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First Substitute H.B. 384
8 LONG TITLE
9 General Description:
10 This bill modifies the Workers' Compensation Act to address an employee's duties
11 related to workers' compensation.
12 Highlighted Provisions:
13 This bill:
14 . defines terms;
15 . addresses reductions in disability compensation under certain circumstances;
16 . provides for adjudication;
17 . addresses application of certain provisions to a local governmental entity or state
18 institution of higher education;
19 . addresses the scope of the provisions;
20 . provides for rulemaking;
21 . addresses incarceration or unlawful employment related to permanent total
22 disabilities; and
23 . makes technical changes.
24 Monies Appropriated in this Bill:
26 Other Special Clauses:
27 This bill takes effect on July 1, 2008.
28 Utah Code Sections Affected:
30 34A-2-410, as last amended by Laws of Utah 2005, Chapter 81
31 34A-2-413, as last amended by Laws of Utah 2006, Chapter 295
33 34A-2-410.5, Utah Code Annotated 1953
35 Be it enacted by the Legislature of the state of Utah:
36 Section 1. Section 34A-2-410 is amended to read:
37 34A-2-410. Temporary disability -- Amount of payments -- State average weekly
38 wage defined.
39 (1) (a) [
40 long as the disability is total, the employee shall receive 66-2/3% of that employee's average
41 weekly wages at the time of the injury but:
42 (i) not more than a maximum of 100% of the state average weekly wage at the time of
43 the injury per week; and
44 (ii) (A) subject to Subsections (1)(a)(ii)(B) and (C), not less than a minimum of $45
45 per week plus:
46 (I) $5 for a dependent spouse; and
47 (II) $5 for each dependent child under the age of 18 years, up to a maximum of four
48 dependent children[
49 (B) not to exceed the average weekly wage of the employee at the time of the injury[
51 (C) not to exceed 100% of the state average weekly wage at the time of the injury per
53 (b) In no case shall the compensation benefits exceed 312 weeks at the rate of 100% of
54 the state average weekly wage at the time of the injury over a period of 12 years from the date
55 of the injury.
56 (2) [
57 employee [
58 is available to the employee from the employer, temporary disability benefits shall continue to
59 be paid.
60 (3) The "state average weekly wage" as referred to in this chapter and Chapter 3, Utah
61 Occupational Disease Act, shall be determined by the commission as follows:
62 (a) On or before June 1 of each year, the total wages reported on contribution reports to
63 the Unemployment Insurance Division for the preceding calendar year shall be divided by the
64 average monthly number of insured workers determined by dividing the total insured workers
65 reported for the preceding year by 12.
66 (b) The average annual wage obtained under Subsection (3)(a) shall be divided by 52.
67 (c) The average weekly wage determined under Subsection (3)(b) is rounded to the
68 nearest dollar.
69 (4) The state average weekly wage determined under Subsection (3) shall be used as
70 the basis for computing the maximum compensation rate for:
71 (a) injuries or disabilities arising from occupational disease that occurred during the
73 (b) any death resulting from the injuries or disabilities arising from occupational
75 (5) The commission may reduce or terminate temporary disability compensation in
76 accordance with Section 34-2-410.5 .
77 Section 2. Section 34A-2-410.5 is enacted to read:
78 34A-2-410.5. Employee cooperation with reemployment.
79 (1) As used in this section:
80 (a) "Controlled substance" is as defined in Section 58-37-2 .
81 (b) "Correctional facility" means:
82 (i) a correctional facility as defined in Section 76-8-311.3 ; or
83 (ii) a facility operated by or contracting with the federal government to house a
84 criminal offender in either a secure or nonsecure setting.
85 (c) "Disability claim" means a claim for compensation for:
86 (i) a temporary total disability benefit; or
87 (ii) a temporary partial disability benefit.
88 (d) "Local governmental entity" is as defined in Section 34-41-101 .
89 (e) "Reemployment" means employment that:
90 (i) is after an accident or occupational disease that is the basis for a disability claim;
92 (ii) in a manner consistent with Subsection (2)(b), offers to an employee an opportunity
93 for earnings, considering the employee's:
94 (A) education;
95 (B) experience; and
96 (C) physical and mental impairment or condition.
97 (f) "State institution of higher education" means an institution listed in Section
98 53B-3-102 .
99 (g) "Valid prescription" is a prescription, as defined in Section 58-37-2 , that is:
100 (i) prescribed for a controlled substance for use by the employee for whom it is
101 prescribed; and
102 (ii) not altered or forged.
