                                 CODE OF VIRGINIA

SMALL EMPLOYER HEALTH GROUP COOPERATIVES (§ 38.2-3552)

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.

   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 &#xA7; 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 &#xA7; 38.2-1800, the provisions of Chapter 18 (&#xA7;
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 &#xA7; 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.

HISTORY: 2006, c. 427.