AZ SB1278

Repeals and replaces section 23-1421 of Arizona Revised Statutes to establish liability for third-party benefits organizations that manage employee benefits.

Employees and employers can recover three times calculated damages from third-party benefits organizations when benefit costs exceed 120% of market equivalents for health, pension, vacation, or sick leave benefits.

Third-party benefits organizations are exempt from liability if they provide annual reconciliation statements detailing rates, expenses, and revenues; allow employees to opt out of benefits; and eliminate penalties for termination.

Applies a four-year statute of limitations for damage claims brought in superior court, with this section serving as the exclusive remedy for violations.

Exempts insurers, insurance agents, investment firms, third-party administrators performing purely administrative roles, and federal or state government employees from this section's requirements.