Capitol Preservation Board (State), Administration

Rule R131-13

Health Reform -- Health Insurance Coverage in State Contracts -- Implementation

Change in Proposed Rule

DAR File No.: 32778
Filed: 08/13/2009 03:35:57 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This change is made at the request of Hunter Finch, Governor's Office of Planning and Budget, to correct an incorrect citation in Section R131-13-4(3). The current rule and state law provides for and refers to the benchmark plan which is currently SelectHealth. It would be more efficient and appropriate to post the details of the benchmark plan on the Division of Facilities Construction and Management's (DFCM) website rather than having the contractors contact SelectHealth. This change will delete SelectHealth contact information and insert the DFCM website address.

Summary of the rule or change:

This rule change will correct an incorrect citation in Subsection R131-13-4(3). This change will delete SelectHealth contact information and insert the DFCM website address. (DAR NOTE: This change in proposed rule has been filed to make additional changes to a proposed new rule that was published in the July 15, 2009, issue of the Utah State Bulletin, on page 5. Underlining in the rule below indicates text that has been added since the publication of the proposed new rule mentioned above; strike out indicates text that has been deleted. You must view the change in proposed rule and the proposed new rule together to understand all of the changes that will be enforceable should the agency make this rule effective.)

State statutory or constitutional authorization for this rule:

• Subsection 63C-9-301(3)(a)
• Section 63C-9-403

Anticipated cost or savings to:

the state budget:

There is no anticipated cost or savings to the state budget as this is simply a change to an incorrect citation and relocation of information in the previously filed rule.

local governments:

There is no anticipated cost or savings to local government as this is simply a change to an incorrect citation and relocation of information in the previously filed rule.

small businesses:

There is no anticipated cost or savings to small businesses as this is simply a change to an incorrect citation and relocation of information in the previously filed rule.

persons other than small businesses, businesses, or local governmental entities:

There is no anticipated cost or savings to persons other than small businesses, businesses, or local government entities as this is simply a change to an incorrect citation and relocation of information in the previously filed rule.

Compliance costs for affected persons:

There are no anticipated compliance costs for affected persons because this is simply a change to an incorrect citation and relocation of information in the previously filed rule.

Comments by the department head on the fiscal impact the rule may have on businesses:

This change will not cause a fiscal impact because this simply corrects an incorrect citation. This change will not cause a fiscal impact because it is simply a relocation of information. It was determined it will be more efficient and appropriate to post the details of the benchmark plan on the DFCM website rather than having the contractors contact SelectHealth.

David H. Hart, AIA, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Capitol Preservation Board (State)
Administration
420 N STATE ST
SALT LAKE CITY, UT 84114-2110

Direct questions regarding this rule to:

• Sarah Whitney at the above address, by phone at 801-538-3074, by FAX at 801-538-3221, or by Internet E-mail at swhitney@utah.gov
• David Hart at the above address, by phone at 801-538-3074, by FAX at 801-538-3221, or by Internet E-mail at dhart@utah.gov
• La Priel Dye at the above address, by phone at 801-538-3240, by FAX at 801-538-3313, or by Internet E-mail at ldye@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/01/2009

This rule may become effective on:

10/08/2009

Authorized by:

David Hart, AIA, Executive Director

R131. Capitol Preservation Board (State), Administration.

R131-13. Health Reform -- Health Insurance Coverage in State Contracts -- Implementation.

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R131-13-4. Applicability of Rule.

(1) Except as provided in R131-13-4(2) below, R131-13 applies to all contracts entered into by the Board or the executive director, or on behalf of the Board, on or after July 1, 2009, if:

(a) the contract is for design and/or construction; and

(b)(i) the prime contract is in the amount of $1,500,000 or greater; or

(ii) a subcontract, at any tier, is in the amount of $750,000 or greater.

(2) R131-13 does not apply if:

(a) the application of R131-13 jeopardizes the receipt of federal funds;

(b) the contract is a sole source contract; or

(c) the contract is an emergency procurement.

(3) R131-13 does not apply to a change order as defined in Section [63G-6-102]63G-6-103, or a modification to a contract, when the contract does not meet the initial threshold required by R131-13-4(1).

(4) A person who intentionally uses change orders or contract modifications to circumvent the requirements of Subsection R131-13-4(1) is guilty of an infraction.

. . . . . . .

R131-13-7. Requirements and Procedures a Contractor Must Follow.

A contractor, including consultants and designers, must comply with the following requirements and procedures in order to demonstrate compliance with Section 63C-9-403.