103 (2) In accordance with this section, the commission may reduce or terminate an
104 employee's disability compensation for a disability claim for good cause shown by the
105 employer including if:
106 (a) the employer terminates the employee from the reemployment and the termination
108 (i) reasonable;
109 (ii) for cause; and
110 (iii) as a result, in whole or in part, of:
111 (A) criminal conduct;
112 (B) violent conduct; or
113 (C) a violation of a reasonable, written workplace health, safety, licensure, or
114 nondiscrimination rule that is applied in a manner that is reasonable and nondiscriminatory;
115 (b) the employee is incarcerated in a correctional facility for a period of time that
116 would result in the termination of the employee's reemployment in accordance with a
117 reasonable, written workplace rule that is applied in a manner that is reasonable and
118 nondiscriminatory; or
119 (c) subject to Subsection (6), the employee is terminated from the reemployment:
120 (i) (A) for use of a controlled substance that the employee did not obtain under a valid
122 (B) for intentional abuse of a controlled substance that the employee obtained under a
123 valid prescription, if the employee uses the controlled substance intentionally:
124 (I) in excess of a prescribed therapeutic amount; or
125 (II) in an otherwise abusive manner; or
126 (C) for the use of alcohol that results in intoxication from alcohol with a blood or
127 breath alcohol concentration of .08 grams or greater; and
128 (ii) in accordance with a reasonable, written workplace rule that is applied in a manner
129 that is reasonable and nondiscriminatory.
130 (3) Notwithstanding the other provisions of this section, the employee described in
131 Subsection (2) is eligible for medical benefits to the extent otherwise allowed under this title.
132 (4) (a) An employer or the employer's insurance carrier may file an application for
133 hearing with the Division of Adjudication to request that an employee's disability
134 compensation for a disability claim be reduced or terminated under this section.
135 (b) An action under this Subsection (4) is barred if an application for hearing is not
136 filed within one year from the day on which the employer terminates the employee from
137 reemployment as described in Subsection (2).
138 (c) An employer or the employer's insurance carrier shall notify the employee that the
139 employer or employer's insurance carrier has filed a request for a hearing under this section
140 within three business days of the day on which the filing is made.
141 (5) (a) The commission may reduce or terminate the disability compensation of an
142 employee for a disability claim if after a hearing requested under Subsection (4), the
143 commission determines that the conditions of Subsection (2) are met.
144 (b) The commission shall issue an order as to whether or not an employee's disability
145 compensation is reduced or terminated under this section by no later than 45 days from the day
146 on which an application for a hearing is filed.
147 (c) A reduction or termination of disability compensation under this Subsection (5)
148 takes effect on the day determined by the commission.
149 (d) If the disability compensation is ordered terminated or reduced, the employer or
150 employer's insurance carrier shall treat a resulting overpayment as an offset against the
151 employer's or employer's insurance carrier's future obligations to pay disability compensation to
152 the employee.
153 (6) (a) For purposes of Subsection (2)(c), the commission may consider a chemical test
154 that conforms to scientifically accepted analytical methods and procedures and includes
155 verification or confirmation of any positive test result by gas chromatography, gas
156 chromatography-mass spectroscopy, or other comparably reliable analytical method showing
157 that the employee has:
158 (i) in the employee's system during employment:
159 (A) any amount of a controlled substance or its metabolites if the employee did not
160 obtain the controlled substance under a valid prescription; or
161 (B) a controlled substance the employee obtained under a valid prescription or the
162 metabolites of the controlled substance if the amount in the employee's system is consistent
163 with the employee using the controlled substance intentionally:
164 (I) in excess of prescribed therapeutic amounts; or
165 (II) in an otherwise abusive manner; or
166 (ii) a blood or breath alcohol concentration of .08 grams or greater during employment.
167 (b) A local governmental entity or state institution of higher education shall comply
168 with Title 34, Chapter 41, Local Governmental Entity Drug-Free Workplace Policies, in
169 engaging in a test for a controlled substance that is the basis of a presumption under this
171 (7) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
172 commission may make rules:
173 (a) describing factors to be considered under Subsection (2); and
174 (b) related to the procedures for a request for a hearing under this section.
175 (8) The adjudication of a dispute arising under this section is governed by Part 8,
177 (9) An issue related to an employee's cooperation with regard to a claim for
178 compensation for permanent total disability benefits is governed by Section 34A-2-413 .
