CODE OF VIRGINIA

RESCISSIONS (§ 38.2-3441)

A. Notwithstanding any provision of § 38.2-508.5 or any other section of this
title to the contrary, a health carrier shall not rescind coverage under a
health benefit plan after an individual is covered under the plan unless the
individual or a person seeking coverage on behalf of the individual performs an
act, practice, or omission that constitutes fraud, or the individual makes an
intentional misrepresentation of material fact, as prohibited by the terms of
the plan.

B. A health carrier shall provide at least 30 days’ advance written notice
or electronic notice to any covered person who would be affected by the proposed
rescission of coverage before coverage under the plan may be rescinded,
regardless of whether the rescission applies to the entire group or only to an
individual within the group. Such notice shall at a minimum contain:

   1.  Clear identification of the alleged fraudulent act, practice, or omission
   or the intentional misrepresentation of material fact;

   2.  An explanation as to why the act, practice, or omission was fraudulent or
   was an intentional misrepresentation of a material fact;

   3.  Notice that the covered person or the covered person’s authorized
   representative, prior to the date the advance notice of the proposed
   rescission ends, may immediately file an internal appeal to request a
   reconsideration of the rescission;

   4.  A description of the health carrier’s internal appeal process for
   rescissions, including any time limits applicable to those procedures; and

   5.  The date when the advance notice ends and the date back to which the
   coverage will be rescinded.

C. The provisions of this section apply regardless of any applicable
contestability period.

D. This section shall apply to any health carrier providing individual or group
health insurance coverage, including any grandfathered plan.

HISTORY: 2011, c. 882.