(1) Demonstrating Compliance with Health Insurance Requirements. The following requirements must be met by a contractor, including consultants, designers and others under contract with the Board or the executive director that is subject to the requirements of R131-13 no later than the time of execution of the contract:

(a) demonstrate compliance by a written certification to the executive director that the contractor has and will maintain for the duration of the contract an offer of qualified health insurance coverage for the contractor's employees; and

(b) the contractor shall also provide such written certification prior to the execution of the contract, in regard to all subcontractors, including subconsultants, at any tier that are subject to the requirements of R131-13.

(2) Recertification. The executive director shall have the right to request a recertification by the contractor by submitting a written request to the contractor, and the contractor shall so comply with the written request within ten working days of receipt of the written request; however, in no case may the contractor be required to demonstrate such compliance more than twice in any 12-month period.

(3) Demonstrating Compliance with Actuarially Equivalent Determination. The actuarially equivalent determination required by Subsections 63C-9-403(1)(c)(i) and (iii) is met by the contractor if the contractor provides the executive director with a written statement of actuarial equivalency from either the Utah Insurance Department or an actuary selected by the contractor or the contractor's insurer.

For purposes of R131-13-7(3), actuarially equivalency is achieved by meeting or exceeding any of the following:

(a) In accordance with Section 26-40-106(2)(a), the largest insured commercial enrollment offered by a health maintenance organization in the State, [ which the Children's Health Insurance Program has determined is the SelectHealth plan currently offered by SelectHealth, 4646 West Lake Park Blvd, Salt Lake City, Utah 84130. The reference to SelectHealth herein is to provide an example of a qualifying plan and is not intended to endorse or indicate a preference for the use of SelectHealth as the insurance provider in any way; or] which details of the plan are provided on the website of the Division at http://dfcm.utah.gov/downloads/Health%20Insurance%20Benchmark.pdf; or

(b) provides coverage that is actuarially equivalent to 75% of the benefit plan determined under R131-13-7(3)(a) above and employer premium contributions as required by statute.

(4) The health insurance must be available upon the first of the month following the initial ninety days from the beginning of employment.

(5) Architect and Engineer Compliance Process. Architects and engineers that are subject to R131-13 must demonstrate compliance with R131-13 in any annual submittal.  During the procurement process and no later than the execution of the contract with the architect or engineer, the architect or engineer shall confirm that their applicable subcontractors or subconsultants meet the requirements of R131-13.

(6) General (Prime) Contractors Compliance Process. Contractors that are subject to R131-13 must demonstrate compliance with R131-13 for their own firm and any applicable subcontractors, in any pre-qualification process that may be used for the procurement. At the time of execution of the contract, the contractor shall confirm that their applicable subcontractors or subconsultants meet the requirements of R131-13.

(7) Notwithstanding any prequalification process, any contract subject to R131-13 shall contain a provision requiring compliance with R131-13 from the time of execution and throughout the duration of the contract.

(8) Hearing and Penalties.

(a) Hearing. Any hearing for any penalty under R131-13 conducted by the Board or executive director shall be conducted in the same manner as any hearing required for a suspension or debarment.

(b) Penalties that may be Imposed by the Board or Executive Director. The penalties that may be imposed by the Board or executive director if a contractor, consultant, subcontractor or subconsultant, at any tier, intentionally violates the provisions of R131-13 may include:

(i) a three-month suspension of the contractor or subcontractor from entering into future contracts with the State upon the first violation, regardless of which tier the contractor or subcontractor is involved with the future design and/or construction contract;

(ii) a six-month suspension of the contractor or subcontractor from entering into future contracts with the State upon the second violation, regardless of which tier the contractor or subcontractor is involved with the future design and/or construction contract;

(iii) an action for debarment of the contractor or subcontractor in accordance with Section 63G-6-804 upon the third or subsequent violation; and

(iv) monetary penalties which may not exceed 50% of the amount necessary to purchase qualified health insurance coverage for an employee and dependents of an employee of the contractor or subcontractor who was not offered qualified health insurance coverage during the duration of the contract.

(c) In addition to the penalties imposed above, a contractor, consultant, subcontractor or subconsultant who violates the provisions of R131-13 shall be liable to the employee for health care costs not covered by insurance.

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KEY: health insurance, contractors, contracts

Date of Enactment or Last Substantive Amendment: 2009

Authorizing, and Implemented or Interpreted Law: 63C-9-403; 63C-9-301(3)(a)