Va. Code Ann. § 38.2-3405

Certain subrogation provisions and limitations upon recovery in hospital, medical, etc., policies forbidden; limitations on disclosure of medical treatment options prohibited

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A. No insurance contract providing hospital, medical, surgical and similar or related benefits, and no subscription contract or health services plan delivered or issued for delivery or providing for payment of benefits to or on behalf of persons residing in or employed in this Commonwealth shall contain any provision providing for subrogation of any person's right to recovery for personal injuries from a third person.

B. No such contract, subscription contract or health services plan shall contain any provision requiring the beneficiary of any such contract or plan to sign any agreement to pay back to any company issuing such a contract or creating a health services plan any benefits paid pursuant to the terms of such contract or plan from the proceeds of a recovery by such a beneficiary from any other source; provided, that this provision shall not prohibit an exclusion of benefits paid or payable under workers' compensation laws or federal or state programs, nor shall this provision prohibit coordination of benefits provisions when there are two or more such accident and sickness insurance contracts or plans providing for the payment of the same benefits. Coordination of benefits provisions may not operate to reduce benefits because of any benefits paid, payable, or provided by any liability insurance contract or any benefits paid, payable, or provided by any medical expense or medical payments insurance provided in conjunction with liability coverage.

C. No insurance contract providing hospital, medical, surgical and similar or related benefits, and no subscription contract or health services plan delivered or issued for delivery or providing for payment of benefits to or on behalf of persons residing in or employed in this Commonwealth shall contain any provision limiting, restricting, or prohibiting a physician from disclosing fully all medical treatment options to patients whether or not such treatment options are (i) experimental or covered services, (ii) services that the health insurer will not authorize, or (iii) the costs of the treatment will be borne by the health insurer or the patient to facilitate an informed decision by the patient, if the physician determines that such an option is in the best interest of the patient. For the purposes of this subsection, "medical treatment options" means any alternative or experimental therapeutic, psychiatric, medical treatment or procedure, health care service, drug, or remedy.

D. Whenever benefits paid or payable under workers' compensation are excluded from coverage under the terms of any such contract, subscription contract or health services plan, the issuer thereof shall not exclude coverage for any medical condition pursuant to such exclusion if (i) an award of the Workers' Compensation Commission pursuant to § 65.2-704 denies compensation benefits relating to such medical condition and no request for review of such award is made pursuant to and within the time prescribed by § 65.2-705 or (ii) an award of the Workers' Compensation Commission, after review by the full Commission pursuant to § 65.2-705, denies compensation benefits relating to such medical condition. Following the entry of a workers' compensation award pursuant to clause (i) or (ii) having the effect of prohibiting the application of any such exclusion, the issuer shall immediately provide coverage for such medical condition to the extent otherwise covered under the contract, subscription contract or health services plan. If, upon appeal to the Court of Appeals or the Supreme Court, such medical condition is held to be compensable under the Virginia Workers' Compensation Act (Title 65.2), the issuer may recover from the applicable employer or workers' compensation insurance carrier the costs of coverage for medical conditions found to be compensable under the Act.

1973, c. 28, § 38.1-342.2; 1979, c. 341; 1986, c. 562; 1988, c. 840; 1989, c. 487; 1994, c. 609; 1995, c. 68; 2004, c. 675.

Notes of Decisions

Cited in 19 cases (5 in the last 5 years), 1988–2023 · leading case: Whitlinger v. Continental Casualty Co.

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Whitlinger v. Continental Casualty Co. (2001) vaed · cites it 55× “38 payment to Continental in 1998, after receipt of the lump-sum Social Security award for past, not future, disability benefits, was unlawful under Virginia’s an-tisubrogation statute, Va.Code Ann. § 38.2-3405, as well as Va.Code Ann.”

Wal-Mart Stores, Inc. v. Carpenter (In Re Carpenter) (2000) vaeb · cites it 4× “Wal-Mart asserts that it is entitled to such a lien notwithstanding Virginia Code § 38.2-3405, which prohibits the enforcement of *43 subrogation and reimbursement provisions contained within a health insurance contract.”

