§ 31A-40-208. Benefit plan.

(1) A client and a professional employer organization licensed under this chapter shall each be considered an employer for purposes of sponsoring a retirement or welfare benefit plan for a covered employee.

(2) A fully insured welfare benefit plan offered to a covered employee of a single professional employer organization licensed under this chapter:

(a) is to be treated as a single employer welfare benefit plan for purposes of this title and rules made under this title;

(b) may not be considered an employer welfare fund or plan, as described in Section 31A-13-101; and

(c) the single professional employer organization that sponsors the fully insured welfare plan is exempt from the registration requirements under this title for:

(i) an insurance provider; or

(ii) an employer welfare fund or plan.

(3) For purposes of Chapter 30, Individual, Small Employer, and Group Health Insurance Act:

(a) a professional employer organization licensed under this chapter is considered the employer of a covered employee; and

(b) all covered employees of one or more clients participating in a health benefit plan sponsored by a single professional employer organization licensed under this chapter are considered employees of that professional employer organization.

(4) A professional employer organization licensed under this chapter may offer to a covered employee a health benefit plan that is not fully insured by an authorized insurer, only if:

(a) the professional employer organization has operated as a professional employer organization for at least one year before the day on which the professional employer organization offers the health benefit plan; and

(b) the health benefit plan:

(i) is administered by a third-party administrator licensed to do business in this state;

(ii) holds all assets of the health benefit plan, including participant contributions, in a trust account;

(iii) has and maintains reserves that are sound for the health benefit plan as determined by an actuary who:

(A) uses generally accepted actuarial standards of practice; and

(B) is an independent qualified actuary, including not being an employee or covered employee of the professional employer organization;

(iv) provides written notice to a covered employee participating in the health benefit plan that the health benefit plan is self-insured or is not fully insured;

(v) consents to an audit:

(A) on a random basis; or

(B) upon a finding of a reasonable need by the commissioner; and

(vi) provides for continuation of coverage in compliance with Section 31A-22-722.

(5) The cost of an audit described in Subsection (4)(b)(v) shall be paid by the sponsoring professional employer organization.

(6) A plan of a professional employer organization described in Subsection (4) that is not fully insured:

(a) is subject to the requirements of this section; and

(b) is not subject to another licensure or approval requirement of this title.

Amended by Chapter 169, 2012 General Session