1. If an employer is the policyholder of a policy of group life or health insurance which covers his or her employees, the employer shall notify the employees of his or her inability to pay a premium when due or of his or her intention to stop paying premiums. The notice must be:

(a) Given at least 10 days before the coverage will cease; and

(b) Conspicuously posted at the place of employment or given in another manner which ensures that all employees will receive the information.

2. In addition to any other remedy or penalty provided in this chapter, an employer is liable to an employee for any money deducted from the employee’s wages for the payment of premiums on a policy of group life or health insurance if the money was not so used.

3. In addition to any other remedy or penalty provided in this chapter, if:

(a) An employer knowingly and willfully stops paying premiums on a policy of group life or health insurance and fails to give proper and timely notice to his or her employees pursuant to subsection 1; and

(b) One or more of the employees, after coverage under the policy ceases and before they are given notice that the employer has stopped paying premiums, incur claims for benefits which those employees would have received under the policy had their coverage not ceased,

the employer is liable to those employees for the amount of the claims incurred, except that the employer’s total liability for all such claims combined must not exceed the amount of the premiums, calculated on a monthly basis, that the employer would have been required to pay under the policy to provide coverage for those employees during the period in which the claims were incurred by the employees.

4. If the Labor Commissioner brings an action pursuant to subsection 3 against an employer on behalf of the employees, any money recovered by the Labor Commissioner must be distributed on a pro rata basis among the employees who have claims against the employer, except that no employee may recover more than the total amount of all claims that the employee has against the employer. If the amount of money recovered by the Labor Commissioner exceeds the total amount of all claims from all employees, the excess amount must be deposited in the State General Fund.

(Added to NRS by 1983, 1890; A 1985, 1062; 2005, 203)