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State Facilities Amendments
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Todd Weiler
House Sponsor:
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LONG TITLE
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General Description:
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This bill amends provisions regarding qualifications for an approved subcontractor for the
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Division of Facilities Construction and Management.
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Highlighted Provisions:
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This bill:
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▸ defines terms related to subcontractors;
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▸ requires subcontractors to offer qualified health insurance to employees of the
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subcontractor;
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▸ requires subcontractors to provide certain additional information to be a qualified vendor
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with the Division of Facilities Construction and Management;
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▸ requires any subcontractor performing work under a contract with the Division of
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Facilities Construction and Management to be a qualified vendor; and
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▸ makes technical changes.
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Money Appropriated in this Bill:
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None
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Other Special Clauses:
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None
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Utah Code Sections Affected:
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AMENDS:
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63A-5b-607, as last amended by Laws of Utah 2024, Chapter 439
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ENACTS:
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63A-5b-611, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1. Section 63A-5b-607 is amended to read:
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63A-5b-607 . Health insurance requirements -- Penalties.
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(1) As used in this section:
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(a) "Aggregate amount" means the dollar sum of all contracts, change orders, and
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modifications for a single project.
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(b) "Change order" means the same as that term is defined in Section 63G-6a-103.
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(c) "Eligible employee" means an employee, as defined in Section 34A-2-104, who:
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(i) works at least 30 hours per calendar week; and
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(ii) meets the employer eligibility waiting period for qualified health insurance
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coverage provided by the employer.
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(d) "First-tier subcontractor" means the same as that term is defined in Section
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63A-5b-605.
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[(d)] (e) "Health benefit plan" means:
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(i) the same as that term is defined in Section 31A-1-301; or
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(ii) an employee welfare benefit plan:
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(A) established under the Employee Retirement Income Security Act of 1974, 29
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U.S.C. Sec. 1001 et seq.;
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(B) for an employer with 100 or more employees; and
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(C) in which the employer establishes a self-funded or partially self-funded group
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health plan to provide medical care for the employer's employees and
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dependents of the employees.
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[(e)] (f) "Qualified health insurance coverage" means the same as that term is defined in
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Section 26B-3-909.
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(g) "Second-tier subcontractor" means a subcontractor who contracts with a
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subcontractor.
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[(f)] (h)(i) "Subcontractor" means the same as that term is defined in Section
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63A-5b-605.
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(ii) "Subcontractor" includes a first-tier subcontractor and a second-tier subcontractor.
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[(g)] (i) "Third party administrator" or "administrator" means the same as that term is
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defined in Section 31A-1-301.
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(2) Except as provided in Subsection (3), the requirements of this section apply to:
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(a) a contractor of a design or construction contract with the division if the prime
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contract is in an aggregate amount of $2,000,000 or more; and
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(b) a subcontractor of a contractor of a design or construction contract with the division
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if the subcontract is in an aggregate amount of $1,000,000 or more.
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(3) The requirements of this section do not apply to a contractor or subcontractor if:
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(a) the application of this section jeopardizes the division's receipt of federal funds;
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(b) the contract is a sole source contract, as defined in Section 63G-6a-103; or
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(c) the contract is the result of an emergency procurement.
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(4) A person who intentionally uses a change order, contract modification, or multiple
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contracts to circumvent the requirements of this section is guilty of an infraction.
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(5)(a) A contractor or a subcontractor that is subject to the requirements of this section
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shall:
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(i) make and maintain an offer of qualified health coverage for the contractor's or
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subcontractor's eligible employees and the eligible employees' dependents; and
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(ii) submit to the director a written statement demonstrating that the contractor or
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subcontractor is in compliance with Subsection (5)(a)(i).
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(b) A statement under Subsection (5)(a)(ii):
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(i) shall be from:
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(A) an actuary selected by the contractor or the contractor's insurer or the
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subcontractor or the subcontractor's insurer;
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(B) an underwriter who is responsible for developing the employer group's
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premium rates; or
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(C) if the contractor or subcontractor provides a health benefit plan described in
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Subsection [(1)(d)(ii)] (1)(e)(ii), an actuary or underwriter selected by a third
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party administrator; and
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(ii) may not be created more than one year before the day on which the contractor or
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subcontractor submits the statement to the director.
