State RegulationsVA specificDifficulty 2/5
Under Virginia's mini-COBRA statute (Va. Code § 38.2-3541), what premium may be charged for continuation coverage?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Va. Code § 38.2-3541 fixes the continuation premium at the group rate plus an administrative fee of up to 2%. Individual underwriting of the continuing person is not permitted — the price is anchored to what the group pays, with only the modest administrative addition allowed by statute. This protects departing employees from being priced out of continuation coverage while letting the insurer or employer recover handling costs, a balance the Virginia Bureau of Insurance oversees.
Why the other options are wrong
- A) Individually underwritten pricing is not permitted for continuation coverage; Va. Code § 38.2-3541 ties the premium to the group rate.
- B) The statute does permit an administrative addition; the premium is not limited to the exact amount active employees pay.
- C) The permitted addition is an administrative fee of up to 2%, not a 20% surcharge.
Memory hook
Group rate plus a 2% handling slice — no underwriting, no doubling.