H.B. 20 Enrolled

1

AMENDMENTS TO HEALTH INSURANCE
2 COVERAGE IN STATE CONTRACTS
3 2010 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: James A. Dunnigan
6 Senate Sponsor: Gene Davis
7
8 LONG TITLE
9 General Description:
10 This bill amends provisions related to the requirement that contractors with certain
11 state entities must provide qualified health insurance to their employees and the
12 dependents of the employees who work or reside in the state.
13 Highlighted Provisions:
14 This bill:
15 . clarifies that the application of a waiting period for health insurance may not
16 exceed the first of the month following 90 days of the date of hire;
17 . clarifies that the qualified health insurance coverage must be offered to employees
18 and dependents who work or reside in the state;
19 . clarifies that the qualified health insurance coverage that must be offered is a
20 minimum standard and an employer may offer greater coverage;
21 . amends the definition of qualified health insurance coverage to clarify the
22 standards;
23 . amends the enforcement provisions to provide protections for good faith
24 compliance; and
25 . clarifies how an employer offering a defined contribution arrangement may comply
26 with state contract requirements.
27 Monies Appropriated in this Bill:
28 None
29 Other Special Clauses:

30 None
31 Utah Code Sections Affected:
32 AMENDS:
33 17B-2a-818.5, as enacted by Laws of Utah 2009, Chapter 13
34 19-1-206, as enacted by Laws of Utah 2009, Chapter 13
35 63A-5-205, as last amended by Laws of Utah 2009, Chapter 13
36 63C-9-403, as enacted by Laws of Utah 2009, Chapter 13
37 72-6-107.5, as enacted by Laws of Utah 2009, Chapter 13
38 79-2-404, as enacted by Laws of Utah 2009, Chapter 13
39 ENACTS:
40 31A-30-209, Utah Code Annotated 1953
41
42 Be it enacted by the Legislature of the state of Utah:
43 Section 1. Section 17B-2a-818.5 is amended to read:
44 17B-2a-818.5. Contracting powers of public transit districts -- Health insurance
45 coverage.
46 (1) For purposes of this section:
47 (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
48 34A-2-104 who:
49 (i) works at least 30 hours per calendar week; and
50 (ii) meets employer eligibility waiting requirements for health care insurance which
51 may not exceed the first day of the calendar month following 90 days from the date of hire.
52 (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
53 (c) "Qualified health insurance coverage" means [a health benefit plan that] at the time
54 the contract is entered into or renewed:
55 [(i) (A) provides coverage that is actuarially equivalent to the current benefit plan
56 determined by the Children's Health Insurance Program under Section 26-40-106 ; and]
57 [(B) under which the employer pays at least 50% of the premium for the employee and

58 the dependents of the employee;]
59 [(ii) (A) is a federally qualified high deductible health plan that has:]
60 [(I) the lowest deductible permitted for a federally qualified high deductible health
61 plan; and]
62 [(II) an out of pocket maximum that does not exceed three times the amount of the
63 annual deductible; and]
64 [(B) under which the employer pays 75% of the premium for the employee and the
65 dependents of the employee; or]
66 [(iii) (A) provides coverage that is actuarially equivalent to 75% of the benefit plan
67 determined under Subsection (1)(c)(i); and]
68 [(B) under which the employer pays at least 75% of the premium of the employee and
69 the dependents of the employee.]
70 (i) a health benefit plan and employer contribution level with a combined actuarial
71 value at least actuarially equivalent to the combined actuarial value of the benchmark plan
72 determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a),
73 and a contribution level of 50% of the premium for the employee and the dependents of the
74 employee who reside or work in the state, in which:
75 (A) the employer pays at least 50% of the premium for the employee and the
76 dependents of the employee who reside or work in the state; and
77 (B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):
78 (I) rather that the benchmark plan's deductible, and the benchmark plan's
79 out-of-pocket maximum based on income levels:
80 (Aa) the deductible is $750 per individual and $2,250 per family; and
81 (Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
82 (II) dental coverage is not required; and
83 (III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do
84 not apply; or
85 (ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a

86 deductible that is either:
87 (I) the lowest deductible permitted for a federally qualified high deductible health
88 plan; or
89 (II) a deductible that is higher than the lowest deductible permitted for a federally
90 qualified high deductible health plan, but includes an employer contribution to a health
91 savings account in a dollar amount at least equal to the dollar amount difference between the
92 lowest deductible permitted for a federally qualified high deductible plan and the deductible
93 for the employer offered federally qualified high deductible plan;
94 (B) an out-of-pocket maximum that does not exceed three times the amount of the
95 annual deductible; and
96 (C) under which the employer pays 75% of the premium for the employee and the
97 dependents of the employee who work or reside in the state.
98 (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
99 (2) (a) Except as provided in Subsection (3), this section applies to [all contracts] a
100 design or construction contract entered into by the public transit district on or after July 1,
101 2009, [if:] and to a prime contractor or to a subcontractor in accordance with Subsection
102 (2)(b).
103 [(a) the contract is for design or construction; and]
104 (b) (i) A prime contractor is subject to this section if the prime contract is in the
105 amount of $1,500,000 or greater[; or].
106 (ii) A subcontractor is subject to this section if a subcontract is in the amount of
107 $750,000 or greater.
108 (3) This section does not apply if:
109 (a) the application of this section jeopardizes the receipt of federal funds;
110 (b) the contract is a sole source contract; or
111 (c) the contract is an emergency procurement.
112 (4) (a) This section does not apply to a change order as defined in Section 63G-6-102 ,
113 or a modification to a contract, when the contract does not meet the initial threshold required

114 by Subsection (2).
115 (b) A person who intentionally uses change orders or contract modifications to
116 circumvent the requirements of Subsection (2) is guilty of an infraction.
117 (5) (a) A contractor subject to Subsection (2) shall demonstrate to the public transit
118 district that the contractor has and will maintain an offer of qualified health insurance
119 coverage for the contractor's employees and the employee's dependents during the duration of
120 the contract.
121 (b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
122 shall demonstrate to the public transit district that the subcontractor has and will maintain an
123 offer of qualified health insurance coverage for the subcontractor's employees and the
124 employee's dependents during the duration of the contract.
125 (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
126 the duration of the contract is subject to penalties in accordance with [administrative rules] an
127 ordinance adopted by the public transit district under Subsection (6).
128 (B) A contractor is not subject to penalties for the failure of a subcontractor to meet
129 the requirements of Subsection (5)(b).
130 (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
131 the duration of the contract is subject to penalties in accordance with [administrative rules] an
132 ordinance adopted by the public transit district under Subsection (6).
133 (B) A subcontractor is not subject to penalties for the failure of a contractor to meet
134 the requirements of Subsection (5)(a).
135 (6) The public transit district shall adopt [administrative rules] ordinances:
136 [(a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;]
137 [(b)] (a) in coordination with:
138 (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
139 (ii) the Department of Natural Resources in accordance with Section 79-2-404 ;
140 (iii) the State Building Board in accordance with Section 63A-5-205 ;
141 (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ; and

