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H.B. 214 Enrolled






Chief Sponsor: James A. Dunnigan

Senate Sponsor: Curtis S. Bramble

             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Insurance Code to address the applicability of provisions of the
             11      Insurance Code to professional employer organizations.
             12      Highlighted Provisions:
             13          This bill:
             14          .    provides for continuation of coverage for certain health plans;
             15          .    provides that provisions addressing unfair marketing practices, unfair
             16      discrimination, coercion or intimidation, restriction on choice, and inducement
             17      apply to professional employer organizations; and
             18          .    makes technical changes.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          None
             23      Utah Code Sections Affected:
             24      AMENDS:
             25          31A-40-208, as enacted by Laws of Utah 2008, Chapter 318
             26      ENACTS:
             27          31A-40-309, Utah Code Annotated 1953
             29      Be it enacted by the Legislature of the state of Utah:

             30          Section 1. Section 31A-40-208 is amended to read:
             31           31A-40-208. Benefit plan.
             32          (1) A client and a professional employer organization licensed under this chapter shall
             33      each be considered an employer for purposes of sponsoring a retirement or welfare benefit plan
             34      for a covered employee.
             35          (2) A fully insured welfare benefit plan offered to a covered employee of a single
             36      professional employer organization licensed under this chapter:
             37          (a) is to be treated as a single employer welfare benefit plan for purposes of this title
             38      and rules made under this title;
             39          (b) may not be considered an employer welfare fund or plan, as described in Section
             40      31A-13-101 ; and
             41          (c) the single professional employer organization that sponsors the fully insured
             42      welfare plan is exempt from the registration requirements under this title for:
             43          (i) an insurance provider; or
             44          (ii) an employer welfare fund or plan.
             45          (3) For purposes of Chapter 30, Individual, Small Employer, and Group Health
             46      Insurance Act:
             47          (a) a professional employer organization licensed under this chapter is considered the
             48      employer of a covered employee; and
             49          (b) all covered employees of one or more clients participating in a health benefit plan
             50      sponsored by a single professional employer organization licensed under this chapter are
             51      considered employees of that professional employer organization.
             52          (4) A professional employer organization licensed under this chapter may offer to a
             53      covered employee a health benefit plan that is not fully insured by an authorized insurer, only
             54      if:
             55          (a) the professional employer organization has operated as a professional employer
             56      organization for at least one year before the day on which the professional employer
             57      organization offers the health benefit plan; and

             58          (b) the health benefit plan:
             59          (i) is administered by a third-party administrator licensed to do business in this state;
             60          (ii) holds all assets of the health benefit plan, including participant contributions, in a
             61      trust account;
             62          (iii) has and maintains reserves that are sound for the health benefit plan as determined
             63      by an actuary who:
             64          (A) uses generally accepted actuarial standards of practice; and
             65          (B) is an independent qualified actuary, including not being an employee or covered
             66      employee of the professional employer organization;
             67          (iv) provides written notice to a covered employee participating in the health benefit
             68      plan that the health benefit plan is self-insured or is not fully insured; [and]
             69          (v) consents to an audit:
             70          (A) on a random basis; or
             71          (B) upon a finding of a reasonable need by the commissioner[.]; and
             72          (vi) provides for continuation of coverage in compliance with Section 31A-22-722 .
             73          (5) The cost of an audit described in Subsection (4)(b)(v) shall be paid by the
             74      sponsoring professional employer organization.
             75          (6) A plan of a professional employer organization described in Subsection (4) that is
             76      not fully insured:
             77          (a) is subject to the requirements of this section; and
             78          (b) is not subject to another licensure or approval requirement of this title.
             79          Section 2. Section 31A-40-309 is enacted to read:
             80          31A-40-309. Applicability of other provisions of law.
             81          A professional employer organization is subject to Sections 31A-23a-402 and
             82      31A-23a-402.5 .

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