ORS 652.710: Fees collected by employer for medical care contracts are trust funds; priority on liquidation; civil penalty; rules.

(1) All moneys collected by an employer from employees or retained from their wages for the purpose of providing for or furnishing to such employees medical and surgical attention, hospital care, X-rays, ambulance, nursing or any related service or care contingent upon sickness or injury pursuant to a contract are trust funds and shall be placed and kept in separate accounts by the employer and shall promptly be paid over to the contractor. Such funds shall in no event become a part of the assets of the employer. (2) If the employer fails to place and keep such funds in separate accounts and pay them over to the contractor or if the funds become commingled with the funds of the employer and the employer becomes bankrupt, insolvent or goes through voluntary or involuntary liquidation, or if a receiver is appointed to operate or liquidate the affairs of the employer, the funds not paid to the contractor shall be entitled to the same preference as given to claims of the State Accident Insurance Fund Corporation, as provided in ORS 656.562. (3) On and after July 1, 1992, when an employer that is a group health insurance policyholder subject to the provisions of ORS 743B.320 receives notice that the group health insurance policy is terminated by the insurer and the employer does not replace coverage with any other group health insurance policy, the employer shall notify all employees who were covered under the terminated group policy. The employer’s notification to the employees shall: (a) Explain the employee’s rights regarding continuation or conversion of coverage under state and federal law; and (b) Be delivered to each employee in person or to the employee’s home address as recorded in the employer’s records not later than 10 working days after the receipt of notice from the insurer pursuant to ORS 743B.320 (3) to (5). (4) In addition to any other penalty provided by law, the Commissioner of the Bureau of Labor and Industries may assess a civil penalty not to exceed $1,000 for each violation of subsection (1) or (3) of this section. (5) Civil penalties under this section shall be imposed as provided in ORS 183.745. (6) All sums collected as penalties pursuant to this section shall be first applied toward reimbursement of the costs incurred in determining the violations, conducting hearings under this section and assessing and collecting such penalties. The remainder, if any, of the sums collected as penalties pursuant to this section shall be paid over by the commissioner to the Department of State Lands for the benefit of the Common School Fund of this state. The department shall issue a receipt for the money to the commissioner. (7) The Commissioner of the Bureau of Labor and Industries may adopt rules reasonably necessary for the administration of this section. [Formerly 655.130; 1991 c.673 §1; 1991 c.734 §114; 2001 c.943 §15]