Section 70. Accident and sickness minimum standards for benefits

A. The following minimum standards for benefits are prescribed for the categories of coverage noted in subsections B through G of this section. No individual policy of accident and sickness insurance shall be delivered or issued for delivery in this Commonwealth which does not meet the required minimum standards for the specified categories unless the commission finds that the policy or contract is approvable as limited benefit health insurance.

Nothing in this section shall preclude the issuance of any policy or contract combining two or more categories of coverage set forth in §§ 38.2-3519 A and 38.2-3519 B of the Code of Virginia.

B. Basic hospital expense coverage. "Basic hospital expense coverage" is a policy of accident and sickness insurance which provides coverage for a period of not less than 31 days during any continuous hospital confinement for each person insured under the policy, for expenses incurred for the necessary treatment and services rendered as a result of accident or sickness for at least the following:

1. Daily hospital room and board in an amount not less than the lesser of: (i) 80% of the charges for semi-private room accommodations; or (ii) $60 per day;

2. Miscellaneous hospital services for expenses incurred for the charges made by the hospital for services and supplies which are customarily rendered by the hospital and provided for use only during any one period of confinement in an amount not less than either: (i) 80% of the charges incurred up to at least $2,000; or (ii) 10 times the daily hospital room and board benefits; and

3. Hospital outpatient services consisting of: (i) hospital services on the day surgery is performed; (ii) hospital services rendered within 72 hours after accidental injury, in an amount not less than $100; and (iii) X-ray and laboratory tests to the extent that benefits for such services would have been provided to an extent not less than $200 if rendered to an inpatient of the hospital.

4. Benefits provided under subdivisions 1 and 2 of this subsection may be provided subject to a combined deductible amount not in excess of $200.

C. Basic Medical-Surgical Expense Coverage. "Basic medical-surgical expense coverage" is a policy of accident and sickness insurance which provides coverage for each person insured under the policy for the expenses incurred for the necessary services rendered by a physician for treatment of an injury or sickness for at least the following:

1. Surgical services:

a. In amounts not less than those provided on a fee schedule based on the relative values contained in the State of New York certified surgical fee schedule, or the 1964 California Relative Value Schedule or other acceptable relative value scale of surgical procedures, up to a maximum of at least $1,000 for any one procedure; or

b. Not less than 80% of the reasonable charges.

2. Anesthesia services, consisting of administration of necessary general anesthesia and related procedures in connection with covered surgical service rendered by a physician other than the physician (or his assistant) performing the surgical service:

a. In an amount not less than 80% of the reasonable charges; or

b. 15% of the surgical service benefit.

3. In-hospital medical services, consisting of physician services rendered to a person who is a bed patient in a hospital for treatment of sickness or injury other than that for which surgical care is required, in an amount not less than: (i) 80% of the reasonable charges; or (ii) $10 per day for not less than 31 days during the period of confinement.

D. Hospital confinement indemnity coverage. "Hospital confinement indemnity coverage" is a policy of accident and sickness insurance which provides daily benefits for hospital confinement on an indemnity basis in an amount not less than $30 per day and not less than 31 days during any one period of confinement for each person insured under the policy.

E. Major medical expense coverage. "Major medical expense coverage" is an accident and sickness insurance policy which provides hospital, medical, and surgical expense coverage, to an aggregate maximum of not less than $25,000; copayment by the covered person not to exceed 25% of covered charges; a deductible stated on a per person, per family, per illness, per benefit period, or per year basis, or a combination of such bases not to exceed 5% of the aggregate maximum limit under the policy, unless the policy is written to complement underlying hospital and medical insurance, in which case such deductible may be increased by the amount of the benefits provided by such underlying insurance, for each covered person for at least:

1. Daily hospital room and board expenses, prior to application of the copayment percentage, for not less than $100 daily (or in lieu thereof the average daily cost of the semi-private room rate in the area where the insured resides) for a period of not less than 60 days during continuous hospital confinement;

2. Miscellaneous hospital services, prior to application of the copayment percentage, for an aggregate maximum of not less than $3,000 or 15 times the daily room and board rate if specified in dollar amounts;

3. Surgical services, prior to application of the copayment percentage to a maximum of not less than $1,200 for the most severe operation with the amounts provided for other operations reasonably related to such maximum amount;

4. Anesthesia services, prior to application of the copayment percentage, for a maximum of not less than 15% of the covered surgical fees or, alternatively, if the surgical schedule is based on relative values, not less than the amount provided therein for anesthesia services at the same unit value as used for the surgical schedule;

