Download Zipped Introduced WP 8.0 SB0160.ZIP 14,146 Bytes
[Status][Bill Documents][Fiscal Note][Bills Directory]

S.B. 160

             1     

UNINSURED EMPLOYERS' FUND

             2     
AMENDMENTS

             3     
2000 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Ed P. Mayne

             6      AN ACT RELATING TO LABOR; LIMITING SCOPE OF THE UNINSURED EMPLOYERS'
             7      FUND; MAKING TECHNICAL CHANGES; AND PROVIDING AN EFFECTIVE DATE.
             8      This act affects sections of Utah Code Annotated 1953 as follows:
             9      AMENDS:
             10          34A-2-601, as last amended by Chapter 45 and renumbered and amended by Chapter 375,
             11      Laws of Utah 1997
             12          34A-2-704, as renumbered and amended by Chapter 375, Laws of Utah 1997
             13      Be it enacted by the Legislature of the state of Utah:
             14          Section 1. Section 34A-2-601 is amended to read:
             15           34A-2-601. Medical panel -- Medical director or medical consultants -- Discretionary
             16      authority of Division of Adjudication to refer case -- Findings and reports -- Objections to
             17      report -- Hearing -- Expenses.
             18          (1) (a) Upon the filing of a claim for compensation for injury by accident, or for death,
             19      arising out of and in the course of employment, and if the employer or its insurance carrier denies
             20      liability, the Division of Adjudication may refer the medical aspects of the case to a medical panel
             21      appointed by an administrative law judge.
             22          (b) When a claim for compensation based upon disability or death due to an occupational
             23      disease is filed with the Division of Adjudication, an administrative law judge shall, except upon
             24      stipulation of all parties, appoint an impartial medical panel.
             25          (c) A medical panel shall consist of one or more physicians specializing in the treatment
             26      of the disease or condition involved in the claim.
             27          (d) As an alternative method of obtaining an impartial medical evaluation of the medical


             28      aspects of a controverted case, the division may employ a medical director or medical consultants
             29      on a full-time or part-time basis for the purpose of evaluating the medical evidence and advising
             30      an administrative law judge with respect to the administrative law judge's ultimate fact-finding
             31      responsibility.
             32          (e) If all parties agree to the use of a medical director or medical consultants, the medical
             33      director or medical consultants shall be allowed to function in the same manner and under the same
             34      procedures as required of a medical panel.
             35          (2) (a) The medical panel, medical director, or medical consultants shall make such study,
             36      take such X-rays, and perform such tests, including post-mortem examinations if authorized by the
             37      administrative law judge, as it may determine to be necessary or desirable.
             38          (b) The medical panel, medical director, or medical consultants shall make:
             39          (i) a report in writing to the administrative law judge in a form prescribed by the Division
             40      of Adjudication; and
             41          (ii) additional findings as the administrative law judge may require.
             42          (c) In occupational disease cases, in addition to the requirements of Subsection (2)(b), the
             43      panel shall certify to the administrative law judge:
             44          (i) the extent, if any, of the disability of the claimant from performing work for
             45      remuneration or profit;
             46          (ii) whether the sole cause of the disability or death, in the opinion of the panel, results
             47      from the occupational disease; and
             48          (iii) whether any other causes have aggravated, prolonged, accelerated, or in any way
             49      contributed to the disability or death, and if so, the extent in percentage to which the other causes
             50      have so contributed.
             51          (d) (i) The administrative law judge shall promptly distribute full copies of the report by
             52      certified mail with return receipt requested to:
             53          (A) the applicant;
             54          (B) the employer; and
             55          (C) the employer's insurance carrier.
             56          (ii) Within 15 days after the report is deposited in the United States post office, the
             57      applicant, the employer, or its insurance carrier may file with the administrative law judge written
             58      objections to the report.


