H.B. 188

This document includes House Committee Amendments incorporated into the bill on Mon, Feb 8, 2010 at 12:08 PM by jeyring. --> 1

WORKERS' COMPENSATION BENEFITS -
2 SOCIAL SECURITY OFFSET
3 2010 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Wayne A. Harper
6 Senate Sponsor: Karen Mayne
7
8 LONG TITLE
9 General Description:
10 This bill modifies the Workers' Compensation Act to remove a reduction in workers'
11 compensation benefits on the basis of the receipt of Social Security retirement benefits.
12 Highlighted Provisions:
13 This bill:
14 . repeals the reduction in workers' compensation benefits on the basis of the receipt of
15 Social Security retirement benefits;
16 . provides intent language;
17 . requires the Labor Commission to report to the Business and Labor Interim
18 Committee; and
19 . makes technical amendments.
20 Monies Appropriated in this Bill:
21 None
22 Other Special Clauses:
23 This bill provides for retrospective operation to correspond to the date a Utah Supreme
24 Court case addressing the reduction in benefits was issued.
25 Utah Code Sections Affected:
26 AMENDS:
27 34A-2-413, as last amended by Laws of Utah 2009, Chapter 158

28 Uncodified Material Affected:
29 ENACTS UNCODIFIED MATERIAL
30
31 Be it enacted by the Legislature of the state of Utah:
32 Section 1. Section 34A-2-413 is amended to read:
33 34A-2-413. Permanent total disability -- Amount of payments -- Rehabilitation.
34 (1) (a) In the case of a permanent total disability resulting from an industrial accident
35 or occupational disease, the employee shall receive compensation as outlined in this section.
36 (b) To establish entitlement to permanent total disability compensation, the employee
37 must prove by a preponderance of evidence that:
38 (i) the employee sustained a significant impairment or combination of impairments as a
39 result of the industrial accident or occupational disease that gives rise to the permanent total
40 disability entitlement;
41 (ii) the employee is permanently totally disabled; and
42 (iii) the industrial accident or occupational disease is the direct cause of the employee's
43 permanent total disability.
44 (c) To establish that an employee is permanently totally disabled the employee must
45 prove by a preponderance of the evidence that:
46 (i) the employee is not gainfully employed;
47 (ii) the employee has an impairment or combination of impairments that limit the
48 employee's ability to do basic work activities;
49 (iii) the industrial or occupationally caused impairment or combination of impairments
50 prevent the employee from performing the essential functions of the work activities for which
51 the employee has been qualified until the time of the industrial accident or occupational disease
52 that is the basis for the employee's permanent total disability claim; and
53 (iv) the employee cannot perform other work reasonably available, taking into
54 consideration the employee's:
55 (A) age;
56 (B) education;
57 (C) past work experience;
58 (D) medical capacity; and

59 (E) residual functional capacity.
60 (d) Evidence of an employee's entitlement to disability benefits other than those
61 provided under this chapter and Chapter 3, Utah Occupational Disease Act, if relevant:
62 (i) may be presented to the commission;
63 (ii) is not binding; and
64 (iii) creates no presumption of an entitlement under this chapter and Chapter 3, Utah
65 Occupational Disease Act.
66 (e) In determining under Subsections (1)(b) and (c) whether an employee cannot
67 perform other work reasonably available, the following may not be considered:
68 (i) whether the employee is incarcerated in a facility operated by or contracting with a
69 federal, state, county, or municipal government to house a criminal offender in either a secure
70 or nonsecure setting; or
71 (ii) whether the employee is not legally eligible to be employed because of a reason
72 unrelated to the impairment or combination of impairments.
73 (2) For permanent total disability compensation during the initial 312-week
74 entitlement, compensation is 66-2/3% of the employee's average weekly wage at the time of the
75 injury, limited as follows:
76 (a) compensation per week may not be more than 85% of the state average weekly
77 wage at the time of the injury;
78 (b) (i) subject to Subsection (2)(b)(ii), compensation per week may not be less than the
79 sum of $45 per week and:
80 (A) $5 for a dependent spouse; and
81 (B) $5 for each dependent child under the age of 18 years, up to a maximum of four
82 dependent minor children; and
83 (ii) the amount calculated under Subsection (2)(b)(i) may not exceed:
84 (A) the maximum established in Subsection (2)(a); or
85 (B) the average weekly wage of the employee at the time of the injury; and
86 (c) after the initial 312 weeks, the minimum weekly compensation rate under
87 Subsection (2)(b) is 36% of the current state average weekly wage, rounded to the nearest
88 dollar.
89 (3) This Subsection (3) applies to claims resulting from an accident or disease arising