142 (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
143 [(vi) the Legislature's Administrative Rules Review Committee; and]
144 [(c)] (b) which establish:
145 (i) the requirements and procedures a contractor must follow to demonstrate to the
146 public transit district compliance with this section which shall include:
147 (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a)
148 or (b) more than twice in any 12-month period; and
149 (B) that the actuarially equivalent determination required in Subsection (1) is met by
150 the contractor if the contractor provides the department or division with a written statement of
151 actuarial equivalency from either:
152 (I) the Utah Insurance Department; [or]
153 (II) an actuary selected by the contractor or the contractor's insurer; [and] or
154 (III) an underwriter who is responsible for developing the employer group's premium
155 rates;
156 (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
157 violates the provisions of this section, which may include:
158 (A) a three-month suspension of the contractor or subcontractor from entering into
159 future contracts with the public transit district upon the first violation;
160 (B) a six-month suspension of the contractor or subcontractor from entering into
161 future contracts with the public transit district upon the second violation;
162 (C) an action for debarment of the contractor or subcontractor in accordance with
163 Section 63G-6-804 upon the third or subsequent violation; and
164 (D) monetary penalties which may not exceed 50% of the amount necessary to
165 purchase qualified health insurance coverage for employees and dependents of employees of
166 the contractor or subcontractor who were not offered qualified health insurance coverage
167 during the duration of the contract[.]; and
168 (iii) a website on which the district shall post the benchmark for the qualified health
169 insurance coverage identified in Subsection (1)(c)(i).

170 (7) (a) (i) In addition to the penalties imposed under Subsection (6)[(c)](b)(ii), a
171 contractor or subcontractor who intentionally violates the provisions of this section shall be
172 liable to the employee for health care costs [not covered by insurance.] that would have been
173 covered by qualified health insurance coverage.
174 (ii) An employer has an affirmative defense to a cause of action under Subsection
175 (7)(a)(i) if:
176 (A) the employer relied in good faith on a written statement of actuarial equivalency
177 provided by an:
178 (I) actuary; or
179 (II) underwriter who is responsible for developing the employer group's premium rates;
180 or
181 (B) a department or division determines that compliance with this section is not
182 required under the provisions of Subsection (3) or (4).
183 (b) An employee has a private right of action only against the employee's employer to
184 enforce the provisions of this Subsection (7).
185 (8) Any penalties imposed and collected under this section shall be deposited into the
186 Medicaid Restricted Account created in Section 26-18-402 .
187 (9) The failure of a contractor or subcontractor to provide qualified health insurance
188 coverage as required by this section:
189 (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
190 or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
191 Legal and Contractual Remedies; and
192 (b) may not be used by the procurement entity or a prospective bidder, offeror, or
193 contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
194 or construction.
195 Section 2. Section 19-1-206 is amended to read:
196 19-1-206. Contracting powers of department -- Health insurance coverage.
197 (1) For purposes of this section:

198 (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
199 34A-2-104 who:
200 (i) works at least 30 hours per calendar week; and
201 (ii) meets employer eligibility waiting requirements for health care insurance which
202 may not exceed the first day of the calendar month following 90 days from the date of hire.
203 (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
204 (c) "Qualified health insurance coverage" means [a health benefit plan that] at the time
205 the contract is entered into or renewed:
206 [(i) (A) provides coverage that is actuarially equivalent to the current benefit plan
207 determined by the Children's Health Insurance Program under Section 26-40-106 ; and]
208 [(B) under which the employer pays at least 50% of the premium for the employee and
209 the dependents of the employee;]
210 [(ii) (A) is a federally qualified high deductible health plan that has:]
211 [(I) the lowest deductible permitted for a federally qualified high deductible health
212 plan; and]
213 [(II) an out of pocket maximum that does not exceed three times the amount of the
214 annual deductible; and]
215 [(B) under which the employer pays 75% of the premium for the employee and the
216 dependents of the employee; or]
217 [(iii) (A) provides coverage that is actuarially equivalent to 75% of the benefit plan
218 determined under Subsection (1)(c)(i); and]
219 [(B) under which the employer pays at least 75% of the premium of the employee and
220 the dependents of the employee.]
221 (i) a health benefit plan and employer contribution level with a combined actuarial
222 value at least actuarially equivalent to the combined actuarial value of the benchmark plan
223 determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a),
224 and a contribution level of 50% of the premium for the employee and the dependents of the
225 employee who reside or work in the state, in which:

226 (A) the employer pays at least 50% of the premium for the employee and the
227 dependents of the employee who reside or work in the state; and
228 (B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):
229 (I) rather that the benchmark plan's deductible, and the benchmark plan's
230 out-of-pocket maximum based on income levels:
231 (Aa) the deductible is $750 per individual and $2,250 per family; and
232 (Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
233 (II) dental coverage is not required; and
234 (III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do
235 not apply; or
236 (ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
237 deductible that is either:
238 (I) the lowest deductible permitted for a federally qualified high deductible health
239 plan; or
240 (II) a deductible that is higher than the lowest deductible permitted for a federally
241 qualified high deductible health plan, but includes an employer contribution to a health
242 savings account in a dollar amount at least equal to the dollar amount difference between the
243 lowest deductible permitted for a federally qualified high deductible plan and the deductible
244 for the employer offered federally qualified high deductible plan;
245 (B) an out-of-pocket maximum that does not exceed three times the amount of the
246 annual deductible; and
247 (C) under which the employer pays 75% of the premium for the employee and the
248 dependents of the employee who work or reside in the state.
249 (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
250 (2) (a) Except as provided in Subsection (3), this section applies to [all contracts] a
251 design or construction contract entered into by or delegated to the department or a division or
252 board of the department on or after July 1, 2009, [if:] and to a prime contractor or
253 subcontractor in accordance with Subsection (2)(b).

