31A-40-208 - Benefit plan.
31A-40-208. Benefit plan.
(1) A client and a professional employer organization licensed under this chapter shalleach be considered an employer for purposes of sponsoring a retirement or welfare benefit planfor a covered employee.
(2) A fully insured welfare benefit plan offered to a covered employee of a singleprofessional employer organization licensed under this chapter:
(a) is to be treated as a single employer welfare benefit plan for purposes of this title andrules made under this title;
(b) may not be considered an employer welfare fund or plan, as described in Section31A-13-101; and
(c) the single professional employer organization that sponsors the fully insured welfareplan 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 InsuranceAct:
(a) a professional employer organization licensed under this chapter is considered theemployer of a covered employee; and
(b) all covered employees of one or more clients participating in a health benefit plansponsored by a single professional employer organization licensed under this chapter areconsidered employees of that professional employer organization.
(4) A professional employer organization licensed under this chapter may offer to acovered 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 employerorganization for at least one year before the day on which the professional employer organizationoffers 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 atrust account;
(iii) has and maintains reserves that are sound for the health benefit plan as determinedby an actuary who:
(A) uses generally accepted actuarial standards of practice; and
(B) is an independent qualified actuary, including not being an employee or coveredemployee of the professional employer organization;
(iv) provides written notice to a covered employee participating in the health benefit planthat the health benefit plan is self-insured or is not fully insured; and
(v) consents to an audit:
(A) on a random basis; or
(B) upon a finding of a reasonable need by the commissioner.
(5) The cost of an audit described in Subsection (4)(b)(v) shall be paid by the sponsoringprofessional employer organization.
(6) A plan of a professional employer organization described in Subsection (4) that is notfully insured:
(a) is subject to the requirements of this section; and
(b) is not subject to another licensure or approval requirement of this title.
Enacted by Chapter 318, 2008 General Session