Administrative Code

Virginia Administrative Code
6/26/2022

Part III. Local Employer Participation

1VAC55-20-220. Eligible employers.

Pursuant to § 2.1-20.1:02 of the Code of Virginia, local employers may, by making proper application and complying with this chapter, participate in the health benefits program.

Statutory Authority

§§ 2.1-20.1 and 2.1-20.1:02 of the Code of Virginia.

Historical Notes

Derived from VR525-01-02 § 3.1, eff. November 21, 1990.

1VAC55-20-230. Entrance into the health benefits program.

A. Any local employer desiring to participate in the health benefits program shall complete an employer application provided by the department and execute an adoption agreement acknowledging the rights, duties, and responsibilities of the department and the local employer.

As a condition of participation, the department may require the local employer to complete the application in its entirety and deliver it to the department no less than 120 days prior to the effective date of coverage under the health benefits program. The application shall include the designation of a local administrator and include a list of other individuals whose responsibilities may be such that the department may have cause to contact them.

The application of a local employer may be withdrawn without penalty any time within the first 30 days after the department's delivery of rates to the employer. A 15-day extension will be available upon written request by the employer. Thereafter, the department may levy a processing charge not to exceed $500 to cover the cost of processing the application.

B. Except in unusual circumstances to be determined by the department, the completion of any waiting periods will not be required of employees of local employers joining the program at the time of a local employer's initial participation.

C. Local employers may include in the program their active employees, or their active employees and their retirees. Local employers may not elect to cover only retirees. If the local employer wishes to provide benefits to their Medicare-eligible retirees it must also provide coverage for non-Medicare retirees. The local employer's beneficiaries qualified under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) or similar legislation may also participate in the program.

Statutory Authority

§ 2.2-2818 of the Code of Virginia.

Historical Notes

Derived from VR525-01-02 § 3.2, eff. November 21, 1990; amended, Virginia Register Volume 20, Issue 20, eff. July 16, 2004; Volume 30, Issue 14, eff. April 24, 2014.

1VAC55-20-240. Payment of contributions.

A. Contributions due. It is the sole responsibility of the local employer to remit local employer and local employee contributions to the department or its designee. The local employer may be responsible for remitting such contributions for active, retired, and COBRA-participating employees. Health benefits program contributions are to be made monthly, in advance, and are due at the department on the first of each month. If the first day of the month falls on a weekend or holiday, the payment is due at the department on the first business day of the month.

B. Nonpayment of contributions. A 10-day grace period for the nonpayment of contributions is hereby provided. If the full and complete payment of contributions is not received by the 10th of the month, a notice will be sent to the local employer by the department or its designee. Additionally, there shall be imposed an interest penalty of 12% per annum of the outstanding balance unpaid as of the 10th.

In the event that payment is not received by the 20th of the month, the department shall place a notice of nonpayment of contributions in a newspaper of general circulation in the locality of the local employer notifying the employees of such local employer that claims incurred after the end of the current month will not be paid until all outstanding contributions and interest have been paid.

Furthermore, the department reserves the right to collect from a local employer the greater of the monthly contribution or any amounts incurred for claims during a period of nonpayment as well as any other costs related thereto.

C. Nonpayment as breach. The nonpayment of contributions by a local employer shall constitute a breach of the adoption agreement and the local employer may be obligated to pay damages. In the event that the local employer terminates participation, such termination can only be prospective, and the employer shall be obligated to pay the greater of past contributions or actual claims incurred during such period and any interest and damages that may be associated with such nonpayment.

D. Coverage and contribution period. Except as noted here, coverage elections including those made by new employees are made on a prospective basis, that is, effective the first of the month coinciding with or following the receipt of the election form. However, if an election form is received from a new employee on the first business day of the month, coverage for the employee will commence on the first day of that month, (see 1VAC55-20-370). Coverage elections made for newborns, adoption, or placement for adoptions are effective the date the child is born, adopted, or placed for adoption, so long as the employee makes the coverage election within 60 days of the event. Coverage terminations are effective the end of the month following receipt of an election notice, except for terminations that are required by the plan. Coverage terminations required by the plan are effective the end of the month that the event takes place. Examples of coverage terminations required by the plan are such things as a divorce, termination of employment, or a dependent child losing eligibility.

