Utah Administrative Code
The Utah Administrative Code is the body of all effective administrative rules as compiled and organized by the Division of Administrative Rules (see Subsection 63G-3-102(5); see also Sections 63G-3-701 and 702).
NOTE: For a list of rules that have been made effective since October 1, 2019, please see the codification segue page.
NOTE TO RULEFILING AGENCIES: Use the RTF version for submitting rule changes.
R305. Environmental Quality, Administration.
Rule R305-5. Health Reform -- Health Insurance Coverage in DEQ State Contracts -- Implementation.
As in effect on October 1, 2019
Table of Contents
- R305-5-1. Purpose.
- R305-5-2. Authority.
- R305-5-3. Definitions.
- R305-5-4. Applicability of Rule.
- R305-5-5. Compliance Requirement.
- R305-5-6. Demonstration of Compliance.
- R305-5-7. Effect of Failure to Comply.
- R305-5-8. Penalties, Sanctions, and Liabilities.
- Date of Enactment or Last Substantive Amendment
- Notice of Continuation
- Authorizing, Implemented, or Interpreted Law
The purpose of this rule is to comply with the provisions of UCA Section 19-1-206.
This rule is established under UCA Section19-1-206(6) which authorizes the Department of Environmental Quality to make rules governing health insurance in certain design and construction contracts.
(1) "Employee" means an "employee," "worker," or "operative" as defined in UCA Section 34A-2-104 who works in the State at least 30 hours per calendar week, and meets employer eligibility waiting requirements for health care insurance which may not exceed the first day of the calendar month following 90 days from the date of hire.
(2) "Health benefit plan" has the same meaning as provided in UCA Section 31A-1-301.
(3) "Qualified health insurance coverage" means at the time the contract is entered into or renewed:
(a) a health benefit plan and employer contribution level with a combined actuarial value at least actuarially equivalent to the combined actuarial value of the benchmark plan (posted at http://dfcm.utah.gov/downloads/Health%20Insurance%20Benchmark.pdf) determined by the Children's Health Insurance Program under UCA Section 26-40-106(2)(a), and a contribution level of 50% of the premium for the employee and the dependents of the employee who reside or work in the state, in which:
(i) the employer pays at least 50% of the premium for the employee and the dependents of the employee who reside or work in the state; and
(ii) for purposes of calculating actuarial equivalency under this Subsection (3)(a):
(A) rather than the benchmark plan's deductible, and the benchmark plan's out-of-pocket maximum based on income levels the deductible is $750 per individual and $2,250 per family; and the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
(B) dental coverage is not required; and
(C) other than UCA Section 26-40-106(2)(a), the provisions of UCA Section 26-40-106 do not apply; or
(b)(i) is a federally qualified high deductible health plan that, at a minimum, has a deductible that is either the lowest deductible permitted for a federally qualified high deductible health plan; or a deductible that is higher than the lowest deductible permitted for a federally qualified high deductible health plan, but includes an employer contribution to a health savings account in a dollar amount at least equal to the dollar amount difference between the lowest deductible permitted for a federally qualified high deductible plan and the deductible for the employer offered federally qualified high deductible plan;
(ii) an out-of-pocket maximum that does not exceed three times the amount of the annual deductible; and
(iii) under which the employer pays 75% of the premium for the employee and the dependents of the employee who work or reside in the state.
(4) "Subcontractor" has the same meaning provided for in UCA Section 63A-5-208.
(1)(a) Except as provided in Subsection R305-5-4(2) below, this Rule R305-5 applies to a design or construction contract entered into by or delegated to the department or a division or board of the department on or after July 1, 2009, and to a prime contractor or subcontractor in accordance with Subsection (1)(b)
(b)(i) A prime contractor is subject to this section if the prime contract is in the amount of $1,500,000 or greater.
(ii) A subcontractor is subject to this section if a subcontract is in the amount of $750,000 or greater.
(2) This Rule R305-5 does not apply to contracts entered into by the department or a division or board of the department if:
(a) the application of this Rule R305-5 jeopardizes the receipt of federal funds;
(b) the contract or agreement is between the department or a division or board of the department and another agency of the state, the federal government, another state, an interstate agency, a political subdivision of this state, or a political subdivision of another state;
(c) the executive director determines that applying the requirements of this section to a particular contract interferes with the effective response to an immediate health and safety threat from the environment; or
(d) the contract is a sole source contract or an emergency procurement.
(3) This Rule R305-5 does not apply to a change order as defined in UCA Section 63G-6-103, or a modification to a contract, when the contract does not meet the initial threshold required by R305-5-4(1).
A contractor or subcontractor that is subject to the requirements of R305-5 shall have and will maintain an offer of qualified health insurance coverage for the contractor's or subcontractor's employees and dependents during the duration of the contract.
(1) A contractor or subcontractor subject to this rule R305-5 shall demonstrate compliance with R305-5-5 by submitting to the department a written certification of compliance initially no later than the time of the execution of the contract by the contractor and thereafter on an annual basis unless the department requests a biannual certification.
(2) The written certification of compliance shall include information demonstrating that qualified health insurance coverage as defined in R305-5-3(3) is being offered. The actuarially equivalent determination in R305-5-3(3) is met by the contractor or subcontractor if the contractor or subcontractor provides the department with a written statement of actuarial equivalency from either the Utah Insurance Department, an actuary selected by the contractor or subcontractor or their insurer, or an underwriter who is responsible for developing the employer group's premium rates.
The failure of a contractor or subcontractor to provide qualified health insurance coverage as required by R305-5-5 may not be the basis for a protest or other action from a prospective bidder, offeror, or contractor under UCA Section 63G-6-801 or any other provision in UCA 63G, Chapter 6, Part 8, Legal and Contractual Remedies, and 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 or construction.
(1) Pursuant to UCA Section 19-1-206(4)(b), a person who intentionally uses change orders or contract modifications to circumvent the requirements of subsection R305-5-5 and R305-5-6 is guilty of an infraction.
(2) Pursuant to UCA Section 19-1-303 and UCA Section 19-1-206(6), a contractor or subcontractor who fails to comply with R305-5-5 and R305-5-6 is subject to an administrative civil penalty of up to $5000 per day, except that monetary penalties may not exceed 50% of the amount necessary to purchase qualified health insurance coverage for an employee and the dependents of an employee of the contractor or subcontractor who was not offered qualified health insurance coverage during the duration of the contract.
(3) If a contractor or subcontractor intentionally violates the provisions of R305-5-5, the contractor or subcontractor is subject to:
(a) 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;
(b) 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; and
(c) an action for debarment of the contractor or subcontractor in accordance with UCA Section 63G-6-804 upon the third or subsequent violation.
(4)(a) In addition to the penalties imposed under R305-5-8 and the referenced statutes and rules, a contractor or subcontractor who intentionally violates the provisions of UCA Section 19-1-206 and R305-5, pursuant to UCA Section 19-1-206(7), shall be liable to the employee for health care costs that would have been covered by qualified health insurance coverage.
(b) An employer has an affirmative defense to a cause of action under Subsection 4(a) if:
(i) the employer relied in good faith on a written statement of actuarial equivalency provided by an actuary, or underwriter who is responsible for developing the employer group's premium rates; or
(ii) the department determines that compliance is not required under the provisions of R305-5-4(2) or (3).
contract requirements, health insurance
June 23, 2010
February 9, 2015
For questions regarding the content or application of rules under Title R305, please contact the promulgating agency (Environmental Quality, Administration). A list of agencies with links to their homepages is available at http://www.utah.gov/government/agencylist.html or from http://www.rules.utah.gov/contact/agencycontacts.htm.