                                 CODE OF VIRGINIA

CONTINUATION ON TERMINATION OF ELIGIBILITY (§ 38.2-3541)

A. Each group hospital policy, group medical and surgical policy, or group major
medical policy delivered or issued for delivery in the Commonwealth or renewed,
reissued, or extended if already issued, shall contain a provision for
continuation of coverage under the group policy if the insurance on a person
covered under such a policy ceases because of the termination of the
person&#8217;s eligibility for coverage, prior to that person becoming eligible
for Medicare or Medicaid benefits. This provision 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).

B. The insured&#8217;s present coverage shall continue under the policy for a
period of 12 months immediately following the date of the termination of the
person&#8217;s eligibility, without evidence of insurability, subject to the
following requirements:

   1. The application and payment for the extended coverage is made to the group
   policyholder within 31 days after issuance of the written notice required in
   subsection C, but in no event beyond the 60-day period following the date of
   the termination of the person&#8217;s eligibility;

   2. Each premium for such extended coverage is timely paid to the group
   policyholder on a monthly basis during the 12-month period;

   3. The premium for continuing the group coverage shall be at the
   insurer&#8217;s current rate applicable to the group policy plus any
   applicable administrative fee not to exceed two percent of the current rate;

   4. Continuation shall only be available to an employee or member who has been
   continuously insured under the group policy during the entire three-month
   period immediately preceding termination of eligibility; and

   5. Continuation shall not be available to an individual whose eligibility for
   coverage under the group policy ceased because the individual was discharged
   from employment by the group policyholder for gross misconduct. As used in
   this subdivision, &#8220;gross misconduct&#8221; means any conduct connected
   with the individual&#8217;s work that would constitute misconduct under &#xA7;
   60.2-618, including deliberately and willfully engaging in conduct evincing a
   complete disregard for the employer&#8217;s workplace standards and policies.

C. The group policyholder shall provide each employee or other person covered
under such a policy written notice of the availability of continuation of
coverage and the procedures and timeframes for obtaining continuation of the
group policy. Such notice shall be provided within 14 days of the
policyholder&#8217;s knowledge of the employee&#8217;s or other covered
person&#8217;s loss of eligibility under the policy.

HISTORY: 1979, c. 97, § 38.1-348.11; 1982, c. 625; 1984, c. 300; 1986, c. 562;
1988, c. 551; 2010, c. 503; 2014, c. 814; 2018, c. 471.