Section 230. Reasons for termination or rescission

A. A health maintenance organization shall not terminate an enrollee's coverage for services provided under a health maintenance organization contract except for one or more of the following reasons:

1. Failure to pay the premium required by the contract as shown in the contract or evidence of coverage;

2. The policyholder or contract holder has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact in connection with the coverage;

3. The group contract holder has failed to comply with a material plan provision relating to employer contribution or group participation rules; or

4. Discontinuance of the group contract under which the enrollee was covered.

B. A health maintenance organization shall not terminate coverage for services provided under a policy or contract without giving the subscriber written notice of termination, effective at least 31 days from the date of mailing or, if not mailed, from the date of delivery, except that:

1. For termination due to nonpayment of premium, the grace period as required in 14VAC5-211-210 B 16 shall apply;

2. For termination due to nonpayment of premium by an employer, the notice provisions required in § 38.2-3542 C of the Code of Virginia shall apply; or

3. For termination due to change of eligibility status, immediate notice of termination may be given.

C. A health maintenance organization shall not rescind coverage for services provided under a contract unless the enrollee or a person seeking coverage on behalf of an enrollee performs an act, practice, or omission that constitutes fraud, or the person makes an intentional misrepresentation of material fact, as prohibited by the terms of the plan. Notice of any rescission shall comply with the requirements of § 38.2-3441 of the Code of Virginia. Upon rescission, a health maintenance organization shall promptly refund all premiums less any claims paid.

Historical Notes

Derived from Volume 21, Issue 23, eff. July 1, 2005; amended, Virginia Register Volume 27, Issue 25, eff. September 1, 2011; Volume 31, Issue 03, eff. January 1, 2015.

Statutory Authority

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