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(c)(i) A contractor that provides a health benefit plan described in Subsection [
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(1)(d)(ii)] (1)(e)(ii) shall provide the actuary or underwriter selected by an
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administrator, as described in Subsection (5)(b)(i)(C), sufficient information to
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determine whether the contractor's or subcontractor's contribution to the health
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benefit plan and the actuarial value of the health benefit plan meet the
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requirements of qualified health coverage.
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(ii) A contractor or subcontractor may not make a change to the contractor's or
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subcontractor's contribution to the health benefit plan, unless the contractor or
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subcontractor provides notice to:
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(A) the actuary or underwriter selected by an administrator, as described in
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Subsection (5)(b)(i)(C), for the actuary or underwriter to update the written
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statement described in Subsection (5)(a) in compliance with this section; and
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(B) the division.
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(6)(a) A contractor or subcontractor that is subject to the requirements of this section
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shall:
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(i) ensure that each contract the contractor or subcontractor enters with a
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subcontractor that is subject to the requirements of this section requires the
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subcontractor to obtain and maintain an offer of qualified health coverage for the
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subcontractor's eligible employees and the eligible employees' dependents during
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the duration of the subcontract; and
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(ii) obtain from a subcontractor referred to in Subsection (6)(a)(i) a written statement
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demonstrating that the subcontractor offers qualified health coverage to eligible
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employees and eligible employees' dependents.
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(b) A statement under Subsection (6)(a)(ii):
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(i) shall be from:
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(A) an actuary selected by the subcontractor or the subcontractor's insurer;
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(B) an underwriter who is responsible for developing the employer group's
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premium rates; or
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(C) if the subcontractor provides a health benefit plan described in Subsection [
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(1)(d)(ii)] (1)(e)(ii), an actuary or underwriter selected by an administrator; and
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(ii) may not be created more than one year before the day on which the contractor or
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subcontractor obtains the statement from the subcontractor.
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(7)(a)(i) A contractor that fails to maintain an offer of qualified health coverage
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during the duration of the contract as required in this section is subject to penalties
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in accordance with administrative rules made by the division under this section, in
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accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
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(ii) A contractor is not subject to penalties for the failure of a subcontractor to obtain
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and maintain an offer of qualified health coverage as required in this section.
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(b)(i) A subcontractor that fails to obtain and maintain an offer of qualified health
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coverage during the duration of the subcontract as required in this section is
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subject to penalties in accordance with administrative rules made by the division
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under this section, in accordance with Title 63G, Chapter 3, Utah Administrative
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Rulemaking Act.
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(ii) A subcontractor is not subject to penalties for the failure of a contractor to
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maintain an offer of qualified health coverage as required in this section.
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(8) The division shall make rules:
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(a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
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(b) in coordination with:
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(i) the Department of Environmental Quality in accordance with Section 19-1-206;
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(ii) the Department of Natural Resources in accordance with Section 79-2-404;
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(iii) a public transit district in accordance with Section 17B-2a-818.5;
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(iv) the State Capitol Preservation Board in accordance with Section 63O-2-403;
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(v) the Department of Transportation in accordance with Section 72-6-107.5; and
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(vi) the Legislature's Rules Review and General Oversight Committee created under
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Section 36-35-102; and
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(c) that establish:
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(i) the requirements and procedures for a contractor and a subcontractor to
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demonstrate compliance with this section, including:
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(A) a provision that a contractor or subcontractor's compliance with this section is
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subject to an audit by the division or the Office of the Legislative Auditor
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General;
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(B) a provision that a contractor that is subject to the requirements of this section
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obtain a written statement as provided in Subsection (5); and
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(C) a provision that a subcontractor that is subject to the requirements of this
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section obtain a written statement as provided in Subsection (6);
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(ii) the penalties that may be imposed if a contractor or subcontractor intentionally
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violates the provisions of this section, which may include:
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(A) a three-month suspension of the contractor or subcontractor from entering into
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a future contract with the state upon the first violation;
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(B) a six-month suspension of the contractor or subcontractor from entering into a
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future contract with the state upon the second violation;
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(C) an action for debarment of the contractor or subcontractor in accordance with
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Section 63G-6a-904 upon the third or subsequent violation; and
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(D) monetary penalties which may not exceed 50% of the amount necessary to
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purchase qualified health coverage for eligible employees and dependents of
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eligible employees of the contractor or subcontractor who were not offered
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qualified health coverage during the duration of the contract; and
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(iii) a website for the department to post the commercially equivalent benchmark for
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the qualified health coverage that is provided by the Department of Health and
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Human Services in accordance with Subsection 26B-3-909(2).
