UT
Utah Senate Bill SB0273

Utah 2025 Regular Session

Utah Senate Bill SB0273 Compare Versions

Only one version of the bill is available at this time.
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11 02-13 09:08 S.B. 273
22 1
33 State Facilities Amendments
44 2025 GENERAL SESSION
55 STATE OF UTAH
66 Chief Sponsor: Todd Weiler
77 House Sponsor:
88 2
99
1010 3
1111 LONG TITLE
1212 4
1313 General Description:
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1515 This bill amends provisions regarding qualifications for an approved subcontractor for the
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1717 Division of Facilities Construction and Management.
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1919 Highlighted Provisions:
2020 8
2121 This bill:
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2323 ▸ defines terms related to subcontractors;
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2525 ▸ requires subcontractors to offer qualified health insurance to employees of the
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2727 subcontractor;
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2929 ▸ requires subcontractors to provide certain additional information to be a qualified vendor
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3131 with the Division of Facilities Construction and Management;
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3333 ▸ requires any subcontractor performing work under a contract with the Division of
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3535 Facilities Construction and Management to be a qualified vendor; and
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3737 ▸ makes technical changes.
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3939 Money Appropriated in this Bill:
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4141 None
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4343 Other Special Clauses:
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4545 None
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4747 Utah Code Sections Affected:
4848 22
4949 AMENDS:
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5151 63A-5b-607, as last amended by Laws of Utah 2024, Chapter 439
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5353 ENACTS:
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5555 63A-5b-611, Utah Code Annotated 1953
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5757
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5959 Be it enacted by the Legislature of the state of Utah:
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6161 Section 1. Section 63A-5b-607 is amended to read:
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6363 63A-5b-607 . Health insurance requirements -- Penalties.
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6565 (1) As used in this section:
6666 S.B. 273 S.B. 273 02-13 09:08
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6868 (a) "Aggregate amount" means the dollar sum of all contracts, change orders, and
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7070 modifications for a single project.
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7272 (b) "Change order" means the same as that term is defined in Section 63G-6a-103.
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7474 (c) "Eligible employee" means an employee, as defined in Section 34A-2-104, who:
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7676 (i) works at least 30 hours per calendar week; and
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7878 (ii) meets the employer eligibility waiting period for qualified health insurance
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8080 coverage provided by the employer.
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8282 (d) "First-tier subcontractor" means the same as that term is defined in Section
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8484 63A-5b-605.
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8686 [(d)] (e) "Health benefit plan" means:
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8888 (i) the same as that term is defined in Section 31A-1-301; or
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9090 (ii) an employee welfare benefit plan:
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9292 (A) established under the Employee Retirement Income Security Act of 1974, 29
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9494 U.S.C. Sec. 1001 et seq.;
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9696 (B) for an employer with 100 or more employees; and
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9898 (C) in which the employer establishes a self-funded or partially self-funded group
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100100 health plan to provide medical care for the employer's employees and
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102102 dependents of the employees.
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104104 [(e)] (f) "Qualified health insurance coverage" means the same as that term is defined in
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106106 Section 26B-3-909.
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108108 (g) "Second-tier subcontractor" means a subcontractor who contracts with a
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110110 subcontractor.
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112112 [(f)] (h)(i) "Subcontractor" means the same as that term is defined in Section
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114114 63A-5b-605.
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116116 (ii) "Subcontractor" includes a first-tier subcontractor and a second-tier subcontractor.
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118118 [(g)] (i) "Third party administrator" or "administrator" means the same as that term is
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120120 defined in Section 31A-1-301.
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122122 (2) Except as provided in Subsection (3), the requirements of this section apply to:
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124124 (a) a contractor of a design or construction contract with the division if the prime
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126126 contract is in an aggregate amount of $2,000,000 or more; and
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128128 (b) a subcontractor of a contractor of a design or construction contract with the division
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130130 if the subcontract is in an aggregate amount of $1,000,000 or more.
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132132 (3) The requirements of this section do not apply to a contractor or subcontractor if:
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134134 (a) the application of this section jeopardizes the division's receipt of federal funds;
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136136 65
137137 (b) the contract is a sole source contract, as defined in Section 63G-6a-103; or
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139139 (c) the contract is the result of an emergency procurement.
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141141 (4) A person who intentionally uses a change order, contract modification, or multiple
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143143 contracts to circumvent the requirements of this section is guilty of an infraction.
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145145 (5)(a) A contractor or a subcontractor that is subject to the requirements of this section
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147147 shall:
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149149 (i) make and maintain an offer of qualified health coverage for the contractor's or
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151151 subcontractor's eligible employees and the eligible employees' dependents; and
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153153 (ii) submit to the director a written statement demonstrating that the contractor or
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155155 subcontractor is in compliance with Subsection (5)(a)(i).