254 [(a) the contract is for design or construction; and]
255 (b) (i) A prime contractor is subject to this section if the prime contract is in the
256 amount of $1,500,000 or greater[; or].
257 (ii) A subcontractor is subject to this section if a subcontract is in the amount of
258 $750,000 or greater.
259 (3) This section does not apply to contracts entered into by the department or a
260 division or board of the department if:
261 (a) the application of this section jeopardizes the receipt of federal funds;
262 (b) the contract or agreement is between:
263 (i) the department or a division or board of the department; and
264 (ii) (A) another agency of the state;
265 (B) the federal government;
266 (C) another state;
267 (D) an interstate agency;
268 (E) a political subdivision of this state; or
269 (F) a political subdivision of another state;
270 (c) the executive director determines that applying the requirements of this section to a
271 particular contract interferes with the effective response to an immediate health and safety
272 threat from the environment; or
273 (d) the contract is:
274 (i) a sole source contract; or
275 (ii) an emergency procurement.
276 (4) (a) This section does not apply to a change order as defined in Section 63G-6-102 ,
277 or a modification to a contract, when the contract does not meet the initial threshold required
278 by Subsection (2).
279 (b) A person who intentionally uses change orders or contract modifications to
280 circumvent the requirements of Subsection (2) is guilty of an infraction.
281 (5) (a) A contractor subject to Subsection (2) shall demonstrate to the executive

282 director that the contractor has and will maintain an offer of qualified health insurance
283 coverage for the contractor's employees and the employees' dependents during the duration of
284 the contract.
285 (b) If a subcontractor of the contractor is subject to Subsection (2), the contractor shall
286 demonstrate to the executive director that the subcontractor has and will maintain an offer of
287 qualified health insurance coverage for the subcontractor's employees and the employees'
288 dependents during the duration of the contract.
289 (c) (i) (A) A contractor who fails to comply with Subsection (5)(a) during the duration
290 of the contract is subject to penalties in accordance with administrative rules adopted by the
291 department under Subsection (6).
292 (B) A contractor is not subject to penalties for the failure of a subcontractor to meet
293 the requirements of Subsection (5)(b).
294 (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
295 the duration of the contract is subject to penalties in accordance with administrative rules
296 adopted by the department under Subsection (6).
297 (B) A subcontractor is not subject to penalties for the failure of a contractor to meet
298 the requirements of Subsection (5)(a).
299 (6) The department shall adopt administrative rules:
300 (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
301 (b) in coordination with:
302 (i) a public transit district in accordance with Section 17B-2a-818.5 ;
303 (ii) the Department of Natural Resources in accordance with Section 79-2-404 ;
304 (iii) the State Building Board in accordance with Section 63A-5-205 ;
305 (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
306 (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
307 (vi) the Legislature's Administrative Rules Review Committee; and
308 (c) which establish:
309 (i) the requirements and procedures a contractor must follow to demonstrate to the

310 public transit district compliance with this section which shall include:
311 (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a)
312 or (b) more than twice in any 12-month period; and
313 (B) that the actuarially equivalent determination required in Subsection (1) is met by
314 the contractor if the contractor provides the department or division with a written statement of
315 actuarial equivalency from either:
316 (I) the Utah Insurance Department [or];
317 (II) an actuary selected by the contractor or the contractor's insurer; [and] or
318 (III) an underwriter who is responsible for developing the employer group's premium
319 rates;
320 (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
321 violates the provisions of this section, which may include:
322 (A) a three-month suspension of the contractor or subcontractor from entering into
323 future contracts with the state upon the first violation;
324 (B) a six-month suspension of the contractor or subcontractor from entering into
325 future contracts with the state upon the second violation;
326 (C) an action for debarment of the contractor or subcontractor in accordance with
327 Section 63G-6-804 upon the third or subsequent violation; and
328 (D) notwithstanding Section 19-1-303 , monetary penalties which may not exceed 50%
329 of the amount necessary to purchase qualified health insurance coverage for an employee and
330 the dependents of an employee of the contractor or subcontractor who was not offered
331 qualified health insurance coverage during the duration of the contract[.]; and
332 (iii) a website on which the department shall post the benchmark for the qualified
333 health insurance coverage identified in Subsection (1)(c)(i).
334 (7) (a) (i) In addition to the penalties imposed under Subsection (6)(c), a contractor or
335 subcontractor who intentionally violates the provisions of this section shall be liable to the
336 employee for health care costs [not covered by insurance.] that would have been covered by
337 qualified health insurance coverage.

338 (ii) An employer has an affirmative defense to a cause of action under Subsection
339 (7)(a)(i) if:
340 (A) the employer relied in good faith on a written statement of actuarial equivalency
341 provided by:
342 (I) an actuary; or
343 (II) an underwriter who is responsible for developing the employer group's premium
344 rates; or
345 (B) the department determines that compliance with this section is not required under
346 the provisions of Subsection (3) or (4).
347 (b) An employee has a private right of action only against the employee's employer to
348 enforce the provisions of this Subsection (7).
349 (8) Any penalties imposed and collected under this section shall be deposited into the
350 Medicaid Restricted Account created in Section 26-18-402 .
351 (9) The failure of a contractor or subcontractor to provide qualified health insurance
352 coverage as required by this section:
353 (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
354 or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
355 Legal and Contractual Remedies; and
356 (b) may not be used by the procurement entity or a prospective bidder, offeror, or
357 contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
358 or construction.
359 Section 3. Section 31A-30-209 is enacted to read:
360 31A-30-209. State contract requirements -- Employer default plans.
361 (1) This section applies to an employer who is required to offer its employees a health
362 benefit plan as a condition of qualifying for a state contract under:
363 (a) Section 17B-2a-818.5 ;
364 (b) Section 19-1-206 ;
365 (c) Subsection 63A-5-205 (3);

366 (d) Section 63C-9-403 ;
367 (e) Section 72-6-107.5 ; and
368 (f) Section 79-2-404 .
369 (2) An employer described in Subsection (1) shall, when selecting the default plan
370 required in Section 31A-30-204 , select a default plan that is "qualified health insurance
371 coverage" as defined in the sections listed in Subsections (1)(a) through (f).
372 Section 4. Section 63A-5-205 is amended to read:
373 63A-5-205. Contracting powers of director -- Retainage -- Health insurance
374 coverage.
375 (1) As used in this section:
376 (a) "Capital developments" has the same meaning as provided in Section 63A-5-104 .
377 (b) "Capital improvements" has the same meaning as provided in Section 63A-5-104 .
378 (c) "Employee" means an "employee," "worker," or "operative" as defined in Section
379 34A-2-104 who:
380 (i) works at least 30 hours per calendar week; and
381 (ii) meets employer eligibility waiting requirements for health care insurance which
382 may not exceed the first day of the calendar month following 90 days from the date of hire.
383 (d) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
384 (e) "Qualified health insurance coverage" means [a health benefit plan that] at the time
385 the contract is entered into or renewed:
386 [(i) (A) provides coverage that is actuarially equivalent to the current benefit plan
387 determined by the Children's Health Insurance Program under Section 26-40-106 ; and]
388 [(B) under which the employer pays at least 50% of the premium for the employee and
389 the dependents of the employee;]
390 [(ii) (A) is a federally qualified high deductible health plan that has:]
391 [(I) the lowest deductible permitted for a federally qualified high deductible health
392 plan; and]
393 [(II) an out of pocket maximum that does not exceed three times the amount of the

