month
period is paid to the group
policyholder prior to the
termination;
b 2. The premium for continuing
the group coverage shall be at the insurer's current rate applicable to the
group policy plus any applicable
administrative fee not to exceed two percent of the current rate;
and
c 3. Continuation shall only be
available to an employee or member who has been continuously insured under the
group policy during the entire three months' period immediately preceding
termination of eligibility.
C. The policyholder shall provide each employee or other person covered under such a policy written notice of the availability of this option and the procedures and time periods for obtaining continuation of coverage under the group policy.