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157157 (b) A statement under Subsection (5)(a)(ii):
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159159 (i) shall be from:
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161161 (A) an actuary selected by the contractor or the contractor's insurer or the
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163163 subcontractor or the subcontractor's insurer;
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165165 (B) an underwriter who is responsible for developing the employer group's
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167167 premium rates; or
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169169 (C) if the contractor or subcontractor provides a health benefit plan described in
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171171 Subsection [(1)(d)(ii)] (1)(e)(ii), an actuary or underwriter selected by a third
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173173 party administrator; and
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175175 (ii) may not be created more than one year before the day on which the contractor or
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177177 subcontractor submits the statement to the director.
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179179 (c)(i) A contractor that provides a health benefit plan described in Subsection [
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181181 (1)(d)(ii)] (1)(e)(ii) shall provide the actuary or underwriter selected by an
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183183 administrator, as described in Subsection (5)(b)(i)(C), sufficient information to
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185185 determine whether the contractor's or subcontractor's contribution to the health
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187187 benefit plan and the actuarial value of the health benefit plan meet the
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189189 requirements of qualified health coverage.
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191191 (ii) A contractor or subcontractor may not make a change to the contractor's or
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193193 subcontractor's contribution to the health benefit plan, unless the contractor or
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195195 subcontractor provides notice to:
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197197 (A) the actuary or underwriter selected by an administrator, as described in
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199199 Subsection (5)(b)(i)(C), for the actuary or underwriter to update the written
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201201 statement described in Subsection (5)(a) in compliance with this section; and
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203203 (B) the division.
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206206 (6)(a) A contractor or subcontractor that is subject to the requirements of this section
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208208 shall:
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210210 (i) ensure that each contract the contractor or subcontractor enters with a
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212212 subcontractor that is subject to the requirements of this section requires the
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214214 subcontractor to obtain and maintain an offer of qualified health coverage for the
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216216 subcontractor's eligible employees and the eligible employees' dependents during
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218218 the duration of the subcontract; and
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220220 (ii) obtain from a subcontractor referred to in Subsection (6)(a)(i) a written statement
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222222 demonstrating that the subcontractor offers qualified health coverage to eligible
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224224 employees and eligible employees' dependents.
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226226 (b) A statement under Subsection (6)(a)(ii):
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228228 (i) shall be from:
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230230 (A) an actuary selected by the subcontractor or the subcontractor's insurer;
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232232 (B) an underwriter who is responsible for developing the employer group's
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234234 premium rates; or
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236236 (C) if the subcontractor provides a health benefit plan described in Subsection [
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238238 (1)(d)(ii)] (1)(e)(ii), an actuary or underwriter selected by an administrator; and
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240240 (ii) may not be created more than one year before the day on which the contractor or
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242242 subcontractor obtains the statement from the subcontractor.
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244244 (7)(a)(i) A contractor that fails to maintain an offer of qualified health coverage
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246246 during the duration of the contract as required in this section is subject to penalties
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248248 in accordance with administrative rules made by the division under this section, in
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250250 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
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252252 (ii) A contractor is not subject to penalties for the failure of a subcontractor to obtain
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254254 and maintain an offer of qualified health coverage as required in this section.
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256256 (b)(i) A subcontractor that fails to obtain and maintain an offer of qualified health
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258258 coverage during the duration of the subcontract as required in this section is
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260260 subject to penalties in accordance with administrative rules made by the division
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262262 under this section, in accordance with Title 63G, Chapter 3, Utah Administrative
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264264 Rulemaking Act.
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266266 (ii) A subcontractor is not subject to penalties for the failure of a contractor to
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268268 maintain an offer of qualified health coverage as required in this section.
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270270 (8) The division shall make rules:
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272272 (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
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275275 (b) in coordination with:
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277277 (i) the Department of Environmental Quality in accordance with Section 19-1-206;
278278 135
279279 (ii) the Department of Natural Resources in accordance with Section 79-2-404;
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281281 (iii) a public transit district in accordance with Section 17B-2a-818.5;
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283283 (iv) the State Capitol Preservation Board in accordance with Section 63O-2-403;
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285285 (v) the Department of Transportation in accordance with Section 72-6-107.5; and
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287287 (vi) the Legislature's Rules Review and General Oversight Committee created under
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289289 Section 36-35-102; and
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291291 (c) that establish:
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293293 (i) the requirements and procedures for a contractor and a subcontractor to
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295295 demonstrate compliance with this section, including:
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297297 (A) a provision that a contractor or subcontractor's compliance with this section is
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299299 subject to an audit by the division or the Office of the Legislative Auditor
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301301 General;
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303303 (B) a provision that a contractor that is subject to the requirements of this section
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305305 obtain a written statement as provided in Subsection (5); and
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307307 (C) a provision that a subcontractor that is subject to the requirements of this
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309309 section obtain a written statement as provided in Subsection (6);
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311311 (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
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313313 violates the provisions of this section, which may include:
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315315 (A) a three-month suspension of the contractor or subcontractor from entering into
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317317 a future contract with the state upon the first violation;
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319319 (B) a six-month suspension of the contractor or subcontractor from entering into a
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321321 future contract with the state upon the second violation;
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323323 (C) an action for debarment of the contractor or subcontractor in accordance with
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325325 Section 63G-6a-904 upon the third or subsequent violation; and
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327327 (D) monetary penalties which may not exceed 50% of the amount necessary to
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329329 purchase qualified health coverage for eligible employees and dependents of
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331331 eligible employees of the contractor or subcontractor who were not offered
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333333 qualified health coverage during the duration of the contract; and
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335335 (iii) a website for the department to post the commercially equivalent benchmark for
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337337 the qualified health coverage that is provided by the Department of Health and
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339339 Human Services in accordance with Subsection 26B-3-909(2).