394 annual deductible; and]
395 [(B) under which the employer pays 75% of the premium for the employee and the
396 dependents of the employee; or]
397 [(iii) (A) provides coverage that is actuarially equivalent to 75% of the benefit plan
398 determined under Subsection (1)(e)(i); and]
399 [(B) under which the employer pays at least 75% of the premium of the employee and
400 the dependents of the employee.]
401 (i) a health benefit plan and employer contribution level with a combined actuarial
402 value at least actuarially equivalent to the combined actuarial value of the benchmark plan
403 determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a),
404 and a contribution level of 50% of the premium for the employee and the dependents of the
405 employee who reside or work in the state, in which:
406 (A) the employer pays at least 50% of the premium for the employee and the
407 dependents of the employee who reside or work in the state; and
408 (B) for purposes of calculating actuarial equivalency under this Subsection (1)(e)(i):
409 (I) rather that the benchmark plan's deductible, and the benchmark plan's
410 out-of-pocket maximum based on income levels:
411 (Aa) the deductible is $750 per individual and $2,250 per family; and
412 (Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
413 (II) dental coverage is not required; and
414 (III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do
415 not apply; or
416 (ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
417 deductible that is either:
418 (I) the lowest deductible permitted for a federally qualified high deductible health
419 plan; or
420 (II) a deductible that is higher than the lowest deductible permitted for a federally
421 qualified high deductible health plan, but includes an employer contribution to a health

422 savings account in a dollar amount at least equal to the dollar amount difference between the
423 lowest deductible permitted for a federally qualified high deductible plan and the deductible
424 for the employer offered federally qualified high deductible plan;
425 (B) an out-of-pocket maximum that does not exceed three times the amount of the
426 annual deductible; and
427 (C) under which the employer pays 75% of the premium for the employee and the
428 dependents of the employee who work or reside in the state.
429 (f) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
430 (2) In accordance with Title 63G, Chapter 6, Utah Procurement Code, the director
431 may:
432 (a) subject to Subsection (3), enter into contracts for any work or professional services
433 which the division or the State Building Board may do or have done; and
434 (b) as a condition of any contract for architectural or engineering services, prohibit the
435 architect or engineer from retaining a sales or agent engineer for the necessary design work.
436 (3) (a) Except as provided in Subsection (3)(b), this Subsection (3) applies to all
437 design or construction contracts entered into by the division or the State Building Board on or
438 after July 1, 2009, [if] and:
439 [(i) the contract is for design or construction; and]
440 [(ii) (A)] (i) applies to a prime contractor if the prime contract is in the amount of
441 $1,500,000 or greater; [or] and
442 [(B) a] (ii) applies to a subcontractor if the subcontract is in the amount of $750,000
443 or greater.
444 (b) This Subsection (3) does not apply:
445 (i) if the application of this Subsection (3) jeopardizes the receipt of federal funds;
446 (ii) if the contract is a sole source contract;
447 (iii) if the contract is an emergency procurement; or
448 (iv) to a change order as defined in Section 63G-6-102 , or a modification to a contract,
449 when the contract does not meet the threshold required by Subsection (3)(a).

450 (c) A person who intentionally uses change orders or contract modifications to
451 circumvent the requirements of Subsection (3)(a) is guilty of an infraction.
452 (d) (i) A contractor subject to Subsection (3)(a) shall demonstrate to the director that
453 the contractor has and will maintain an offer of qualified health insurance coverage for the
454 contractor's employees and the employees' dependents.
455 (ii) If a subcontractor of the contractor is subject to Subsection (3)(a), the contractor
456 shall demonstrate to the director that the subcontractor has and will maintain an offer of
457 qualified health insurance coverage for the subcontractor's employees and the employees'
458 dependents.
459 (e) (i) (A) A contractor who fails to meet the requirements of Subsection (3)(d)(i)
460 during the duration of the contract is subject to penalties in accordance with administrative
461 rules adopted by the division under Subsection (3)(f).
462 (B) A contractor is not subject to penalties for the failure of a subcontractor to meet
463 the requirements of Subsection (3)(d)(ii).
464 (ii) (A) A subcontractor who fails to meet the requirements of Subsection (3)(d)(ii)
465 during the duration of the contract is subject to penalties in accordance with administrative
466 rules adopted by the division under Subsection (3)(f).
467 (B) A subcontractor is not subject to penalties for the failure of a contractor to meet
468 the requirements of Subsection (3)(d)(i).
469 (f) The division shall adopt administrative rules:
470 (i) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
471 (ii) in coordination with:
472 (A) the Department of Environmental Quality in accordance with Section 19-1-206 ;
473 (B) the Department of Natural Resources in accordance with Section 79-2-404 ;
474 (C) a public transit district in accordance with Section 17B-2a-818.5 ;
475 (D) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
476 (E) the Department of Transportation in accordance with Section 72-6-107.5 ; and
477 (F) the Legislature's Administrative Rules Review Committee; and

478 (iii) which establish:
479 (A) the requirements and procedures a contractor must follow to demonstrate to the
480 director compliance with this Subsection (3) which shall include:
481 (I) that a contractor will not have to demonstrate compliance with Subsection [(5)(a)
482 or (b)] (3)(d)(i) or (ii) more than twice in any 12-month period; and
483 (II) that the actuarially equivalent determination required in Subsection (1) is met by
484 the contractor if the contractor provides the department or division with a written statement of
485 actuarial equivalency from either:
486 (Aa) the Utah Insurance Department [or];
487 (Bb) an actuary selected by the contractor or the contractor's insurer; [and] or
488 (Cc) an underwriter who is responsible for developing the employer group's premium
489 rates;
490 (B) the penalties that may be imposed if a contractor or subcontractor intentionally
491 violates the provisions of this Subsection (3), which may include:
492 (I) a three-month suspension of the contractor or subcontractor from entering into
493 future contracts with the state upon the first violation;
494 (II) a six-month suspension of the contractor or subcontractor from entering into future
495 contracts with the state upon the second violation;
496 (III) an action for debarment of the contractor or subcontractor in accordance with
497 Section 63G-6-804 upon the third or subsequent violation; and
498 (IV) monetary penalties which may not exceed 50% of the amount necessary to
499 purchase qualified health insurance coverage for an employee and the dependents of an
500 employee of the contractor or subcontractor who was not offered qualified health insurance
501 coverage during the duration of the contract[.]; and
502 (C) a website on which the department shall post the benchmark for the qualified
503 health insurance coverage identified in Subsection (1)(e)(i).
504 (g) (i) In addition to the penalties imposed under Subsection (3)(f)(iii), a contractor or
505 subcontractor who intentionally violates the provisions of this section shall be liable to the

