38.2-3552 - Small employer health group cooperatives.
§ 38.2-3552. Small employer health group cooperatives.
A. 1. Any person or persons may organize and maintain a small employer healthgroup cooperative for the purpose of offering, providing, or facilitating theprovision of coverage for health care services to its employer-members.
2. The membership of the small employer health group cooperative shallconsist only of small employers. To participate as an employer-member of asmall employer health group cooperative, an employer shall be a smallemployer.
3. A person or persons organizing a small employer health group cooperativeand the small employers who propose to become employer-members of suchcooperative shall jointly execute a small employer health group cooperativeagreement. Such agreement shall identify the duties, rights and obligationsof the parties, and may include terms addressing (i) the length of time anemployer-member shall be enrolled through the cooperative and (ii) theconditions under which an employer-member may withdraw from the cooperative.If a small employer health group cooperative opts to be deemed thepolicyholder under subdivision 1 a of subsection B of this section, the smallemployer health group cooperative agreement shall include provisionsaddressing the collection of funds from employer-members for the payment ofall premiums due under the group health policy. Such provisions shallspecifically address all rights and obligations of each employer-memberwithin the cooperative when one or more employer-members fails to remit itsrespective share of any premium due. Such provisions shall also describe thecircumstances under which the group health policy will lapse for nonpaymentof premiums and shall identify the grace period requirements applicable togroup accident and sickness insurance, pursuant to § 38.2-3527. Nothing inthis subsection nor in the small employer health group cooperative agreementshall preclude or operate to prevent enforcement by the issuer of theprovisions of the group health policy addressing the payment of premiums andtermination of the policy due to nonpayment of premium.
B. A small employer health group cooperative shall be treated as, and giventhe same consideration and privileges as, a single entity for purposes ofnegotiating the terms, including premium rates, under which coverage may beissued or provided to the employer-members of the cooperative by a healthinsurance issuer proposing to issue a group health policy or policies forsuch purpose covering employer-members of the cooperative within the servicearea of the issuer, as follows:
1. At the option of the small employer health group cooperative, thecooperative shall either:
a. Be deemed the policyholder of such group health policy or policiescovering its employer-members within the service area of the issuer; or
b. Be deemed only a sponsoring entity facilitating the acquisition ofseparate group health policies for its employer-members within the servicearea of the issuer, which may be made available through the cooperative bythe issuer at terms mutually agreed upon by the cooperative and the issuer;and
2. A small employer health group cooperative opting to be deemed thepolicyholder under subdivision 1 a of this subsection shall obtainauthorization acceptable to the health insurance issuer from each of itsemployer-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 subdivision3 of subsection A;
b. Shall identify the specific representatives of the cooperative who shallbe permitted to enter into insurance contracts on behalf of theemployer-members; and
c. Shall specify the extent and limits of such authority.
C. To the extent that the activities of the cooperative or itsrepresentatives constitute selling, soliciting, or negotiating contracts ofinsurance, as those terms are defined in § 38.2-1800, the provisions ofChapter 18 (§ 38.2-1800 et seq.) of this title shall apply.
D. To the extent a small employer health group cooperative is a multipleemployer welfare arrangement as that term is defined in regulationspromulgated pursuant to § 38.2-3420, it shall be subject to all provisions ofthis title to the extent that such provisions are applicable to multipleemployer welfare arrangements.
(2006, c. 427.)