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341341 (9) During the duration of a contract, the division may perform an audit to verify a
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344344 contractor or subcontractor's compliance with this section.
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346346 (10)(a) Upon the division's request, a contractor or subcontractor shall provide the
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348348 division:
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350350 (i) a signed actuarial certification that the coverage the contractor or subcontractor
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352352 offers is qualified health coverage; or
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354354 (ii) all relevant documents and information necessary for the division to determine
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356356 compliance with this section.
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358358 (b) If a contractor or subcontractor provides the documents and information described in
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360360 Subsection (10)(a)(i), the Insurance Department shall assist the division in
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362362 determining if the coverage the contractor or subcontractor offers is qualified health
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364364 coverage.
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366366 (11)(a)(i) In addition to the penalties imposed under Subsection (7), a contractor or
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368368 subcontractor that intentionally violates the provisions of this section is liable to
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370370 an eligible employee for health care costs that would have been covered by
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372372 qualified health coverage.
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374374 (ii) An employer has an affirmative defense to a cause of action under Subsection
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376376 (11)(a)(i) if:
377377 184
378378 (A) the employer relied in good faith on a written statement described in
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380380 Subsection (5) or (6); or
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382382 (B) the department determines that compliance with this section is not required
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384384 under the provisions of Subsection (3).
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386386 (b) An eligible employee has a private right of action against the employee's employer
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388388 only as provided in this Subsection (11).
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390390 (12) The director shall cause money collected from the imposition and collection of a
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392392 penalty under this section to be deposited into the Medicaid Growth Reduction and
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394394 Budget Stabilization Account created by Section 63J-1-315.
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396396 (13) The failure of a contractor or subcontractor to provide qualified health coverage as
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398398 required by this section:
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400400 (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
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402402 or contractor under:
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404404 (i) Section 63G-6a-1602; or
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406406 (ii) any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
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408408 (b) may not be used by the procurement entity or a prospective bidder, offeror, or
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410410 contractor as a basis for any action or suit that would suspend, disrupt, or terminate
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413413 the design or construction.
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415415 (14) An employer's waiting period for an employee to become eligible for qualified health
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417417 coverage may not extend beyond the first day of the calendar month following 60 days
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419419 after the day on which the employee is hired.
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421421 (15) An administrator, including an administrator's actuary or underwriter, who provides a
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423423 written statement under Subsection (5)(a) or (c) regarding the qualified health coverage
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425425 of a contractor or subcontractor who provides a health benefit plan described in
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427427 Subsection [(1)(d)(ii)] (1)(e)(ii):
428428 209
429429 (a) subject to Subsection (11)(b), is not liable for an error in the written statement, unless
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431431 the administrator commits gross negligence in preparing the written statement;
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433433 (b) is not liable for any error in the written statement if the administrator relied in good
434434 212
435435 faith on information from the contractor or subcontractor; and
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437437 (c) may require as a condition of providing the written statement that a contractor or
438438 214
439439 subcontractor hold the administrator harmless for an action arising under this section.
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441441 Section 2. Section 63A-5b-611 is enacted to read:
442442 216
443443 63A-5b-611 . Requirements for subcontractors.
444444 217
445445 (1) As used in this section, "subcontractor" means the same as that term is defined in
446446 218
447447 Section 63A-5b-605.
448448 219
449449 (2)(a) In addition to the requirements described in Section 63G-6a-410, in order to
450450 220
451451 qualify for an approved vendor list for the division under Section 63G-6a-507, a
452452 221
453453 subcontractor shall provide the information described in Subsection (2)(b) at least
454454 222
455455 annually, and whenever an application for prequalification is being filed.
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457457 (b) A subcontractor shall provide the following for each employee of the subcontractor
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459459 as required in Subsection (2)(a):
460460 225
461461 (i) the name of the employee;
462462 226
463463 (ii) the last four digits of the social security number of the employee;
464464 227
465465 (iii) if the employee possesses a professional license, the professional license
466466 228
467467 number; and
468468 229
469469 (iv) the written statements regarding qualified health coverage for employees as
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471471 required in Subsections 63A-5b-607(5) and (6).
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473473 (3) A subcontractor may not contract for or perform work under a prime contract with the
474474 232
475475 division unless the subcontractor is on an approved qualified vendor list under Section
476476 233
477477 63G-6a-507.
478478 234
479479 (4) The division shall ensure that the list of qualified subcontractors is publicly available.
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482482 Section 3. Effective Date.
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484484 This bill takes effect on May 7, 2025.
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