63A-5-205 - Contracting powers of director -- Retainage -- Health insurance coverage.
63A-5-205. Contracting powers of director -- Retainage -- Health insurancecoverage.
(1) As used in this section:
(a) "Capital developments" has the same meaning as provided in Section 63A-5-104.
(b) "Capital improvements" has the same meaning as provided in Section 63A-5-104.
(c) "Employee" means an "employee," "worker," or "operative" as defined in Section34A-2-104 who:
(i) works at least 30 hours per calendar week; and
(ii) meets employer eligibility waiting requirements for health care insurance which maynot exceed the first day of the calendar month following 90 days from the date of hire.
(d) "Health benefit plan" has the same meaning as provided in Section 31A-1-301.
(e) "Qualified health insurance coverage" means at the time the contract is entered into orrenewed:
(i) a health benefit plan and employer contribution level with a combined actuarial valueat least actuarially equivalent to the combined actuarial value of the benchmark plan determinedby the Children's Health Insurance Program under Subsection 26-40-106(2)(a), and acontribution level of 50% of the premium for the employee and the dependents of the employeewho reside or work in the state, in which:
(A) the employer pays at least 50% of the premium for the employee and the dependentsof the employee who reside or work in the state; and
(B) for purposes of calculating actuarial equivalency under this Subsection (1)(e)(i):
(I) rather that the benchmark plan's deductible, and the benchmark plan's out-of-pocketmaximum based on income levels:
(Aa) the deductible is $750 per individual and $2,250 per family; and
(Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
(II) dental coverage is not required; and
(III) other than Subsection 26-40-106(2)(a), the provisions of Section 26-40-106 do notapply; or
(ii) (A) is a federally qualified high deductible health plan that, at a minimum, has adeductible that is either:
(I) the lowest deductible permitted for a federally qualified high deductible health plan;or
(II) a deductible that is higher than the lowest deductible permitted for a federallyqualified high deductible health plan, but includes an employer contribution to a health savingsaccount in a dollar amount at least equal to the dollar amount difference between the lowestdeductible permitted for a federally qualified high deductible plan and the deductible for theemployer offered federally qualified high deductible plan;
(B) an out-of-pocket maximum that does not exceed three times the amount of the annualdeductible; and
(C) under which the employer pays 75% of the premium for the employee and thedependents of the employee who work or reside in the state.
(f) "Subcontractor" has the same meaning provided for in Section 63A-5-208.
(2) In accordance with Title 63G, Chapter 6, Utah Procurement Code, the director may:
(a) subject to Subsection (3), enter into contracts for any work or professional serviceswhich the division or the State Building Board may do or have done; and
(b) as a condition of any contract for architectural or engineering services, prohibit thearchitect or engineer from retaining a sales or agent engineer for the necessary design work.
(3) (a) Except as provided in Subsection (3)(b), this Subsection (3) applies to all designor construction contracts entered into by the division or the State Building Board on or after July1, 2009, and:
(i) applies to a prime contractor if the prime contract is in the amount of $1,500,000 orgreater; and
(ii) applies to a subcontractor if the subcontract is in the amount of $750,000 or greater.
(b) This Subsection (3) does not apply:
(i) if the application of this Subsection (3) jeopardizes the receipt of federal funds;
(ii) if the contract is a sole source contract;
(iii) if the contract is an emergency procurement; or
(iv) to a change order as defined in Section 63G-6-102, or a modification to a contract,when the contract does not meet the threshold required by Subsection (3)(a).
(c) A person who intentionally uses change orders or contract modifications tocircumvent the requirements of Subsection (3)(a) is guilty of an infraction.
(d) (i) A contractor subject to Subsection (3)(a) shall demonstrate to the director that thecontractor has and will maintain an offer of qualified health insurance coverage for thecontractor's employees and the employees' dependents.
(ii) If a subcontractor of the contractor is subject to Subsection (3)(a), the contractor shalldemonstrate to the director that the subcontractor has and will maintain an offer of qualifiedhealth insurance coverage for the subcontractor's employees and the employees' dependents.