90 out of and in the course of the employee's employment on or before June 30, 1994.
91 (a) The employer or its insurance carrier is liable for the initial 312 weeks of permanent
92 total disability compensation except as outlined in Section 34A-2-703 as in effect on the date
93 of injury.
94 (b) The employer or its insurance carrier may not be required to pay compensation for
95 any combination of disabilities of any kind, as provided in this section and Sections 34A-2-410
96 through 34A-2-412 and Part 5, Industrial Noise, in excess of the amount of compensation
97 payable over the initial 312 weeks at the applicable permanent total disability compensation
98 rate under Subsection (2).
99 (c) The Employers' Reinsurance Fund shall for an overpayment of compensation
100 described in Subsection (3)(b), reimburse the overpayment:
101 (i) to the employer or its insurance carrier; and
102 (ii) out of the Employers' Reinsurance Fund's liability to the employee.
103 (d) After an employee receives compensation from the employee's employer, its
104 insurance carrier, or the Employers' Reinsurance Fund for any combination of disabilities
105 amounting to 312 weeks of compensation at the applicable permanent total disability
106 compensation rate, the Employers' Reinsurance Fund shall pay all remaining permanent total
107 disability compensation.
108 (e) Employers' Reinsurance Fund payments shall commence immediately after the
109 employer or its insurance carrier satisfies its liability under this Subsection (3) or Section
110 34A-2-703 .
111 (4) This Subsection (4) applies to claims resulting from an accident or disease arising
112 out of and in the course of the employee's employment on or after July 1, 1994.
113 (a) The employer or its insurance carrier is liable for permanent total disability
114 compensation.
115 (b) The employer or its insurance carrier may not be required to pay compensation for
116 any combination of disabilities of any kind, as provided in this section and Sections 34A-2-410
117 through 34A-2-412 and Part 5, Industrial Noise, in excess of the amount of compensation
118 payable over the initial 312 weeks at the applicable permanent total disability compensation
119 rate under Subsection (2).
120 (c) The employer or its insurance carrier may recoup the overpayment of compensation

121 described in Subsection (4) by reasonably offsetting the overpayment against future liability
122 paid before or after the initial 312 weeks.
123 [(5) (a) Subject to Subsection (5)(b) and notwithstanding the minimum rate established
124 in Subsection (2), an employer, its insurance carrier, or the Employers' Reinsurance Fund, after
125 an employee receives compensation from the employer or the employer's insurance carrier for
126 any combination of disabilities amounting to 312 weeks of compensation at the applicable total
127 disability compensation rate, shall reduce the compensation payable:]
128 [(i) to the extent allowable by law;]
129 [(ii) by the dollar amount of 50% of the Social Security retirement benefits the
130 employee is eligible to receive for a four week period as of the first day the employee is eligible
131 to receive a Social Security retirement benefit; and]
132 [(iii) that the employee receives during the same period as the Social Security
133 retirement benefits.]
134 [(b) (i) An employer, its insurance carrier, or the Employers' Reinsurance Fund may
135 not reduce compensation payable under this section on or after May 5, 2008, to an employee by
136 an amount related to a cost-of-living increase to the Social Security retirement benefit that the
137 employee is first eligible to receive for a four week period, notwithstanding whether the
138 employee is injured on or before May 4, 2008.]
139 [(ii) For purposes of an employee whose compensation payable is reduced under this
140 Subsection (5) on or before May 4, 2008, the reduction is limited to the amount of the
141 reduction as of May 4, 2008.]
142 [(6)] (5) (a) A finding by the commission of permanent total disability is not final,
143 unless otherwise agreed to by the parties, until:
144 (i) an administrative law judge reviews a summary of reemployment activities
145 undertaken pursuant to Chapter 8a, Utah Injured Worker Reemployment Act;
146 (ii) the employer or its insurance carrier submits to the administrative law judge:
147 (A) a reemployment plan as prepared by a qualified rehabilitation provider reasonably
148 designed to return the employee to gainful employment; or
149 (B) notice that the employer or its insurance carrier will not submit a plan; and
150 (iii) the administrative law judge, after notice to the parties, holds a hearing, unless
151 otherwise stipulated, to:

152 (A) consider evidence regarding rehabilitation; and
153 (B) review any reemployment plan submitted by the employer or its insurance carrier
154 under Subsection [(6)] (5)(a)(ii).
155 (b) Before commencing the procedure required by Subsection [(6)] (5)(a), the
156 administrative law judge shall order:
157 (i) the initiation of permanent total disability compensation payments to provide for the
158 employee's subsistence; and
159 (ii) the payment of any undisputed disability or medical benefits due the employee.
160 (c) Notwithstanding Subsection [(6)] (5)(a), an order for payment of benefits described
161 in Subsection [(6)] (5)(b) is considered a final order for purposes of Section 34A-2-212 .
162 (d) The employer or its insurance carrier shall be given credit for any disability
163 payments made under Subsection [(6)] (5)(b) against its ultimate disability compensation
164 liability under this chapter or Chapter 3, Utah Occupational Disease Act.
165 (e) An employer or its insurance carrier may not be ordered to submit a reemployment
166 plan. If the employer or its insurance carrier voluntarily submits a plan, the plan is subject to
167 Subsections [(6)] (5)(e)(i) through (iii).
168 (i) The plan may include, but not require an employee to pay for:
169 (A) retraining;
170 (B) education;
171 (C) medical and disability compensation benefits;
172 (D) job placement services; or
173 (E) incentives calculated to facilitate reemployment.
174 (ii) The plan shall include payment of reasonable disability compensation to provide
175 for the employee's subsistence during the rehabilitation process.
176 (iii) The employer or its insurance carrier shall diligently pursue the reemployment
177 plan. The employer's or insurance carrier's failure to diligently pursue the reemployment plan
178 is cause for the administrative law judge on the administrative law judge's own motion to make
179 a final decision of permanent total disability.
180 (f) If a preponderance of the evidence shows that successful rehabilitation is not
181 possible, the administrative law judge shall order that the employee be paid weekly permanent
182 total disability compensation benefits.

