The online Human Resource services company, Zenefits, has officially asked the Utah Department of Insurance to reconsider its decision that the company is operating illegally in the state.
Late in November the Utah Department of Insurance informed the San Francisco based Zenefits that being an insurance broker and offering other free HR services is a violation of Utah law. On Monday, Zenefits sent the Insurance Department an official response. The strongly worded 17-page document argues that the department’s interpretation of the law is wrong and oversteps their authority. Parker Conrad is the CEO of Zenefits.
“The law was intended to prevent people from giving away free services in exchange for being made the broker," he says. "And the insurance commissioner is saying that, no, no, no, we’re just going to ignore that part of the language and we’re going to say giving away anything for free as an insurance broker in the state is illegal.”
Officials at the Insurance Department wouldn’t comment on tape, but they told KUER any official action isn’t likely to happen until possibly the end of 2nd quarter 2015. Zenefits’ challenge of the department’s recommendation also likely means that any resolution will have to go through the courts.
Conrad says he hopes Governor Herbert will step in to reverse the decision, but a spokesman from the Governor’s office says they are still looking into the issue and would like to see a legislative fix to the problem.