506 employee for health care costs [not covered by insurance.] that would have been covered by
507 qualified health insurance coverage.
508 (ii) An employer has an affirmative defense to a cause of action under Subsection
509 (3)(g)(i) if:
510 (A) the employer relied in good faith on a written statement of actuarial equivalency
511 provided by:
512 (I) an actuary; or
513 (II) an underwriter who is responsible for developing the employer group's premium
514 rates; or
515 (B) the department determines that compliance with this section is not required under
516 the provisions of Subsection (3)(b).
517 [(ii)] (iii) An employee has a private right of action only against the employee's
518 employer to enforce the provisions of this Subsection (3)(g).
519 (h) Any penalties imposed and collected under this section shall be deposited into the
520 Medicaid Restricted Account created by Section 26-18-402 .
521 (i) The failure of a contractor or subcontractor to provide qualified health insurance
522 coverage as required by this section:
523 (i) may not be the basis for a protest or other action from a prospective bidder, offeror,
524 or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
525 Legal and Contractual Remedies; and
526 (ii) may not be used by the procurement entity or a prospective bidder, offeror, or
527 contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
528 or construction.
529 (4) The judgment of the director as to the responsibility and qualifications of a bidder
530 is conclusive, except in case of fraud or bad faith.
531 (5) The division shall make all payments to the contractor for completed work in
532 accordance with the contract and pay the interest specified in the contract on any payments
533 that are late.

534 (6) If any payment on a contract with a private contractor to do work for the division
535 or the State Building Board is retained or withheld, it shall be retained or withheld and
536 released as provided in Section 13-8-5 .
537 Section 5. Section 63C-9-403 is amended to read:
538 63C-9-403. Contracting power of executive director -- Health insurance
539 coverage.
540 (1) For purposes of this section:
541 (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
542 34A-2-104 who:
543 (i) works at least 30 hours per calendar week; and
544 (ii) meets employer eligibility waiting requirements for health care insurance which
545 may not exceed the first of the calendar month following 90 days from the date of hire.
546 (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
547 (c) "Qualified health insurance coverage" means [a health benefit plan that] at the time
548 the contract is entered into or renewed:
549 [(i) (A) provides coverage that is actuarially equivalent to the current benefit plan
550 determined by the Children's Health Insurance Program under Section 26-40-106 ; and]
551 [(B) under which the employer pays at least 50% of the premium for the employee and
552 the dependents of the employee;]
553 [(ii) (A) is a federally qualified high deductible health plan that has:]
554 [(I) the lowest deductible permitted for a federally qualified high deductible health
555 plan; and]
556 [(II) an out of pocket maximum that does not exceed three times the amount of the
557 annual deductible; and]
558 [(B) under which the employer pays 75% of the premium for the employee and the
559 dependents of the employee; or]
560 [(iii) (A) provides coverage that is actuarially equivalent to 75% of the benefit plan
561 determined under Subsection (1)(c)(i); and]

562 [(B) under which the employer pays at least 75% of the premium of the employee and
563 the dependents of the employee.]
564 (i) a health benefit plan and employer contribution level with a combined actuarial
565 value at least actuarially equivalent to the combined actuarial value of the benchmark plan
566 determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a),
567 and a contribution level of 50% of the premium for the employee and the dependents of the
568 employee who reside or work in the state, in which:
569 (A) the employer pays at least 50% of the premium for the employee and the
570 dependents of the employee who reside or work in the state; and
571 (B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):
572 (I) rather that the benchmark plan's deductible, and the benchmark plan's
573 out-of-pocket maximum based on income levels:
574 (Aa) the deductible is $750 per individual and $2,250 per family; and
575 (Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
576 (II) dental coverage is not required; and
577 (III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do
578 not apply; or
579 (ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
580 deductible that is either:
581 (I) the lowest deductible permitted for a federally qualified high deductible health
582 plan; or
583 (II) a deductible that is higher than the lowest deductible permitted for a federally
584 qualified high deductible health plan, but includes an employer contribution to a health
585 savings account in a dollar amount at least equal to the dollar amount difference between the
586 lowest deductible permitted for a federally qualified high deductible plan and the deductible
587 for the employer offered federally qualified high deductible plan;
588 (B) an out-of-pocket maximum that does not exceed three times the amount of the
589 annual deductible; and

590 (C) under which the employer pays 75% of the premium for the employee and the
591 dependents of the employee who work or reside in the state.
592 (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
593 (2) (a) Except as provided in Subsection (3), this section applies to [all contracts] a
594 design or construction contract entered into by the board or on behalf of the board on or after
595 July 1, 2009, [if:] and to a prime contractor or a subcontractor in accordance with Subsection
596 (2)(b).
597 [(a) the contract is for design or construction; and]
598 (b) (i) A prime contractor is subject to this section if the prime contract is in the
599 amount of $1,500,000 or greater[; or].
600 (ii) A subcontractor is subject to this section if a subcontract is in the amount of
601 $750,000 or greater.
602 (3) This section does not apply if:
603 (a) the application of this section jeopardizes the receipt of federal funds;
604 (b) the contract is a sole source contract; or
605 (c) the contract is an emergency procurement.
606 (4) (a) This section does not apply to a change order as defined in Section 63G-6-102 ,
607 or a modification to a contract, when the contract does not meet the initial threshold required
608 by Subsection (2).
609 (b) A person who intentionally uses change orders or contract modifications to
610 circumvent the requirements of Subsection (2) is guilty of an infraction.
611 (5) (a) A contractor subject to Subsection (2) shall demonstrate to the executive
612 director that the contractor has and will maintain an offer of qualified health insurance
613 coverage for the contractor's employees and the employees' dependents during the duration of
614 the contract.
615 (b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
616 shall demonstrate to the executive director that the subcontractor has and will maintain an
617 offer of qualified health insurance coverage for the subcontractor's employees and the