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(9) During the duration of a contract, the division may perform an audit to verify a
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contractor or subcontractor's compliance with this section.
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(10)(a) Upon the division's request, a contractor or subcontractor shall provide the
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division:
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(i) a signed actuarial certification that the coverage the contractor or subcontractor
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offers is qualified health coverage; or
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(ii) all relevant documents and information necessary for the division to determine
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compliance with this section.
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(b) If a contractor or subcontractor provides the documents and information described in
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Subsection (10)(a)(i), the Insurance Department shall assist the division in
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determining if the coverage the contractor or subcontractor offers is qualified health
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coverage.
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(11)(a)(i) In addition to the penalties imposed under Subsection (7), a contractor or
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subcontractor that intentionally violates the provisions of this section is liable to
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an eligible employee for health care costs that would have been covered by
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qualified health coverage.
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(ii) An employer has an affirmative defense to a cause of action under Subsection
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(11)(a)(i) if:
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(A) the employer relied in good faith on a written statement described in
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Subsection (5) or (6); or
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(B) the department determines that compliance with this section is not required
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under the provisions of Subsection (3).
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(b) An eligible employee has a private right of action against the employee's employer
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only as provided in this Subsection (11).
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(12) The director shall cause money collected from the imposition and collection of a
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penalty under this section to be deposited into the Medicaid Growth Reduction and
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Budget Stabilization Account created by Section 63J-1-315.
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(13) The failure of a contractor or subcontractor to provide qualified health coverage as
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required by this section:
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(a) may not be the basis for a protest or other action from a prospective bidder, offeror,
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or contractor under:
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(i) Section 63G-6a-1602; or
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(ii) any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
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(b) may not be used by the procurement entity or a prospective bidder, offeror, or
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contractor as a basis for any action or suit that would suspend, disrupt, or terminate
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the design or construction.
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(14) An employer's waiting period for an employee to become eligible for qualified health
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coverage may not extend beyond the first day of the calendar month following 60 days
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after the day on which the employee is hired.
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(15) An administrator, including an administrator's actuary or underwriter, who provides a
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written statement under Subsection (5)(a) or (c) regarding the qualified health coverage
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of a contractor or subcontractor who provides a health benefit plan described in
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Subsection [(1)(d)(ii)] (1)(e)(ii):
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(a) subject to Subsection (11)(b), is not liable for an error in the written statement, unless
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the administrator commits gross negligence in preparing the written statement;
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(b) is not liable for any error in the written statement if the administrator relied in good
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faith on information from the contractor or subcontractor; and
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(c) may require as a condition of providing the written statement that a contractor or
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subcontractor hold the administrator harmless for an action arising under this section.
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Section 2. Section 63A-5b-611 is enacted to read:
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63A-5b-611 . Requirements for subcontractors.
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(1) As used in this section, "subcontractor" means the same as that term is defined in
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Section 63A-5b-605.
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(2)(a) In addition to the requirements described in Section 63G-6a-410, in order to
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qualify for an approved vendor list for the division under Section 63G-6a-507, a
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subcontractor shall provide the information described in Subsection (2)(b) at least
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annually, and whenever an application for prequalification is being filed.
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(b) A subcontractor shall provide the following for each employee of the subcontractor
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as required in Subsection (2)(a):
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(i) the name of the employee;
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(ii) the last four digits of the social security number of the employee;
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(iii) if the employee possesses a professional license, the professional license
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number; and
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(iv) the written statements regarding qualified health coverage for employees as
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required in Subsections 63A-5b-607(5) and (6).
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(3) A subcontractor may not contract for or perform work under a prime contract with the
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division unless the subcontractor is on an approved qualified vendor list under Section
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63G-6a-507.
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(4) The division shall ensure that the list of qualified subcontractors is publicly available.
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Section 3. Effective Date.
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This bill takes effect on May 7, 2025.
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