Chapter 135. Rules Governing Individual and Small Group Market Health Benefit Plans
14VAC5-135-10. Applicability and scope.
A. This chapter (14VAC5-135) implements the provisions of Chapters 34 (§ 38.2-3400 et seq.) and 35 (§ 38.2-3500 et seq.) of Title 38.2 of the Code of Virginia and sets forth the standards for compliance with the federal Affordable Care Act.
B. This chapter shall apply to all individual and small group market health benefit plans delivered or issued for delivery in this Commonwealth.
C. Health benefit plans filed in this Commonwealth and approved for sale in a health benefit exchange pursuant to § 38.2-326 of the Code of Virginia shall comply with the provisions of this chapter.
D. This chapter shall not apply to a grandfathered health plan, as defined in § 38.2-3438 of the Code of Virginia, for as long as the plan maintains its status in accordance with federal regulations.
E. This chapter shall not apply to excepted benefits policies, as defined in § 38.2-3431 of the Code of Virginia.
F. This chapter shall not apply to a short-term limited-duration medical plan, as defined in § 38.2-3407.21 of the Code of Virginia.
Statutory Authority
§ 38.2-223 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 39, Issue 10, eff. January 1, 2023.
14VAC5-135-20. Definitions.
The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:
"Affordable Care Act" or "ACA" means the Patient Protection and Affordable Care Act (P.L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) and any federal regulations issued pursuant thereto.
"Covered benefits" or "benefits" means those health care services to which an enrollee is entitled under the terms of a health benefit plan.
"Dependent" means the spouse, child, or other class of persons of an enrollee or eligible individual, subject to the applicable terms of the policy, contract, or plan.
"Eligible individual" means an employee of a small employer as shall be determined (i) in accordance with the terms of the group health benefit plan; (ii) as provided by the health carrier under rules of the health carrier that are uniformly applicable to employers in the small group market; and (iii) in accordance with all applicable laws of the Commonwealth.
"Enrollee" means a policyholder, subscriber, participant, member, insured, or other individual covered by a health benefit plan.
"Exchange" means either (i) the federal health benefit exchange established pursuant to § 1321 of the Affordable Care Act or (ii) the Virginia Health Benefit Exchange established pursuant to Chapter 65 (§ 38.2-6500 et seq.) of Title 38.2 of the Code of Virginia, through which qualified health plans and qualified dental plans are made available to qualified individuals.
"Group health plan" means an employee welfare benefit plan as defined in § 3(1) of the Employee Retirement Income Security Act of 1974 (ERISA) (29 USC § 1002(1)) to the extent that the plan provides medical care within the meaning of § 733(a) of ERISA (29 USC § 1191b(a)) to employees, including both current and former employees, or their dependents as defined under the terms of the plan directly or through insurance, reimbursement, or otherwise.
"Health benefit plan" means a policy, contract, certificate, or agreement offered by a health carrier to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, except as otherwise specifically exempted. "Health benefit plan" does not include the "excepted benefits" as defined in § 38.2-3431 of the Code of Virginia.
"Health carrier" means an entity subject to the insurance laws and regulations of the Commonwealth and subject to the jurisdiction of the State Corporation Commission that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including a health carrier licensed to sell accident and sickness insurance, a health maintenance organization, a health services plan, or any other entity providing a plan of health insurance, health benefits, or health care services.
"Health insurance coverage" means benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise) under any hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance organization contract offered by a health carrier.
"Health status-related factor" means any of the following factors: health status; medical condition, including physical and mental illnesses; claims experience; receipt of health care services; medical history; genetic information; evidence of insurability, including conditions arising out of acts of domestic violence or extra-hazardous activities; disability; or any other health status-related factor as determined by federal regulation.
"Individual market" means the market for health insurance coverage offered to individuals other than in connection with a group health plan.
"Medical necessity" or "medically necessary" means appropriate and necessary health care services that are rendered for a condition that, according to generally accepted principles of good medical practice, requires the diagnosis or direct care and treatment of an illness, injury, or pregnancy-related condition, and are not provided only as a convenience.
"Premium" means all moneys paid by an employer, eligible individual, or enrollee as a condition of coverage from a health carrier, including fees and other contributions associated with the health benefit plan.
"Small group market" means the health insurance market under which eligible individuals obtain health benefit plans directly or through any arrangement on behalf of themselves and their dependents through a group health plan maintained by a small employer.
Statutory Authority
§ 38.2-223 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 39, Issue 10, eff. January 1, 2023.
14VAC5-135-30. General policy requirements.
A. Each health benefit plan shall contain a guaranteed renewability provision in accordance with § 38.2-3430.7 or 38.2-3432.1 of the Code of Virginia. The provision shall appear on the first page of the policy.