618 employees' dependents during the duration of the contract.
619 (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
620 the duration of the contract is subject to penalties in accordance with administrative rules
621 adopted by the division under Subsection (6).
622 (B) A contractor is not subject to penalties for the failure of a subcontractor to meet
623 the requirements of Subsection (5)(b).
624 (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
625 the duration of the contract is subject to penalties in accordance with administrative rules
626 adopted by the department under Subsection (6).
627 (B) A subcontractor is not subject to penalties for the failure of a contractor to meet
628 the requirements of Subsection (5)(a).
629 (6) The department shall adopt administrative rules:
630 (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
631 (b) in coordination with:
632 (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
633 (ii) the Department of Natural Resources in accordance with Section 79-2-404 ;
634 (iii) the State Building Board in accordance with Section 63A-5-205 ;
635 (iv) a public transit district in accordance with Section 17B-2a-818.5 ;
636 (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
637 (vi) the Legislature's Administrative Rules Review Committee; and
638 (c) which establish:
639 (i) the requirements and procedures a contractor must follow to demonstrate to the
640 executive director compliance with this section which shall include:
641 (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a)
642 or (b) more than twice in any 12-month period; and
643 (B) that the actuarially equivalent determination required in Subsection (1) is met by
644 the contractor if the contractor provides the department or division with a written statement of
645 actuarial equivalency from either:

646 (I) the Utah Insurance Department [or];
647 (II) an actuary selected by the contractor or the contractor's insurer; [and] or
648 (III) an underwriter who is responsible for developing the employer group's premium
649 rates;
650 (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
651 violates the provisions of this section, which may include:
652 (A) a three-month suspension of the contractor or subcontractor from entering into
653 future contracts with the state upon the first violation;
654 (B) a six-month suspension of the contractor or subcontractor from entering into
655 future contracts with the state upon the second violation;
656 (C) an action for debarment of the contractor or subcontractor in accordance with
657 Section 63G-6-804 upon the third or subsequent violation; and
658 (D) monetary penalties which may not exceed 50% of the amount necessary to
659 purchase qualified health insurance coverage for employees and dependents of employees of
660 the contractor or subcontractor who were not offered qualified health insurance coverage
661 during the duration of the contract[.]; and
662 (iii) a website on which the department shall post the benchmark for the qualified
663 health insurance coverage identified in Subsection (1)(c)(i).
664 (7) (a) (i) In addition to the penalties imposed under Subsection (6)(c), a contractor or
665 subcontractor who intentionally violates the provisions of this section shall be liable to the
666 employee for health care costs [not covered by insurance.] that would have been covered by
667 qualified health insurance coverage.
668 (ii) An employer has an affirmative defense to a cause of action under Subsection
669 (7)(a)(i) if:
670 (A) the employer relied in good faith on a written statement of actuarial equivalency
671 provided by:
672 (I) an actuary; or
673 (II) an underwriter who is responsible for developing the employer group's premium

674 rates; or
675 (B) the department determines that compliance with this section is not required under
676 the provisions of Subsection (3) or (4).
677 (b) An employee has a private right of action only against the employee's employer to
678 enforce the provisions of this Subsection (7).
679 (8) Any penalties imposed and collected under this section shall be deposited into the
680 Medicaid Restricted Account created in Section 26-18-402 .
681 (9) The failure of a contractor or subcontractor to provide qualified health insurance
682 coverage as required by this section:
683 (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
684 or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
685 Legal and Contractual Remedies; and
686 (b) may not be used by the procurement entity or a prospective bidder, offeror, or
687 contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
688 or construction.
689 Section 6. Section 72-6-107.5 is amended to read:
690 72-6-107.5. Construction of improvements of highway -- Contracts -- Health
691 insurance coverage.
692 (1) For purposes of this section:
693 (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
694 34A-2-104 who:
695 (i) works at least 30 hours per calendar week; and
696 (ii) meets employer eligibility waiting requirements for health care insurance which
697 may not exceed the first day of the calendar month following 90 days from the date of hire.
698 (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
699 (c) "Qualified health insurance coverage" means [a health benefit plan that] at the time
700 the contract is entered into or renewed:
701 [(i) (A) provides coverage that is actuarially equivalent to the current benefit plan

702 determined by the Children's Health Insurance Program under Section 26-40-106 ; and]
703 [(B) under which the employer pays at least 50% of the premium for the employee and
704 the dependents of the employee;]
705 [(ii) (A) is a federally qualified high deductible health plan that has:]
706 [(I) the lowest deductible permitted for a federally qualified high deductible health
707 plan; and]
708 [(II) an out of pocket maximum that does not exceed three times the amount of the
709 annual deductible; and]
710 [(B) under which the employer pays 75% of the premium for the employee and the
711 dependents of the employee; or]
712 [(iii) (A) provides coverage that is actuarially equivalent to 75% of the benefit plan
713 determined under Subsection (1)(c)(i); and]
714 [(B) under which the employer pays at least 75% of the premium of the employee and
715 the dependents of the employee.]
716 (i) a health benefit plan and employer contribution level with a combined actuarial
717 value at least actuarially equivalent to the combined actuarial value of the benchmark plan
718 determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a),
719 and a contribution level of 50% of the premium for the employee and the dependents of the
720 employee who reside or work in the state, in which:
721 (A) the employer pays at least 50% of the premium for the employee and the
722 dependents of the employee who reside or work in the state; and
723 (B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):
724 (I) rather that the benchmark plan's deductible, and the benchmark plan's
725 out-of-pocket maximum based on income levels:
726 (Aa) the deductible is $750 per individual and $2,250 per family; and
727 (Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
728 (II) dental coverage is not required; and
729 (III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do

730 not apply; or
731 (ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
732 deductible that is either:
733 (I) the lowest deductible permitted for a federally qualified high deductible health
734 plan; or
735 (II) a deductible that is higher than the lowest deductible permitted for a federally
736 qualified high deductible health plan, but includes an employer contribution to a health
737 savings account in a dollar amount at least equal to the dollar amount difference between the
738 lowest deductible permitted for a federally qualified high deductible plan and the deductible
739 for the employer offered federally qualified high deductible plan;
740 (B) an out-of-pocket maximum that does not exceed three times the amount of the
741 annual deductible; and
742 (C) under which the employer pays 75% of the premium for the employee and the
743 dependents of the employee who work or reside in the state.
744 (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
745 (2) (a) Except as provided in Subsection (3), this section applies to [all] contracts
746 entered into by the department on or after July 1, 2009, for construction or design of highways
747 [if:] and to a prime contractor or to a subcontractor in accordance with Subsection (2)(b).
748 [(a)] (b) (i) A prime contractor is subject to this section if the prime contract is in the
749 amount of $1,500,000 or greater[; or].
750 [(b)] (ii) A subcontractor is subject to this section if a subcontract is in the amount of
751 $750,000 or greater.
752 (3) This section does not apply if:
753 (a) the application of this section jeopardizes the receipt of federal funds;
754 (b) the contract is a sole source contract; or
755 (c) the contract is an emergency procurement.
756 (4) (a) This section does not apply to a change order as defined in Section 63G-6-102 ,
757 or a modification to a contract, when the contract does not meet the initial threshold required

