Virginia Code 38.2-3542: Notice to employees upon termination of coverage; penalty for failure to remit funds.
A. Any employer who (i) assumes part or all of the cost of providing group accident and sickness insurance or a group health services plan or group health care plan for his employees under a group insurance policy or subscription contract or other evidence of coverage; (ii) provides a facility for deducting the full amount of the premium from employees’ salaries and remitting such premium to the insurer, health services plan, or health maintenance organization; or (iii) provides for health and medical care or reimbursement of medical expenses for his employees as a self-insurer, shall give written notice to participating employees in the event of termination or upon the receipt of notice of termination of any such policy, contract, coverage, or self-insurance not later than fifteen days after the termination of a self-insured plan or receipt of the notice of termination required by subsection C of this section.
Attorney's Note
Under the Virginia Code, punishments for crimes depend on the classification. In the case of this section:| Class | Prison | Fine |
|---|---|---|
| Class 1 misdemeanor | up to 12 months | up to $2,500 |
Terms Used In Virginia Code 38.2-3542
- Accident and sickness insurance: means insurance against loss resulting from sickness, or from bodily injury or death by accident or accidental means, or from a combination of any or all of these perils. See Virginia Code 38.2-109
- Contract: A legal written agreement that becomes binding when signed.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Health services plan: means any arrangement for offering or administering health services or similar or related services by a corporation licensed under Virginia Code 38.2-100
- Insurer: means an insurance company. See Virginia Code 38.2-100
B. Any employer who collects from his employees or covers any part of the cost of any of the policies, contracts, or coverages specified in subsection A of this section and who knowingly fails to remit to the insurer or plan such funds required to maintain coverage in accordance with the policy or contract provisions under which the employees are covered shall be guilty of a Class 1 misdemeanor and shall be subject to civil suit for any medical expenses the employee may become liable for as a result of the employer letting such coverage be terminated.
C. In the event the coverages specified in subsection A of this section are terminated due to nonpayment of premium by the employer, no such coverages shall be terminated by an insurer, health services plan, health maintenance organization or health insurance issuer as defined in § 38.2-3431 with respect to a covered individual unless and until the employer has been provided with a written or printed notice of termination, including a specific date, not less than fifteen days from the date of such notice, by which coverage will terminate if overdue premium is not paid. Coverage shall not be permitted to terminate for at least fifteen days after such notice has been mailed. Each insurer, health services plan, or health maintenance organization shall make reimbursement on all valid claims for services incurred prior to the date coverage is terminated.
1982, c. 586, § 38.1-356.01; 1986, cc. 251, 562; 1990, c. 301; 1999, c. 276.