Bill
SB 443
Local governments must require annual full disclosures of all compensation paid by the government to benefit providers, and affirm none was given to employees or officials.
Status
- Enacted. Approved by the Governor on October 13, 2025; chaptered as Chapter 756, Statutes of 2025.
- Effective upon enactment.
Purpose / Intent
- To increase transparency in how counties and cities contract for and pay for employee benefits by requiring benefit vendors to disclose annually all compensation received from the local government and to affirm that those payments have not been passed on to local employees or elected officials.
Key provisions
- Annual disclosure requirement: Every provider of life, health, or other insurance or fringe benefits (including voluntary benefits) for county or city employees, dependents, or retirees must submit, on an annual basis, a full compensation disclosure to the county or city that pays the provider.
- Who is a “provider”: expressly includes (but is not limited to) agents, brokers, consultants, third‑party administrators (TPAs), pharmacy benefits managers (PBMs), and insurance companies.
- Required contents of the disclosure:
1. A full accounting of all income paid, directly or indirectly, by the county/city to the provider — examples listed include commissions, bonuses, fees (including consulting or administrative fees), and management compensation tied to shared‑risk arrangements.
2. An explicit affirmation that none of the compensation the provider received from the county/city was provided, directly or indirectly, to any county/city employee or elected official.
- Statutory placement: adds a new section to Article 23 of Chapter 153A (counties) and a new section to Article 21 of Chapter 160A (cities) of the North Carolina General Statutes.
- Effective timing: the requirement applies on and after the law’s effective date (upon enactment).
Who is affected
- Local governments (counties and municipalities) that purchase or sponsor employee benefit plans.
- Benefit providers and vendors (insurers, brokers, PBMs, TPAs, consultants, etc.) that receive payments from local governments.
- Local government employees, dependents, and retirees covered by those benefit programs.
- Elected local officials (the statute contains the provider affirmation regarding payments to employees/officials).
Implementation and procedural notes
- Frequency: disclosures are required annually; the bill does not specify a precise submission deadline (e.g., fiscal year date) — that may be left to local implementation.
- Enforcement and penalties: the statutory text requires disclosure and an affirmation but does not, on its face, specify enforcement mechanisms, sanctions for noncompliance, or public disclosure requirements for submitted materials.
- Confidentiality and procurement issues: the law mandates “full” disclosure of compensation; it does not explicitly address trade‑secret or proprietary information exceptions, or how disclosures interact with existing procurement confidentiality protections.
- Administrative impact: local governments will need procedures to collect, review, and possibly act on disclosures; providers will need processes to produce detailed annual compensation reports. Costs are likely modest per entity but could be material for small providers or small local governments.
Potential policy implications
- Increased transparency in vendor compensation and potential reduction in conflicts of interest or undisclosed payments to employees/officials.
- May prompt changes in contracting practices or contract terms to address reporting, confidentiality, or vendor compensation structures.
- Raises questions about whether further implementing guidance or amendments (e.g., deadlines, enforcement/penalties, confidentiality protections) will be needed for consistent statewide application.
Text highlights (directives)
- “Each provider … shall, on an annual basis, submit to the county a full compensation disclosure of all funds paid to the provider by the county .”
- Disclosure must include “all income paid, directly or indirectly” (commissions, bonuses, consulting/administrative fees, management compensation for shared‑risk arrangements).
- Disclosure must include an affirmation “that none of the compensation paid by the county has been provided to any county employee or elected official, directly or indirectly.”
Prepared by: Legislative analyst
Date: 2025 (session materials reviewed through enactment date)
Compiled from official sources — confirm details with the bill’s official record.
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