Contributions shall always be for full calendar months. Local employees who terminate employment within a calendar month shall have coverage through the end of the month in which they terminate. In the event that a terminating local employee becomes covered under an accident or health plan of another employer prior to the end of the month in which the local employee terminates, this health benefits program shall be a secondary payor to the former local employee's new coverage.

Statutory Authority

§ 2.2-2818 of the Code of Virginia.

Historical Notes

Derived from VR525-01-02 § 3.3, eff. November 21, 1990; amended, Virginia Register Volume 20, Issue 20, eff. July 16, 2004; Volume 30, Issue 14, eff. April 24, 2014.

1VAC55-20-250. Enrollment.

The local employer is responsible for providing local employees with enrollment forms for participation in the health benefits program. Such forms shall be provided to the local employer by the department or its designee. It is the responsibility of the local employer to provide information to local employees concerning the benefits offered in each of the plans comprising the health benefits program at such time and in such manner that it can be expected that the local employee can make an informed decision regarding the types of coverage that are being offered.

The local employer is responsible for ensuring that enrollment forms for participation made by local employees are fully completed on a timely basis, signed and certified. No later than 30 days prior to the effective date of coverage, the local employer shall forward the enrollment forms to the department or its designee, as may be appropriate. The department shall be responsible for notifying the local employer as to the location and manner of delivery of all such local employee enrollment forms. Further, the local employer shall be responsible for reporting any changes in benefit coverage in a manner similar to the reporting of an initial application with the department having the ability to waive the 30-day notice requirement.

Statutory Authority

§§ 2.2-1204 and 2.2-2818 of the Code of Virginia.

Historical Notes

Derived from VR525-01-02 § 3.4, eff. November 21, 1990; amended, Virginia Register Volume 20, Issue 20, eff. July 16, 2004.

1VAC55-20-260. Minimum local employer contributions.

A. The department shall require, as a condition of local employer participation in the health benefits program, that a local employer pay a minimum portion of the plan contribution attributable to an active local employee's coverage. Contributions toward the cost of retiree coverage are permitted but not required. Unless otherwise specified in a local employer's adoption agreement, participating local employers shall contribute, at a minimum, 80% of the cost of single coverage, and 20% of the cost of dependent coverage as a condition of participation. In the event that an employer enrolls 75% or more of all eligible employees, the employer will not be required to contribute the above amounts towards the cost of dependent coverage.

B. Local employers allowing part-time employees to participate in the program must contribute a minimum of 50% of the amount they contribute toward active employee coverage (at all membership levels) on behalf of their participating part-time employees.

For purposes of this section, amounts contributed on behalf of an employee who has requested a reduction in salary pursuant to a plan qualified under § 125 of the Internal Revenue Code (Tax Treatment of Cafeteria Plans) will not be counted as an employer contribution.

Statutory Authority

§§ 2.2-1204 and 2.2-2818 of the Code of Virginia.

Historical Notes

Derived from VR525-01-02 § 3.5, eff. November 21, 1990; amended, Virginia Register Volume 20, Issue 20, eff. July 16, 2004.

1VAC55-20-270. Selection of plans.

Local employers electing to participate in the health benefits program must, as a condition of participation, agree to offer exclusively one or more plans constituting such program. Notwithstanding the above, a local employer, with the approval of the department may offer another accident or health plan provided that such other plan does not duplicate the coverage offered by the health benefits program. Such permission shall not be unreasonably withheld.

Local employers participating in the health benefits program who desire to offer a health maintenance organization (HMO) must offer the HMOs included in the health benefits program and only those HMOs.

