2006 Code of Virginia § 38.2-3542 - Notice to employees upon termination of coverage; penalty for failure to remit funds

38.2-3542. Notice to employees upon termination of coverage; penalty forfailure to remit funds.

A. Any employer who (i) assumes part or all of the cost of providing groupaccident and sickness insurance or a group health services plan or grouphealth care plan for his employees under a group insurance policy orsubscription contract or other evidence of coverage; (ii) provides a facilityfor deducting the full amount of the premium from employees' salaries andremitting such premium to the insurer, health services plan, or healthmaintenance organization; or (iii) provides for health and medical care orreimbursement of medical expenses for his employees as a self-insurer, shallgive written notice to participating employees in the event of termination orupon the receipt of notice of termination of any such policy, contract,coverage, or self-insurance not later than fifteen days after the terminationof a self-insured plan or receipt of the notice of termination required bysubsection C of this section.

B. Any employer who collects from his employees or covers any part of thecost of any of the policies, contracts, or coverages specified in subsectionA of this section and who knowingly fails to remit to the insurer or plansuch funds required to maintain coverage in accordance with the policy orcontract provisions under which the employees are covered shall be guilty ofa Class 1 misdemeanor and shall be subject to civil suit for any medicalexpenses the employee may become liable for as a result of the employerletting such coverage be terminated.

C. In the event the coverages specified in subsection A of this section areterminated due to nonpayment of premium by the employer, no such coveragesshall be terminated by an insurer, health services plan, health maintenanceorganization or health insurance issuer as defined in 38.2-3431 withrespect to a covered individual unless and until the employer has beenprovided with a written or printed notice of termination, including aspecific date, not less than fifteen days from the date of such notice, bywhich coverage will terminate if overdue premium is not paid. Coverage shallnot be permitted to terminate for at least fifteen days after such notice hasbeen mailed. Each insurer, health services plan, or health maintenanceorganization shall make reimbursement on all valid claims for servicesincurred prior to the date coverage is terminated.

(1982, c. 586, 38.1-356.01; 1986, cc. 251, 562; 1990, c. 301; 1999, c. 276.)