             59          (iii) If no written objections are filed within that period, the report is considered admitted
             60      in evidence.
             61          (e) The administrative law judge may base the administrative law judge's finding and
             62      decision on the report of the panel, medical director, or medical consultants, but is not bound by
             63      the report if other substantial conflicting evidence in the case supports a contrary finding.
             64          (f) (i) If objections to the report are filed, the administrative law judge may set the case for
             65      hearing to determine the facts and issues involved.
             66          (ii) At the hearing, any party so desiring may request the administrative law judge to have
             67      the chair of the medical panel, the medical director, or the medical consultants present at the
             68      hearing for examination and cross-examination.
             69          (iii) For good cause shown, the administrative law judge may order other members of the
             70      panel, with or without the chair or the medical director or medical consultants, to be present at the
             71      hearing for examination and cross-examination.
             72          (g) The written report of the panel, medical director, or medical consultants may be
             73      received as an exhibit at the hearing, but may not be considered as evidence in the case except as
             74      far as it is sustained by the testimony admitted.
             75          (h) For any claim referred under Subsection (1) to a medical panel, medical director, or
             76      medical consultant before July 1, 1997, the commission shall pay out of the [Employers]
             77      Employers' Reinsurance Fund established in Section 34A-2-702 :
             78          (i) expenses of the study and report of the medical panel, medical director, or medical
             79      consultant; and
             80          (ii) the expenses of the panel's, director's, or consultant's appearance before the
             81      administrative law judge.
             82          (i) (i) For any claim referred under Subsection (1) to a medical panel, medical director, or
             83      medical consultant on or after July 1, 1997, the commission shall pay out of the Uninsured
             84      Employers' Fund established in Section 34A-2-704 the expenses of:
             85          [(i) the expenses of] (A) the study and report of the medical panel, medical director, or
             86      medical consultant; and
             87          [(ii) the expenses of] (B) the panel's, director's, or consultant's appearance before the
             88      administrative law judge.
             89          (ii) Notwithstanding Section 34A-2-704 , the expenses described in Subsection (2)(i)(i)


             90      shall be paid from the Uninsured Employers' Fund whether or not the employment relationship
             91      during which the industrial accident or occupational disease occurred is localized in Utah as
             92      described in Subsection 34A-2-704 (20).
             93          Section 2. Section 34A-2-704 is amended to read:
             94           34A-2-704. Uninsured Employers' Fund.
             95          (1) (a) There is created an Uninsured Employers' Fund. The Uninsured Employers' Fund
             96      has the purpose of assisting in the payment of workers' compensation benefits to any person
             97      entitled to [them] the benefits, if:
             98          (i) that person's employer:
             99          [(i)] (A) is individually, jointly, or severally liable to pay the benefits; and
             100          [(ii) (A)] (B) (I) becomes or is insolvent;
             101          [(B)] (II) appoints or has appointed a receiver; or
             102          [(C)] (III) otherwise does not have sufficient funds, insurance, sureties, or other security
             103      to cover workers' compensation liabilities[.]; and
             104          (ii) the employment relationship between that person and the person's employer is
             105      localized within the state as provided in Subsection (20).
             106          (b) The Uninsured Employers' Fund succeeds to all monies previously held in the Default
             107      Indemnity Fund.
             108          (c) If it becomes necessary to pay benefits, the Uninsured Employers' Fund is liable for all
             109      obligations of the employer as set forth in this chapter and Chapter 3, Utah Occupational Disease
             110      Act, with the exception of penalties on those obligations.
             111          (2) (a) Monies for the Uninsured Employers' Fund shall be deposited into the Uninsured
             112      Employers' Fund in accordance with Subsection 59-9-101 (2).
             113          (b) The commissioner shall appoint an administrator of the Uninsured Employers' Fund.
             114          (c) The state treasurer is the custodian of the Uninsured Employers' Fund, and the
             115      administrator shall make provisions for and direct its distribution.
             116          (3) Reasonable costs of administering the Uninsured Employers' Fund or other fees
             117      required to be paid by the Uninsured Employers' Fund may be paid from the Uninsured Employers'
             118      Fund.
             119          (4) The state treasurer shall:
             120          (a) receive workers' compensation premium assessments from the State Tax Commission;


