(1) For the purpose of this section, “provider” means any insurance company, corporation, person or other entity which provides benefits included in, or administrative services related to, cafeteria plans.

(2) The State Auditor shall compile a list of providers of cafeteria plans which shall contain those providers he deems acceptable to provide benefits or services related to a cafeteria plan of a state agency or local governmental entity. To be deemed acceptable, a provider shall:

(a) Be authorized to do business in this state or be a corporation organized or existing under the laws of this state;

(b) Maintain an office in this state with sufficient staff and equipment to render the contracted services for plans which are subject to this chapter as required by the State Auditor;

(c) Obtain and maintain a comprehensive dishonesty, destruction and disappearance bond in the amount designated by the State Auditor (a copy of which shall be maintained on file at all times in the office of the State Auditor, who shall be promptly notified by the surety on such bond of any change in or cancellation of such bond) unless the provider uses the type of administration which does not require the accumulation or escrow of employees’ or employers’ monies for reimbursement purposes; and

(d) Comply with the guidelines established by the State Auditor pertaining to state agencies’ or local governmental entities’ cafeteria plans.

The State Auditor shall revise the list annually unless an earlier revision is necessary to remove a provider who does not satisfy the requirements set forth in paragraphs (a) through (d) of this subsection.

(3) Only providers who appear on the most recent list compiled by the State Auditor shall, directly or indirectly, provide benefits included in or administrative services related to cafeteria plans of a state agency or local governmental entity; provided, however, that the State Tax Commission may, and is hereby authorized to, administer all or any part of the cafeteria plan which it has adopted, including providing benefits and performing administrative services relating thereto, without the use of a provider, and the State Tax Commission shall be exempt from paragraphs (a), (b) and (c) of subsection (2) of this section in administering the cafeteria plan. If the State Tax Commission administers only part of the cafeteria plan internally, that part of the plan administered outside of the State Tax Commission shall be administered by a provider who appears on the most recent list of providers compiled by the State Auditor, and such provider shall meet all of the requirements of subsection (2) of this section.

(4) A state agency or local governmental entity shall promptly notify the State Auditor of any complaint against a provider.

(5) All cafeteria plans authorized in Section 25-17-3, Mississippi Code of 1972, shall be in compliance with current Internal Revenue Service requirements promulgated in Sections 89 and 125 of the Internal Revenue Code. Documentation of such compliance shall be on file in the office of the State Auditor.

(6) The State Auditor may promulgate rules and regulations necessary to implement this section.