Sec. 23. (a) This section applies when the employment of an individual by an employer that participates in a medical care savings account program is terminated.

     (b) If the former employer is not informed, within ninety (90) days after the former employee‘s final day of employment, of the name and address of an account administrator to which the former employer is transferring the former employee’s medical care savings account under section 21 of this chapter, the former employer shall pay the money in the former employee’s medical care savings account to the former employee under subsection (d).

     (c) If:

(1) the former employee, under section 22(2) of this chapter, requests in writing that the former employer’s account administrator remain the administrator of the individual’s medical care savings account; and

(2) the account administrator does not agree to retain the account;

the former employer shall, within ninety (90) days after the former employee’s final day of employment, pay the money in the former employee’s medical care savings account to the former employee under subsection (d).

     (d) An employer that is required under this section to pay the money in a former employee’s medical care savings account to the former employee shall mail to the former employee, at the former employee’s last known address, a check for the balance in the account on the ninety-first day after the employee’s final day of employment.

     (e) Except as provided in sections 11(b) and 11.5 of this chapter, money that is paid to a former employee under subsection (d):

(1) is subject to taxation under IC 6-3-1 through IC 6-3-7 as income of the individual; but

(2) is not subject to the penalty referred to in section 17(c)(2) of this chapter.

As added by P.L.92-1995, SEC.2 and P.L.93-1995, SEC.2. Amended by P.L.122-2016, SEC.10.