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Legislators Consider Fixes for Zenefits' Regulatory Issues

Brian Grimmett
File: Utah Representative Jim Dunnigan, R-Taylorsville

Several legislators are now saying that they are considering legislation to address some of the regulatory issues facing the online HR company Zenefits.

Soon to be Utah House Majority Leader Jim Dunnigan is an insurance broker when not tending to his responsibilities as a legislator. During his time on Capitol Hill he’s worked on several bills dealing with the industry, including the anti-rebating law being used against Zenefits. Dunnigan says he’s aware of those issues.

“If the law needs to be modified or updated, we’re going to take a look at that,” he says.

But that doesn’t mean Dunnigan sees the issue the same way that Zenefits does. What he says mirrors the arguments made by regulators at the Utah Insurance Department.

“The law requires that if you provide a service, you have to charge your client fare market value for it, unless it has a direct nexus to the insurance product that you’re offering,” Dunnigan says.

Representative John Knotwell, R-Herriman, says he’ll also be working on legislation, but his bill is likely to be more beneficial to the company.

Zenefits CEO Parker Conrad says he still believes that they aren’t doing anything illegal in the first place.

“You know, so it doesn’t seem like the legislative, sort of, solution seems unnecessary, and also fairly uncertain in terms of what happens with it,” Conrad says.

Conrad says they’re still hoping that Governor Herbert will step in to change the Insurance Department’s opinion, but in the meantime will work with legislators. 

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