183 (g) If a preponderance of the evidence shows that pursuant to a reemployment plan, as
184 prepared by a qualified rehabilitation provider and presented under Subsection [(6)] (5)(e), an
185 employee could immediately or without unreasonable delay return to work but for the
186 following, an administrative law judge shall order that the employee be denied the payment of
187 weekly permanent total disability compensation benefits:
188 (i) incarceration in a facility operated by or contracting with a federal, state, county, or
189 municipal government to house a criminal offender in either a secure or nonsecure setting; or
190 (ii) not being legally eligible to be employed because of a reason unrelated to the
191 impairment or combination of impairments.
192 [(7)] (6) (a) The period of benefits commences on the date the employee became
193 permanently totally disabled, as determined by a final order of the commission based on the
194 facts and evidence, and ends:
195 (i) with the death of the employee; or
196 (ii) when the employee is capable of returning to regular, steady work.
197 (b) An employer or its insurance carrier may provide or locate for a permanently totally
198 disabled employee reasonable, medically appropriate, part-time work in a job earning at least
199 minimum wage, except that the employee may not be required to accept the work to the extent
200 that it would disqualify the employee from Social Security disability benefits.
201 (c) An employee shall:
202 (i) fully cooperate in the placement and employment process; and
203 (ii) accept the reasonable, medically appropriate, part-time work.
204 (d) In a consecutive four-week period when an employee's gross income from the work
205 provided under Subsection [(7)] (6)(b) exceeds $500, the employer or insurance carrier may
206 reduce the employee's permanent total disability compensation by 50% of the employee's
207 income in excess of $500.
208 (e) If a work opportunity is not provided by the employer or its insurance carrier, a
209 permanently totally disabled employee may obtain medically appropriate, part-time work
210 subject to the offset provisions of Subsection [(7)] (6)(d).
211 (f) (i) The commission shall establish rules regarding the part-time work and offset.
212 (ii) The adjudication of disputes arising under this Subsection [(7)] (6) is governed by
213 Part 8, Adjudication.

214 (g) The employer or its insurance carrier has the burden of proof to show that
215 medically appropriate part-time work is available.
216 (h) The administrative law judge may:
217 (i) excuse an employee from participation in any work:
218 (A) that would require the employee to undertake work exceeding the employee's:
219 (I) medical capacity; or
220 (II) residual functional capacity; or
221 (B) for good cause; or
222 (ii) allow the employer or its insurance carrier to reduce permanent total disability
223 benefits as provided in Subsection [(7)] (6)(d) when reasonable, medically appropriate,
224 part-time work is offered, but the employee fails to fully cooperate.
225 [(8)] (7) When an employee is rehabilitated or the employee's rehabilitation is possible
226 but the employee has some loss of bodily function, the award shall be for permanent partial
227 disability.
228 [(9)] (8) As determined by an administrative law judge, an employee is not entitled to
229 disability compensation, unless the employee fully cooperates with any evaluation or
230 reemployment plan under this chapter or Chapter 3, Utah Occupational Disease Act. The
231 administrative law judge shall dismiss without prejudice the claim for benefits of an employee
232 if the administrative law judge finds that the employee fails to fully cooperate, unless the
233 administrative law judge states specific findings on the record justifying dismissal with
234 prejudice.
235 [(10)] (9) (a) The loss or permanent and complete loss of the use of the following
236 constitutes total and permanent disability that is compensated according to this section:
237 (i) both hands;
238 (ii) both arms;
239 (iii) both feet;
240 (iv) both legs;
241 (v) both eyes; or
242 (vi) any combination of two body members described in this Subsection [(10)] (9)(a).
243 (b) A finding of permanent total disability pursuant to Subsection [(10)] (9)(a) is final.
244 [(11)] (10) (a) An insurer or self-insured employer may periodically reexamine a

245 permanent total disability claim, except those based on Subsection [(10)] (9), for which the
246 insurer or self-insured employer had or has payment responsibility to determine whether the
247 employee remains permanently totally disabled.
248 (b) Reexamination may be conducted no more than once every three years after an
249 award is final, unless good cause is shown by the employer or its insurance carrier to allow
250 more frequent reexaminations.
251 (c) The reexamination may include:
252 (i) the review of medical records;
253 (ii) employee submission to one or more reasonable medical evaluations;
254 (iii) employee submission to one or more reasonable rehabilitation evaluations and
255 retraining efforts;
256 (iv) employee disclosure of Federal Income Tax Returns;
257 (v) employee certification of compliance with Section 34A-2-110 ; and
258 (vi) employee completion of one or more sworn affidavits or questionnaires approved
259 by the division.
260 (d) The insurer or self-insured employer shall pay for the cost of a reexamination with
261 appropriate employee reimbursement pursuant to rule for reasonable travel allowance and per
262 diem as well as reasonable expert witness fees incurred by the employee in supporting the
263 employee's claim for permanent total disability benefits at the time of reexamination.
264 (e) If an employee fails to fully cooperate in the reasonable reexamination of a
265 permanent total disability finding, an administrative law judge may order the suspension of the
266 employee's permanent total disability benefits until the employee cooperates with the
267 reexamination.
268 (f) (i) If the reexamination of a permanent total disability finding reveals evidence that
269 reasonably raises the issue of an employee's continued entitlement to permanent total disability
270 compensation benefits, an insurer or self-insured employer may petition the Division of
271 Adjudication for a rehearing on that issue. The insurer or self-insured employer shall include
272 with the petition, documentation supporting the insurer's or self-insured employer's belief that
273 the employee is no longer permanently totally disabled.
274 (ii) If the petition under Subsection [(11)] (10)(f)(i) demonstrates good cause, as
275 determined by the Division of Adjudication, an administrative law judge shall adjudicate the