Statutory Authority

§§ 2.1-20.1 and 2.1-20.1:02 of the Code of Virginia.

Historical Notes

Derived from VR525-01-02 § 3.6, eff. November 21, 1990.

1VAC55-20-280. Commencement of local employer participation.

Local employers may join initially at any time upon the timely submission of an employer application, but, thereafter, renewals must be as of July 1 of each year. Local school boards may have an October 1 renewal if they so elect. Initial participation by a local employer at any time other than on July 1 (October 1) may be for the short plan year ending on the June 30 (September 30) following initial participation.

There shall be no specified time for local employee enrollment coincident with the local employer's initial participation in the health benefits program provided the department or its designee shall have knowledge of the local employee elections at least 30 days prior to the effective date of coverage. Thereafter the open enrollment period for local employees shall take place during the month of April or May of each year with the effective date of coverage then being July 1 of such year. Certain school groups may conduct their open enrollment in August and September.

Statutory Authority

§ 2.2-2818 of the Code of Virginia.

Historical Notes

Derived from VR525-01-02 § 3.7, eff. November 21, 1990; amended, Virginia Register Volume 20, Issue 20, eff. July 16, 2004; Volume 30, Issue 14, eff. April 24, 2014.

1VAC55-20-290. Reparticipation of local employers.

Local employers having withdrawn from the health benefits program may reenter the program only with the consent of the department, and only on the July 1 (October 1 for school boards) following the timely submission of an employer application. The July 1 (October 1) effective date may be waived for local employers who have been away from the program for more than three years. Local employers seeking reparticipation may be required to serve a waiting period.

Department consent shall not be granted until all pending contributions, penalties, and other assessments have been paid by a local employer and there is no outstanding litigation pending between the department and the local employer. A pending appeal will not prohibit a local employer from reparticipating in the health benefits program.

Statutory Authority

§ 2.2-2818 of the Code of Virginia.

Historical Notes

Derived from VR525-01-02 § 3.8, eff. November 21, 1990; amended, Virginia Register Volume 20, Issue 20, eff. July 16, 2004; Volume 30, Issue 14, eff. April 24, 2014.

1VAC55-20-300. Ceasing participation in the health benefits program.

A local employer who desires to terminate participation in the health benefits program may do so at any time, as of the last day of any calendar month, with three months notice to the department. The local employer shall be obligated to pay any and all contributions otherwise required through the date of termination of participation and interest related thereto. Additionally, a terminating local employer shall be responsible for any adverse experience adjustment which may apply with respect to the year termination occurred and any prior year within which the terminating local employer participated in the program.

Upon the local employer's cessation of participation in the program, all of the local employers' participants, including retirees, dependents of retirees and COBRA beneficiaries will cease to be covered under the program.

Statutory Authority

§§ 2.2-1204 and 2.2-2818 of the Code of Virginia.

Historical Notes

Derived from VR525-01-02 § 3.9, eff. November 21, 1990; amended, Virginia Register Volume 20, Issue 20, eff. July 16, 2004.

1VAC55-20-310. Compliance.

The department shall oversee the local employers and state agencies and shall assist the employees thereof in the pursuit of all rights and benefits. The department shall hold the employee harmless for any errors made by local employers and state agencies. The cost of any such errors, where applicable, shall be borne by the local employer or state agency, and not the employee.

Nothing in this chapter shall affect the rights of any local employee to bring a cause of action against a local employer for action taken hereunder with respect to such local employer's willful disregard of this chapter. In the event a local employee brings a cause of action against the department due to a local employer's willful disregard for the requirements of this chapter, the local employer as a condition of initial participation in the program shall reimburse the department for any such settlement required by a court of law.

Statutory Authority

§§ 2.1-20.1 and 2.1-20.1:02 of the Code of Virginia.

Historical Notes

Derived from VR525-01-02 § 3.10, eff. November 21, 1990.

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