(e) (i) (A) A contractor who fails to meet the requirements of Subsection (3)(d)(i) duringthe duration of the contract is subject to penalties in accordance with administrative rules adoptedby the division under Subsection (3)(f).
(B) A contractor is not subject to penalties for the failure of a subcontractor to meet therequirements of Subsection (3)(d)(ii).
(ii) (A) A subcontractor who fails to meet the requirements of Subsection (3)(d)(ii)during the duration of the contract is subject to penalties in accordance with administrative rulesadopted by the division under Subsection (3)(f).
(B) A subcontractor is not subject to penalties for the failure of a contractor to meet therequirements of Subsection (3)(d)(i).
(f) The division shall adopt administrative rules:
(i) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
(ii) in coordination with:
(A) the Department of Environmental Quality in accordance with Section 19-1-206;
(B) the Department of Natural Resources in accordance with Section 79-2-404;
(C) a public transit district in accordance with Section 17B-2a-818.5;
(D) the State Capitol Preservation Board in accordance with Section 63C-9-403;
(E) the Department of Transportation in accordance with Section 72-6-107.5; and
(F) the Legislature's Administrative Rules Review Committee; and
(iii) which establish:
(A) the requirements and procedures a contractor must follow to demonstrate to thedirector compliance with this Subsection (3) which shall include:
(I) that a contractor will not have to demonstrate compliance with Subsection (3)(d)(i) or
(ii) more than twice in any 12-month period; and
(II) that the actuarially equivalent determination required in Subsection (1) is met by thecontractor if the contractor provides the department or division with a written statement ofactuarial equivalency from either:
(Aa) the Utah Insurance Department;
(Bb) an actuary selected by the contractor or the contractor's insurer; or
(Cc) an underwriter who is responsible for developing the employer group's premiumrates;
(B) the penalties that may be imposed if a contractor or subcontractor intentionallyviolates the provisions of this Subsection (3), which may include:
(I) a three-month suspension of the contractor or subcontractor from entering into futurecontracts with the state upon the first violation;
(II) a six-month suspension of the contractor or subcontractor from entering into futurecontracts with the state upon the second violation;
(III) an action for debarment of the contractor or subcontractor in accordance withSection 63G-6-804 upon the third or subsequent violation; and
(IV) monetary penalties which may not exceed 50% of the amount necessary to purchasequalified health insurance coverage for an employee and the dependents of an employee of thecontractor or subcontractor who was not offered qualified health insurance coverage during theduration of the contract; and
(C) a website on which the department shall post the benchmark for the qualified healthinsurance coverage identified in Subsection (1)(e)(i).
(g) (i) In addition to the penalties imposed under Subsection (3)(f)(iii), a contractor orsubcontractor who intentionally violates the provisions of this section shall be liable to theemployee for health care costs that would have been covered by qualified health insurancecoverage.
(ii) An employer has an affirmative defense to a cause of action under Subsection(3)(g)(i) if:
(A) the employer relied in good faith on a written statement of actuarial equivalencyprovided by:
(I) an actuary; or
(II) an underwriter who is responsible for developing the employer group's premiumrates; or
(B) the department determines that compliance with this section is not required under theprovisions of Subsection (3)(b).
(iii) An employee has a private right of action only against the employee's employer toenforce the provisions of this Subsection (3)(g).
(h) Any penalties imposed and collected under this section shall be deposited into theMedicaid Restricted Account created by Section 26-18-402.
(i) The failure of a contractor or subcontractor to provide qualified health insurancecoverage as required by this section:
(i) may not be the basis for a protest or other action from a prospective bidder, offeror, orcontractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8, Legaland Contractual Remedies; and
(ii) may not be used by the procurement entity or a prospective bidder, offeror, or
contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design orconstruction.
(4) The judgment of the director as to the responsibility and qualifications of a bidder isconclusive, except in case of fraud or bad faith.
(5) The division shall make all payments to the contractor for completed work inaccordance with the contract and pay the interest specified in the contract on any payments thatare late.
(6) If any payment on a contract with a private contractor to do work for the division orthe State Building Board is retained or withheld, it shall be retained or withheld and released asprovided in Section 13-8-5.
Amended by Chapter 229, 2010 General Session