Wal-Mart Stores, Inc. v. Carpenter (In Re Carpenter) (2000) vaed · cites it 4× “2d 356 (1990), the bankruptcy court first ruled that Virginia’s anti-subrogation law, see Va.Code Ann. § 38.2-3405 (Michie 1999), is preempted by ERISA and that the subrogation and reimbursement clause of the Plan is therefore enforceable.”

Virginia Municipal Group Self-Insurance v. Crawford (2004) vaccsalem · cites it 4× “In fact, two *245 Virginia statutes enacted by the General Assembly, Virginia Code § 38.2-3405(A) and Virginia Code § 38.”

Berczek v. Erie Insurance Group (2000) va · cites it 2× “Moreover, no rights of the insurer were cut off or placed in jeopardy by the insured’s settlement and release of the tortfeasor because subrogation of medical expense payments is prohibited in Virginia by Code § 38.2-3405(A). Furthermore, a medical expense claimant under these…”

Group Hospitalization Medical Service, Inc. v. Smith (1988) va · cites it 4× “1985) (subsequently amended, now Code § 38.2-3405). As a part of its compensation “package,” Fairfax County, a self-insurer, provided its employees with a health care plan through an agency contract it had with Group Hospitalization Medical Service, Inc.”

In re Neal (2004) vawb · cites it 3× “In considering the language used in this District Court’s opinion it is important to note that most of the opinion dealt with an interpretation of Va. Code § 38.2-3405, which dealt with a particular type of “accident and sickness insurance” policy, not to all such policies, and…”

Smith v. Life Insurance Co. of North America (2006) gand “at 933 (citing Va Code Ann. § 38.2-3405 (1999 Rep. Vol. & 2000 Cum.”

State Farm Mutual Automobile Insurance v. Smith (2004) vawd · cites it 2× “Va.Code Ann. § 38.2-3405(A) (Michie Supp.”

PRC, Inc. v. O'Bryan (1998) vaccfairfax · cites it 11× “ERISA Pre-Emption of State Law O’Bryan first claims that the Reimbursement Agreement is invalid under Va. Code Ann. § 38.2-3405 . That statute provides, in part: A.”

Kenny James Slusser v. Commonwealth of Virginia (2022) vactapp · cites it 3× “Virginia prohibits subrogation when an insurer pays hospital and medical benefits under a policy covering personal injuries caused by third persons, Code § 38.2-3405; and also when an insurer pays benefits for bodily-injury and property-damage claims under a…”

Michael Brown v. Timothy L. Kirkpatrick (2023) vactapp · cites it 2× “2 (codified as amended at Code § 38.2-3405). The statute prohibited subrogation provisions in medical expenses paid from health insurance plans.”

Show all 19 citing cases →

— Va. Code Ann. § 38.2-3405(A) — 5 cases

Virginia Municipal Group Self-Insurance v. Crawford (2004) vaccsalem “In fact, two *245 Virginia statutes enacted by the General Assembly, Virginia Code § 38.2-3405(A) and Virginia Code § 38.”

Berczek v. Erie Insurance Group (2000) va “Moreover, no rights of the insurer were cut off or placed in jeopardy by the insured’s settlement and release of the tortfeasor because subrogation of medical expense payments is prohibited in Virginia by Code § 38.2-3405(A). Furthermore, a medical expense claimant under these…”

State Farm Mutual Automobile Insurance v. Smith (2004) vawd “Va.Code Ann. § 38.2-3405(A) (Michie Supp.”

Whitlinger v. Continental Casualty Co. (2001) vaed “38 payment to Continental in 1998, after receipt of the lump-sum Social Security award for past, not future, disability benefits, was unlawful under Virginia’s an-tisubrogation statute, Va.Code Ann. § 38.2-3405, as well as Va.Code Ann.”

Ditkoff v. Larson (1994) vaccfairfax

— Va. Code Ann. § 38.2-3405(B) — 1 case

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