276 issue at a hearing.
277 (iii) Evidence of an employee's participation in medically appropriate, part-time work
278 may not be the sole basis for termination of an employee's permanent total disability
279 entitlement, but the evidence of the employee's participation in medically appropriate, part-time
280 work under Subsection [(7)] (6) may be considered in the reexamination or hearing with other
281 evidence relating to the employee's status and condition.
282 (g) In accordance with Section 34A-1-309 , the administrative law judge may award
283 reasonable attorney fees to an attorney retained by an employee to represent the employee's
284 interests with respect to reexamination of the permanent total disability finding, except if the
285 employee does not prevail, the attorney fees shall be set at $1,000. The attorney fees awarded
286 shall be paid by the employer or its insurance carrier in addition to the permanent total
287 disability compensation benefits due.
288 (h) During the period of reexamination or adjudication, if the employee fully
289 cooperates, each insurer, self-insured employer, or the Employers' Reinsurance Fund shall
290 continue to pay the permanent total disability compensation benefits due the employee.
291 [(12)] (11) If any provision of this section, or the application of any provision to any
292 person or circumstance, is held invalid, the remainder of this section is given effect without the
293 invalid provision or application.
294 Section 2. Intent language -- Reporting by the Labor Commission.
295 (1) In passing this H.B. 188, it is the intent of the Legislature to address only the repeal
296 of the reduction of permanent total disability compensation by 50% of the Social Security
297 retirement benefits that an employee is also eligible to receive, which was found to be a
298 constitutional violation by the Utah Supreme Court in Merrill v. Utah Labor Commission,
299 2009 UT 26 (April 24, 2009). The Legislature does not intend for the passage of this bill to be
300 construed as a determination by the Legislature that a reduction or offset on the basis of the
301 receipt of Social Security benefits is against public policy under other circumstances.
302 (2) The Labor Commission shall report to the Business and Labor Interim Committee
303 by no later than the November 2010 interim meeting regarding:
304 (a) the status of cases for which the Employers' Reinsurance Fund pays permanent total
305 disability compensation;
306 (b) the process the Labor Commission follows to facilitate the implementation of the

307 Merrill decision H. [ by the Workers' Compensation Fund and private insurers ] .H ;
308 (c) the effect, if any, of implementing the Merrill decision on:
309 (i) the Employers' Reinsurance Fund;
310 (ii) assessments related to workers' compensation under Sections 34A-2-202 and
311 59-9-101 ; and
312 (iii) premiums for workers' compensation insurance;
313 (d) the status and nature of disputes, if any, that may arise in the implementation of the
314 Merrill decision; and
315 (e) the need, if any, for further legislative action.
316 Section 3. Retrospective operation.
317 This bill has retrospective operation to a payment of workers' compensation benefits
318 under Title 34A, Chapter 2, Workers' Compensation Act, or Chapter 3, Utah Occupational
319 Disease Act, made on or after April 24, 2009.




Legislative Review Note
as of 1-27-10 6:26 PM

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