Several unrelated residents organize an association whose only activity is collecting dues to purchase group health coverage at group rates. A producer asks whether this qualifies as an eligible group in Virginia. What is the correct analysis under Va. Code § 38.2-3521.1?

Why D is correct

Va. Code § 38.2-3521.1 recognizes groups with genuine substance — employer-employee relationships, labor unions, and associations that meet the statutory criteria — not entities contrived purely to obtain group pricing. An association whose sole activity is collecting dues to buy coverage fails the bona fide test, so the producer cannot treat it as an eligible group. The distinction matters in practice because selling group coverage to a nonqualifying entity exposes the arrangement to challenge by the Virginia Bureau of Insurance.

Why the other options are wrong

• A) Automatic qualification for any dues collector misreads Va. Code § 38.2-3521.1, which demands a recognized group with genuine purpose.
• B) Size does not cure the absence of bona fide status; the nature of the group controls eligibility.
• C) This overstates the rule — unions and qualifying associations can sponsor group coverage; the failure here is the contrived insurance-only purpose.

Memory hook

Built just to buy insurance? Not a group — a scheme.