             121      and
             122          (b) invest the Uninsured Employers' Fund to ensure maximum investment return for both
             123      long and short term investments in accordance with Section 51-7-12.5 .
             124          (5) (a) The administrator may employ, retain, or appoint counsel to represent the
             125      Uninsured Employers' Fund in all proceedings brought to enforce claims against or on behalf of
             126      the Uninsured Employers' Fund.
             127          (b) If requested by the commission, the following shall aid in the representation of the
             128      Uninsured Employers' Fund:
             129          (i) the attorney general[,]; or
             130          (ii) the city attorney, or county attorney of the locality in which:
             131          (A) any investigation, hearing, or trial under this chapter or Chapter 3, Utah Occupational
             132      Disease Act, is pending[, or in which];
             133          (B) the employee resides; or
             134          (C) an employer:
             135          (I) resides; or
             136          (II) is doing business[, shall aid in the representation of the Fund].
             137          (6) To the extent of the compensation and other benefits paid or payable to or on behalf
             138      of an employee or the employee's dependents from the Uninsured Employers' Fund, the Uninsured
             139      Employers' Fund, by subrogation, has all the rights, powers, and benefits of the employee or the
             140      employee's dependents against the employer failing to make the compensation payments.
             141          (7) (a) The receiver, trustee, liquidator, or statutory successor of an insolvent employer is
             142      bound by settlements of covered claims by the Uninsured Employers' Fund.
             143          (b) The court with jurisdiction shall grant all payments made under this section a priority
             144      equal to that to which the claimant would have been entitled in the absence of this section against
             145      the assets of the insolvent employer.
             146          (c) The expenses of the Uninsured Employers' Fund in handling claims shall be accorded
             147      the same priority as the liquidator's expenses.
             148          (8) (a) The administrator shall periodically file with the receiver, trustee, or liquidator of
             149      the insolvent employer or insurance carrier:
             150          (i) statements of the covered claims paid by the Uninsured Employers' Fund; and
             151          (ii) estimates of anticipated claims against the Uninsured Employers' Fund [which].


             152          (b) The filings under Subsection (8)(a) shall preserve the rights of the Uninsured
             153      Employers' Fund for claims against the assets of the insolvent employer.
             154          (9) When any injury or death for which compensation is payable from the Uninsured
             155      Employers' Fund has been caused by the wrongful act or neglect of another person not in the same
             156      employment, the Uninsured Employers' Fund has the same rights as allowed under Section
             157      34A-2-106 .
             158          (10) The Uninsured Employers' Fund, subject to approval of the administrator, shall
             159      discharge its obligations by:
             160          (a) adjusting its own claims; or
             161          (b) contracting with an adjusting company, risk management company, insurance
             162      company, or other company that has expertise and capabilities in adjusting and paying workers'
             163      compensation claims.
             164          (11) (a) For the purpose of maintaining [this] the Uninsured Employers' Fund, an
             165      administrative law judge, upon rendering a decision with respect to any claim for workers'
             166      compensation benefits in which an uninsured employer was duly joined as a party, shall:
             167          (i) order the uninsured employer to reimburse the Uninsured Employers' Fund for all
             168      benefits paid to or on behalf of an injured employee by the Uninsured Employers' Fund along with
             169      interest, costs, and attorneys' fees; and
             170          (ii) impose a penalty against the uninsured employer of 15% of the value of the total award
             171      in connection with the claim that shall be paid into the Uninsured Employers' Fund.
             172          (b) Awards may be docketed as other awards under this chapter and Chapter 3, Utah
             173      Occupational Disease Act.
             174          (12) The liability of the state, the commission, and the state treasurer, with respect to
             175      payment of any compensation benefits, expenses, fees, or disbursement properly chargeable against
             176      the Uninsured Employers' Fund, is limited to the assets in the Uninsured Employers' Fund, and
             177      they are not otherwise in any way liable for the making of any payment.
             178          (13) The commission may make reasonable rules for the processing and payment of claims
             179      for compensation from the Uninsured Employers' Fund.
             180          (14) (a) If it becomes necessary for the Uninsured Employers' Fund to pay benefits under
             181      this section to any employee of an insolvent self-insured employer, the Uninsured Employers' Fund
             182      may assess all other self-insured employers amounts necessary to pay:


             183          (i) the obligations of the Uninsured Employers' Fund subsequent to an insolvency;
             184          (ii) the expenses of handling covered claims subsequent to an insolvency;
             185          (iii) the cost of examinations under Subsection (15); and
             186          (iv) other expenses authorized by this section.
             187          (b) The assessments of each self-insured employer shall be in the proportion that the
             188      manual premium of the self-insured employer for the preceding calendar year bears to the manual
             189      premium of all self-insured employers for the preceding calendar year.
             190          (c) Each self-insured employer shall be notified of the employer's assessment not later than
             191      30 days before the assessment is due.
             192          (d) (i) A self-insured employer may not be assessed in any year an amount greater than 2%
             193      of that self-insured employer's manual premium for the preceding calendar year.
             194          (ii) If the maximum assessment does not provide in any one year an amount sufficient to
             195      make all necessary payments from the Uninsured Employers' Fund for one or more insolvent
             196      self-insured employers, the unpaid portion shall be paid as soon as funds become available.
             197          (e) All self-insured employers are liable under this section for a period not to exceed three
             198      years after the self-insured employer's voluntary or involuntary termination of self-insurance
             199      privileges within this state.
             200          (f) This Subsection (14) does not apply to claims made against an insolvent self-insured
             201      employer if the insolvency occurred prior to July 1, 1986.
             202          (15) (a) A self-insured employer shall notify the division of any information indicating that
             203      any self-insured employer may be insolvent or in a financial condition hazardous to its employees
             204      or the public.
             205          (b) Upon receipt of the notification described in Subsection (15)(a) and with good cause
             206      appearing, the division may order an examination of that self-insured employer.
             207          (c) The cost of the examination ordered under Subsection (15)(b) shall be assessed against
             208      all self-insured employers as provided in Subsection (14).
             209          (d) The results of the examination ordered under Subsection (15)(b) shall be kept
             210      confidential.
             211          (16) In any claim against an employer by the Uninsured Employers' Fund, or by or on
             212      behalf of the employee to whom or to whose dependents compensation and other benefits are paid
             213      or payable from the Uninsured Employers' Fund, the burden of proof is on the employer or other


             214      party in interest objecting to the claim. The claim is presumed to be valid up to the full amount
             215      of workers' compensation benefits claimed by the employee or the employee's dependents. This
             216      Subsection (16) applies whether the claim is filed in court or in an adjudicative proceeding under
             217      the authority of the commission.
             218          (17) A partner in a partnership or an owner of a sole proprietorship may not recover
             219      compensation or other benefits from the Uninsured Employers' Fund if:
             220          (a) the person is not included as an employee under Subsection 34A-2-104 (3); or
             221          (b) the person is included as an employee under Subsection 34A-2-104 (3), but:
             222          (i) the person's employer fails to insure or otherwise provide adequate payment of direct
             223      compensation; and
             224          (ii) the failure described in Subsection (17)(b)(i) is attributable to an act or omission over
             225      which the person had or shared control or responsibility.
             226          (18) A director or officer of a corporation may not recover compensation or other benefits
             227      from the Uninsured Employers' Fund if the director or officer is excluded from coverage under
             228      Subsection 34A-2-104 (4).
             229          (19) The Uninsured Employers' Fund:
             230          (a) shall be:
             231          (i) used in accordance with this section only for:
             232          (A) the purpose of assisting in the payment of workers' compensation benefits in
             233      accordance with Subsection (1); and
             234          (B) in accordance with Subsection (3), payment of:
             235          (I) reasonable costs of administering the Uninsured Employers' Fund; or
             236          (II) fees required to be paid by the Uninsured Employers' Fund; and
             237          (ii) expended according to processes that can be verified by audit; and
             238          (b) may not be used for:
             239          (i) administrative costs unrelated to the Uninsured Employers' Fund; or
             240          (ii) any activity of the commission other than an activity described in Subsection (19)(a).
             241          (20) (a) For purposes of Subsection (1), an employment relationship is localized in the
             242      state if:
             243          (i) (A) the employer who is liable for the benefits has a business premise in the state; and
             244          (B) (I) the contract for hire is entered into in the state; or


             245          (II) the employee regularly performs work duties in the state for the employer who is liable
             246      for the benefits; or
             247          (ii) the employee is:
             248          (A) a resident of the state; and
             249          (B) regularly performs work duties in the state for the employer who is liable for the
             250      benefits.
             251          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             252      commission shall by rule define what constitutes regularly performing work duties in the state.
             253          Section 3. Effective date.
             254          This act takes effect on July 1, 2000.




Legislative Review Note
    as of 1-25-00 10:41 AM


This legislation raises the following constitutional or statutory concerns:

This legislation prohibits persons that may be eligible for workers' compensation benefits under
Utah law from receiving benefits from the Uninsured Employers' Fund if that person's employment
is not localized within the state. This prohibition may raise constitutional concerns including
whether it violates a constitutionally protected "right to travel." However, the United States
Supreme Court has recognized that the constitutional protections of the right to travel are not
absolute and has indicated that a state may treat citizens of other states differently than its own
citizens if there is a substantial reason for that difference.

Office of Legislative Research and General Counsel


[Bill Documents][Bills Directory]