758 by Subsection (2).
759 (b) A person who intentionally uses change orders or contract modifications to
760 circumvent the requirements of Subsection (2) is guilty of an infraction.
761 (5) (a) A contractor subject to Subsection (2) shall demonstrate to the department that
762 the contractor has and will maintain an offer of qualified health insurance coverage for the
763 contractor's employees and the employees' dependents during the duration of the contract.
764 (b) If a subcontractor of the contractor is subject to Subsection (2), the contractor shall
765 demonstrate to the department that the subcontractor has and will maintain an offer of
766 qualified health insurance coverage for the subcontractor's employees and the employees'
767 dependents during the duration of the contract.
768 (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
769 the duration of the contract is subject to penalties in accordance with administrative rules
770 adopted by the department under Subsection (6).
771 (B) A contractor is not subject to penalties for the failure of a subcontractor to meet
772 the requirements of Subsection (5)(b).
773 (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
774 the duration of the contract is subject to penalties in accordance with administrative rules
775 adopted by the department under Subsection (6).
776 (B) A subcontractor is not subject to penalties for the failure of a contractor to meet
777 the requirements of Subsection (5)(a).
778 (6) The department shall adopt administrative rules:
779 (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
780 (b) in coordination with:
781 (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
782 (ii) the Department of Natural Resources in accordance with Section 79-2-404 ;
783 (iii) the State Building Board in accordance with Section 63A-5-205 ;
784 (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
785 (v) a public transit district in accordance with Section 17B-2a-818.5 ; and

786 (vi) the Legislature's Administrative Rules Review Committee; and
787 (c) which establish:
788 (i) the requirements and procedures a contractor must follow to demonstrate to the
789 department compliance with this section which shall include:
790 (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a)
791 or (b) more than twice in any 12-month period; and
792 (B) that the actuarially equivalent determination required in Subsection (1) is met by
793 the contractor if the contractor provides the department or division with a written statement of
794 actuarial equivalency from either:
795 (I) the Utah Insurance Department [or];
796 (II) an actuary selected by the contractor or the contractor's insurer; [and] or
797 (III) an underwriter who is responsible for developing the employer group's premium
798 rates;
799 (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
800 violates the provisions of this section, which may include:
801 (A) a three-month suspension of the contractor or subcontractor from entering into
802 future contracts with the state upon the first violation;
803 (B) a six-month suspension of the contractor or subcontractor from entering into
804 future contracts with the state upon the second violation;
805 (C) an action for debarment of the contractor or subcontractor in accordance with
806 Section 63G-6-804 upon the third or subsequent violation; and
807 (D) monetary penalties which may not exceed 50% of the amount necessary to
808 purchase qualified health insurance coverage for an employee and a dependent of the
809 employee of the contractor or subcontractor who was not offered qualified health insurance
810 coverage during the duration of the contract[.]; and
811 (iii) a website on which the department shall post the benchmark for the qualified
812 health insurance coverage identified in Subsection (1)(c)(i).
813 (7) (a) (i) In addition to the penalties imposed under Subsection (6), a contractor or

814 subcontractor who intentionally violates the provisions of this section shall be liable to the
815 employee for health care costs [not covered by insurance.] that would have been covered by
816 qualified health insurance coverage.
817 (ii) An employer has an affirmative defense to a cause of action under Subsection
818 (7)(a)(i) if:
819 (A) the employer relied in good faith on a written statement of actuarial equivalency
820 provided by:
821 (I) an actuary; or
822 (II) an underwriter who is responsible for developing the employer group's premium
823 rates; or
824 (B) the department determines that compliance with this section is not required under
825 the provisions of Subsection (3) or (4).
826 (b) An employee has a private right of action only against the employee's employer to
827 enforce the provisions of this Subsection (7).
828 (8) Any penalties imposed and collected under this section shall be deposited into the
829 Medicaid Restricted Account created in Section 26-18-402 .
830 (9) The failure of a contractor or subcontractor to provide qualified health insurance
831 coverage as required by this section:
832 (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
833 or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
834 Legal and Contractual Remedies; and
835 (b) may not be used by the procurement entity or a prospective bidder, offeror, or
836 contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
837 or construction.
838 Section 7. Section 79-2-404 is amended to read:
839 79-2-404. Contracting powers of department -- Health insurance coverage.
840 (1) For purposes of this section:
841 (a) "Employee" means an "employee," "worker," or "operative" as defined in Section

842 34A-2-104 who:
843 (i) works at least 30 hours per calendar week; and
844 (ii) meets employer eligibility waiting requirements for health care insurance which
845 may not exceed the first day of the calendar month following 90 days from the date of hire.
846 (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
847 (c) "Qualified health insurance coverage" means [a health benefit plan that] at the time
848 the contract is entered into or renewed:
849 [(i) (A) provides coverage that is actuarially equivalent to the current benefit plan
850 determined by the Children's Health Insurance Program under Section 26-40-106 ; and]
851 [(B) under which the employer pays at least 50% of the premium for the employee and
852 the dependents of the employee;]
853 [(ii) (A) is a federally qualified high deductible health plan that has:]
854 [(I) the lowest deductible permitted for a federally qualified high deductible health
855 plan; and]
856 [(II) an out of pocket maximum that does not exceed three times the amount of the
857 annual deductible; and]
858 [(B) under which the employer pays 75% of the premium for the employee and the
859 dependents of the employee; or]
860 [(iii) (A) provides coverage that is actuarially equivalent to 75% of the benefit plan
861 determined under Subsection (1)(c)(i); and]
862 [(B) under which the employer pays at least 75% of the premium of the employee and
863 the dependents of the employee.]
864 (i) a health benefit plan and employer contribution level with a combined actuarial
865 value at least actuarially equivalent to the combined actuarial value of the benchmark plan
866 determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a),
867 and a contribution level of 50% of the premium for the employee and the dependents of the
868 employee who reside or work in the state, in which:
869 (A) the employer pays at least 50% of the premium for the employee and the