5. In-hospital medical services, prior to application of the copayment percentage, consisting of physician services rendered to a person who is a bed patient in a hospital for treatment of sickness or injury other than that for which surgical care is required;

6. Out-of-hospital care, prior to application of the copayment percentage, consisting of physicians' services rendered on an ambulatory basis where coverage is not provided elsewhere in the policy for diagnosis and treatment of sickness or injury, and diagnostic x-ray, laboratory services, radiation therapy, and hemodialysis ordered by a physician; and

7. Not fewer than three of the following additional benefits, prior to application of the copayment percentage, or an aggregate maximum of such covered charges of not less than $2,000:

a. In-hospital private duty registered graduate professional nurse services.

b. Convalescent nursing home care.

c. Diagnosis and treatment by a radiologist or physiotherapist.

d. Rental of special medical equipment, as defined by the insurer in the policy.

e. Artificial limbs or eyes, casts, splints, trusses or braces.

f. Out-of-hospital prescription drugs and medications.

g. Treatment for functional nervous disorders, and mental and emotional disorders unless required by § 38.2-3412.1 of the Code of Virginia.

F. Disability income protection coverage. "Disability income protection coverage" is a policy which provides for periodic payments, weekly or monthly, for a specified period during the continuance of disability resulting from either sickness or injury or a combination thereof which:

1. Provides that periodic payments, which are payable after age 62 and reduced solely on the basis of age, are at least 50% of amounts payable immediately prior to age 62.

2. Contains an elimination period no greater than:

a. 90 days in the case of coverage providing a benefit of one year or less;

b. 180 days in the case of coverage providing a benefit of more than one year but not greater than two years; or

c. 365 days in all other cases during the continuance of disability resulting from sickness or injury.

3. Has a maximum period of time for which a benefit is payable during disability of at least six months except in the case of a policy covering disability arising out of pregnancy, childbirth, or miscarriage in which case the period for such disability may be limited to one month. No reduction in benefits shall be put into effect because of an increase in social security or similar benefits during a benefit period.

This section does not apply to those policies providing business buy-out coverage.

G. Income replacement coverage. "Income replacement coverage" is a policy which provides for periodic payments, weekly or monthly, for a specified period during which there is a loss of income resulting from sickness, injury, or a combination thereof which:

1. Provides that periodic payments, which are payable after age 62 and reduced solely on the basis of age, are at least 50% of amounts payable immediately prior to age 62.

2. Contains an elimination period no greater than:

a. 90 days in the case of coverage providing a benefit of one year or less;

b. 180 days in the case of coverage providing a benefit of more than one year but not greater than two years; or

c. 365 days in all other cases during the continuance of loss of income resulting from sickness or injury;

3. Has a maximum period of time for which a benefit is payable during the continuance of loss of income of at least six months except in the case of a policy covering loss of income arising out of pregnancy, childbirth, or miscarriage in which case the maximum period may be limited to one month. No reduction in benefits shall be put into effect because of an increase in social security or similar benefits during a benefit period;

4. Requires loss of income to be no greater than 80% of predisability income in order to pay full periodic benefits; and

5. The front page of the policy shall contain the following statements: THIS IS AN INCOME REPLACEMENT POLICY. THE POLICY PAYS NO BENEFITS IF THERE IS NO LOSS OF INCOME. (This notice must be in capital letters and in no less than 14-point type.)

This section does not apply to those policies providing business buy-out coverage.

H. Limited benefit health insurance coverage. "Limited benefit health insurance coverage" is any policy or contract that: (i) provides coverage for a category or categories not specified in subsections B through G of this section, or in any other chapter in Title 14 of the Virginia Administrative Code; (ii) provides coverage for a category or categories specified in subsections B through G of this section, but does not meet the minimum standards for the specified category or categories; or (iii) provides accident only coverage or specified accident only coverage. These policies shall be approved by the commission, and upon approval, may be delivered or issued for delivery in this Commonwealth only as limited benefit health insurance and not as any other type of coverage defined in this section. These policies shall meet the disclosure requirements set forth in 14VAC5-140-80.

Historical Notes

Derived from Regulation 19, Case No. INS880413, § 8, eff. January 1, 1989; amended, Volume 18, Issue 21, eff. July 1, 2002.

Statutory Authority

§§ 12.1-13, 38.2-223, and 38.2-3516 of the Code of Virginia.