B. Each health benefit plan shall contain a termination, cancellation, or discontinuation of coverage policy provision in accordance with § 38.2-3430.7 or 38.2-3432.1 of the Code of Virginia.
C. Each health benefit plan shall contain a provision for grace periods:
1. An individual health benefit plan shall contain a grace period of not less than 31 days after the initial premium is paid. Further, in accordance with 45 CFR 156.270(d), an individual health benefit plan offered on the exchange shall also contain language that an enrollee receiving advance payments of the premium tax credit is instead subject to a grace period of three consecutive months, during which time the health carrier shall pay all appropriate claims for services rendered to the enrollee during the first month of the grace period and may pend claims for services rendered to the enrollee in the second and third months of the grace period. If the enrollee exhausts the three-month grace period, the health carrier shall terminate the policy effective the last day of the first month of the three-month grace period.
2. A group health benefit plan shall contain a grace period of not less than 31 days after the initial premium is paid.
D. A health benefit plan shall contain essential health benefits in accordance with § 38.2-3451 of the Code of Virginia. Benefits required by any applicable state or federal law shall also be covered.
E. The standard by which payment of benefits is made shall be clearly described in the policy. "Allowed amount" and other similar words shall be clearly defined.
Statutory Authority
§ 38.2-223 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 39, Issue 10, eff. January 1, 2023.
14VAC5-135-40. Student health insurance coverage.
A. For purposes of this section, "student health insurance coverage" means a type of individual health insurance coverage offered in the individual market that (i) is provided pursuant to a written agreement between an institution of higher education, as defined by the Higher Education Act of 1965 (P.L. 89-329), and a health carrier and provided to students enrolled in that institution of higher education and their covered dependents; (ii) does not make health insurance coverage available other than in connection with enrollment as a student or as a covered dependent of a student of the institution of higher education; and (iii) does not condition eligibility for health insurance coverage on any health status-related factor related to a student or a covered dependent of the student.
B. Student health insurance coverage is subject to the requirements of the ACA, including essential health benefits, mental health parity, and the requirements of this chapter, except as noted in this section.
C. Student health insurance coverage is exempt from the guaranteed availability requirements of § 38.2-3430.3 of the Code of Virginia and the guaranteed renewability requirements of § 38.2-3430.7 of the Code of Virginia.
D. Student health insurance coverage is not subject to the single risk pool requirement outlined in § 1312(c) of the ACA.
E. Student health insurance coverage premium rates may be based on a school-specific community rating.
Statutory Authority
§ 38.2-223 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 39, Issue 10, eff. January 1, 2023.
14VAC5-135-50. Prohibitions, limitations, and disclosures.
A. A health carrier shall not discriminate on the basis of race, color, national origin, disability, age, sex, gender identity, gender expression, sexual orientation, or status as a transgender individual. Nothing in this section shall be construed to prevent a health carrier from appropriately utilizing reasonable medical management techniques including medical necessity.
B. If a health carrier offers an optional benefit to a health benefit plan, the health carrier may file a separate schedule that includes the additional benefit and identify the health benefit plan to which the schedule applies. A different plan identification is necessary to distinguish the health benefit plan with the additional benefit.
C. A health carrier may offer a health benefit plan that does not include pediatric oral health benefits if:
1. The health carrier is reasonably assured that pediatric oral health benefits are available to the purchaser of the health benefit plan in accordance with § 38.2-3451 B of the Code of Virginia, and
2. The plan contains the following statement on the first page of the policy and bold:
"This policy does not provide the ACA-required pediatric oral health benefits."
D. If an individual policy contains a military service exclusion or a provision that suspends coverage during military service, the policy shall provide for a refund of unearned premium upon receipt of written notice of the military service.
E. A policy application shall not contain questions about any health-status related factors other than age and tobacco use.
F. A policy shall only be rated on age, tobacco use, geographic location, plan category, and whether the policy covers dependents in accordance with § 38.2-3447 of the Code of Virginia.
G. No policy shall contain a provision that allows for increase in premium or change in deductible except during renewal.
H. A health benefit plan shall not impose any preexisting condition exclusion.
I. Policy exclusions may be no more restrictive than allowed by the state-selected essential health benefits benchmark plan.
Statutory Authority
§ 38.2-223 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 39, Issue 10, eff. January 1, 2023.
14VAC5-135-60. Severability.
If any provision of this chapter or its application to any person or circumstance is for any reason held to be invalid, the remainder of the chapter and the application of the provisions to other persons or circumstances shall not be affected.
Statutory Authority
§ 38.2-223 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 39, Issue 10, eff. January 1, 2023.