ARIZONA HOUSE OF REPRESENTATIVES Fifty-fifth Legislature Second Regular Session
	Senate: COM DPA/SE 5-3-1-0 | 3^rd Read 16-12-2-0 House: COM DPA/SE 6-3-0-1

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SB 1278: labor organizations; fiduciary guidelines; definitions

NOW: third-party benefits organization; damages; definitions

Sponsor: Senator Mesnard, LD 17

House Engrossed

Overview

Outlines damages against a third-party benefits organization for certain benefits and an exemption from the liability.

History

Pursuant to A.R.S. § 23-1421, a labor organization that collects benefit monies or union dues is subject to similar fiduciary guidelines as required by employers or third-party administrators providing benefits to employees. These requirements include:

1) annually disclosing specified financial information to its members;

2) permitting a member to obtain various benefits of the member's own choosing instead of the benefits offered by the labor organization;

3) any fringe benefit contributions received by the labor organization being refunded to the employee; and

4) not accepting dues or benefits contributions for employees that have not voluntarily joined the union.

Provisions

1. Repeals current statute relating to fiduciary guidelines for labor organizations. (Sec. 1)

2. Entitles an employee to recover triple the calculated damages from a third-party benefits organization for benefits paid by the employee. (Sec. 2)

3. Entitles an employer to recover triple the calculated damages from a third-party benefits organization for benefits incurred by the employer. (Sec. 2)

4. Outlines what level of monies paid for benefits is excessive and the calculated damages that may be recovered from them. (Sec. 2)

5. Permits an employee to recover calculated damages, attributable to monies paid by the employer for that employee, if the employee notifies the employer of the intent to pursue such a claim and the employer does not object within 90 days. (Sec. 2)

6. Exempts a third-party benefits organization from liability for benefits if it:

a) provides a reconciliation to its member employees that contains specified information that allows an employee to determine the costs and expenses of the benefits provided by the third-party benefits organization;

b) allows an employee to opt out of any health, pension, vacation leave or sick leave benefits and allows the employer to withhold payment to the third-party benefits organization for that particular benefits category; and

c) eliminates any penalty for an employee or employer to terminate the relationship with the third-party benefits organization. (Sec. 2)

7. Requires a court to award a plaintiff any calculated damages that the plaintiff has suffered along with any other relief to which the plaintiff may be entitled. (Sec. 2)

8. Specifies that the court's award of damages is the exclusive remedy for a third-party benefits organization charging excessively for benefits. (Sec. 2)

9. Specifies that this cause of action against a third-party benefits organization for charging excessively for benefits does not create a cause of action between an employee and employer. (Sec. 2)

10. Applies the benefits liability and exemption to any third-party benefits organization that negotiates the rates or collects monies for employee benefits on behalf of a resident of Arizona or an employer that is located in Arizona. (Sec. 2)

11. Establishes a four-year statute of limitation for an action for damages against a third-party benefits organization for charging excessively for benefits. (Sec. 2)

12. Excludes from the benefits liability and exemption:

a) an insurer, insurance agent or investment management firm;

b) a third-party administrator preforming a purely administrative role; and

c) a government employee. (Sec. 2)

13. Defines benefits and third-party benefits organization. (Sec. 2)

14. Contains a severability clause. (Sec. 3)

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                        SB 1278

Initials PRB/NM          Page 0 House Engrossed

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