870 dependents of the employee who reside or work in the state; and
871 (B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):
872 (I) rather that the benchmark plan's deductible, and the benchmark plan's
873 out-of-pocket maximum based on income levels:
874 (Aa) the deductible is $750 per individual and $2,250 per family; and
875 (Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
876 (II) dental coverage is not required; and
877 (III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do
878 not apply; or
879 (ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
880 deductible that is either:
881 (I) the lowest deductible permitted for a federally qualified high deductible health
882 plan; or
883 (II) a deductible that is higher than the lowest deductible permitted for a federally
884 qualified high deductible health plan, but includes an employer contribution to a health
885 savings account in a dollar amount at least equal to the dollar amount difference between the
886 lowest deductible permitted for a federally qualified high deductible plan and the deductible
887 for the employer offered federally qualified high deductible plan;
888 (B) an out-of-pocket maximum that does not exceed three times the amount of the
889 annual deductible; and
890 (C) under which the employer pays 75% of the premium for the employee and the
891 dependents of the employee who work or reside in the state.
892 (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
893 (2) (a) Except as provided in Subsection (3), this section applies [to all contracts] a
894 design or construction contract entered into by, or delegated to, the department or a division,
895 board, or council of the department on or after July 1, 2009, [if:] and to a prime contractor or
896 to a subcontractor in accordance with Subsection (2)(b).
897 [(a) the contract is for design or construction; and]

898 (b) (i) A prime contractor is subject to this section if the prime contract is in the
899 amount of $1,500,000 or greater[; or].
900 (ii) A subcontractor is subject to this section if a subcontract is in the amount of
901 $750,000 or greater.
902 (3) This section does not apply to contracts entered into by the department or a
903 division, board, or council of the department if:
904 (a) the application of this section jeopardizes the receipt of federal funds;
905 (b) the contract or agreement is between:
906 (i) the department or a division, board, or council of the department; and
907 (ii) (A) another agency of the state;
908 (B) the federal government;
909 (C) another state;
910 (D) an interstate agency;
911 (E) a political subdivision of this state; or
912 (F) a political subdivision of another state; or
913 (c) the contract or agreement is:
914 (i) for the purpose of disbursing grants or loans authorized by statute;
915 (ii) a sole source contract; or
916 (iii) an emergency procurement.
917 (4) (a) This section does not apply to a change order as defined in Section 63G-6-102 ,
918 or a modification to a contract, when the contract does not meet the initial threshold required
919 by Subsection (2).
920 (b) A person who intentionally uses change orders or contract modifications to
921 circumvent the requirements of Subsection (2) is guilty of an infraction.
922 (5) (a) A contractor subject to Subsection (2)(b)(i) shall demonstrate to the department
923 that the contractor has and will maintain an offer of qualified health insurance coverage for the
924 contractor's employees and the employees' dependents during the duration of the contract.
925 (b) If a subcontractor of the contractor is subject to Subsection (2)(b)(ii), the

926 contractor shall demonstrate to the department that the subcontractor has and will maintain an
927 offer of qualified health insurance coverage for the subcontractor's employees and the
928 employees' dependents during the duration of the contract.
929 (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
930 the duration of the contract is subject to penalties in accordance with administrative rules
931 adopted by the department under Subsection (6).
932 (B) A contractor is not subject to penalties for the failure of a subcontractor to meet
933 the requirements of Subsection (5)(b).
934 (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
935 the duration of the contract is subject to penalties in accordance with administrative rules
936 adopted by the department under Subsection (6).
937 (B) A subcontractor is not subject to penalties for the failure of a contractor to meet
938 the requirements of Subsection (5)(a).
939 (6) The department shall adopt administrative rules:
940 (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
941 (b) in coordination with:
942 (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
943 (ii) a public transit district in accordance with Section 17B-2a-818.5 ;
944 (iii) the State Building Board in accordance with Section 63A-5-205 ;
945 (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
946 (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
947 (vi) the Legislature's Administrative Rules Review Committee; and
948 (c) which establish:
949 (i) the requirements and procedures a contractor must follow to demonstrate
950 compliance with this section to the department which shall include:
951 (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a)
952 or (b) more than twice in any 12-month period; and
953 (B) that the actuarially equivalent determination required in Subsection (1) is met by

954 the contractor if the contractor provides the department or division with a written statement of
955 actuarial equivalency from either:
956 (I) the Utah Insurance Department [or];
957 (II) an actuary selected by the contractor or the contractor's insurer; [and] or
958 (III) an underwriter who is responsible for developing the employer group's premium
959 rates;
960 (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
961 violates the provisions of this section, which may include:
962 (A) a three-month suspension of the contractor or subcontractor from entering into
963 future contracts with the state upon the first violation;
964 (B) a six-month suspension of the contractor or subcontractor from entering into
965 future contracts with the state upon the second violation;
966 (C) an action for debarment of the contractor or subcontractor in accordance with
967 Section 63G-6-804 upon the third or subsequent violation; and
968 (D) monetary penalties which may not exceed 50% of the amount necessary to
969 purchase qualified health insurance coverage for an employee and a dependent of an employee
970 of the contractor or subcontractor who was not offered qualified health insurance coverage
971 during the duration of the contract[.]; and
972 (iii) a website on which the department shall post the benchmark for the qualified
973 health insurance coverage identified in Subsection (1)(c)(i).
974 (7) (a) (i) In addition to the penalties imposed under Subsection (6), a contractor or
975 subcontractor who intentionally violates the provisions of this section shall be liable to the
976 employee for health care costs [not covered by insurance.] that would have been covered by
977 qualified health insurance coverage.
978 (ii) An employer has an affirmative defense to a cause of action under Subsection
979 (7)(a)(i) if:
980 (A) the employer relied in good faith on a written statement of actuarial equivalency
981 provided by:

982 (I) an actuary; or
983 (II) an underwriter who is responsible for developing the employer group's premium
984 rates; or
985 (B) the department determines that compliance with this section is not required under
986 the provisions of Subsection (3) or (4).
987 (b) An employee has a private right of action only against the employee's employer to
988 enforce the provisions of this Subsection (7).
989 (8) Any penalties imposed and collected under this section shall be deposited into the
990 Medicaid Restricted Account created in Section 26-18-402 .
991 (9) The failure of a contractor or subcontractor to provide qualified health insurance
992 coverage as required by this section:
993 (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
994 or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
995 Legal and Contractual Remedies; and
996 (b) may not be used by the procurement entity or a prospective bidder, offeror, or
997 contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
998 or construction.