South Carolina requires licenses for wellness reimbursement program administrators

Administrators must get a license before offering or operating a covered program. This covers administrators of plans that reimburse qualified medical expenses and are sold alongside individual or group health coverage. The underlying health coverage and self-insured group health plans are excluded. Applicants must pay a $5,000 initial fee and provide financial reports for the prior two calendar years. They must meet federal ERISA requirements or provide a federal agency document approving the specific program. A license is required before an administrator sells, offers, markets, promotes, or operates a covered program.

Administrators must give the employer a plain-language notice, and employers must pass it to participating employees. The employer gives the notice to each employee participating in the program. The notice must explain whether the program has federal approval or relies on ERISA compliance, describe tax uncertainty and the administrator’s duty to cover certain claims and losses, and recommend independent tax or legal advice. If the program causes a taxable event for an employer or employee, the administrator must defend and cover them for related claims, suits, and losses. The notice is due before enrollment and at each annual renewal.

Licensed insurance brokers may receive commissions without registering as program administrators, but must deal fairly and avoid misleading promotions. This applies to independent health insurance agents licensed in South Carolina who broker these programs. The exemption is from registering as an administrator to receive commissions; brokers remain subject to rules against misleading promotions and must act in good faith and deal fairly.

The Department of Insurance must report on the chapter’s implementation. The report concerns implementation of the wellness reimbursement program requirements in this chapter. Reports go to the House Labor, Commerce, and Industry Committee, the Senate Banking and Insurance Committee, and the General Assembly. They must cover implementation of the chapter’s program requirements and any other information requested by the General Assembly. The department must file a report every three years after the law took effect on May 19, 2026.