179 Section 3. Section 34A-2-413 is amended to read:
180 34A-2-413. Permanent total disability -- Amount of payments -- Rehabilitation.
181 (1) (a) In [
182 accident or occupational disease, the employee shall receive compensation as outlined in this
184 (b) To establish entitlement to permanent total disability compensation, the employee
185 must prove by a preponderance of evidence that:
186 (i) the employee sustained a significant impairment or combination of impairments as a
187 result of the industrial accident or occupational disease that gives rise to the permanent total
188 disability entitlement;
189 (ii) the employee is permanently totally disabled; and
190 (iii) the industrial accident or occupational disease [
191 employee's permanent total disability.
192 (c) To establish that an employee is permanently totally disabled the employee must
193 prove by a preponderance of the evidence that:
194 (i) the employee is not gainfully employed;
195 (ii) the employee has an impairment or combination of impairments that limit the
196 employee's ability to do basic work activities;
197 (iii) the industrial or occupationally caused impairment or combination of impairments
198 prevent the employee from performing the essential functions of the work activities for which
199 the employee has been qualified until the time of the industrial accident or occupational disease
200 that is the basis for the employee's permanent total disability claim; and
201 (iv) the employee cannot perform other work reasonably available, taking into
202 consideration the employee's:
203 (A) age;
204 (B) education;
205 (C) past work experience;
206 (D) medical capacity; and
207 (E) residual functional capacity.
208 (d) Evidence of an employee's entitlement to disability benefits other than those
209 provided under this chapter and Chapter 3, Utah Occupational Disease Act, if relevant:
210 (i) may be presented to the commission;
211 (ii) is not binding; and
212 (iii) creates no presumption of an entitlement under this chapter and Chapter 3, Utah
213 Occupational Disease Act.
214 (e) In determining under Subsections (1)(b) and (c) whether an employee cannot
215 perform other work reasonably available, the following may not be considered:
216 (i) whether the employee is incarcerated in a facility operated by or contracting with a
217 federal, state, county, or municipal government to house a criminal offender in either a secure
218 or nonsecure setting; or
219 (ii) whether the employee is not legally eligible to be employed because of a reason
220 unrelated to the impairment or combination of impairments.
221 (2) For permanent total disability compensation during the initial 312-week
222 entitlement, compensation [
223 time of the injury, limited as follows:
224 (a) compensation per week may not be more than 85% of the state average weekly
225 wage at the time of the injury;
226 (b) (i) subject to Subsection (2)(b)(ii), compensation per week may not be less than the
227 sum of $45 per week[
228 (A) $5 for a dependent spouse[
229 (B) $5 for each dependent child under the age of 18 years, up to a maximum of four
230 dependent minor children[
231 (ii) the amount calculated under Subsection (2)(b)(i) may not exceed:
232 (A) the maximum established in Subsection (2)(a) [
233 (B) the average weekly wage of the employee at the time of the injury; and
234 (c) after the initial 312 weeks, the minimum weekly compensation rate under
235 Subsection (2)(b) [
236 nearest dollar.
237 (3) This Subsection (3) applies to claims resulting from an accident or disease arising
238 out of and in the course of the employee's employment on or before June 30, 1994.
239 (a) The employer or its insurance carrier is liable for the initial 312 weeks of permanent
240 total disability compensation except as outlined in Section 34A-2-703 as in effect on the date
241 of injury.
242 (b) The employer or its insurance carrier may not be required to pay compensation for
243 any combination of disabilities of any kind, as provided in this section and Sections 34A-2-410
244 through 34A-2-412 and Part 5, Industrial Noise, in excess of the amount of compensation
245 payable over the initial 312 weeks at the applicable permanent total disability compensation
246 rate under Subsection (2).
247 (c) [
248 compensation [
250 (i) to the employer or its insurance carrier [
252 (ii) out of the Employers' Reinsurance Fund's liability to the employee.
253 (d) After an employee [
254 employer, its insurance carrier, or the Employers' Reinsurance Fund for any combination of
255 disabilities amounting to 312 weeks of compensation at the applicable permanent total
256 disability compensation rate, the Employers' Reinsurance Fund shall pay all remaining
257 permanent total disability compensation.
258 (e) Employers' Reinsurance Fund payments shall commence immediately after the
259 employer or its insurance carrier [
260 Section 34A-2-703 .
261 (4) This Subsection (4) applies to claims resulting from an accident or disease arising
262 out of and in the course of the employee's employment on or after July 1, 1994.
263 (a) The employer or its insurance carrier is liable for permanent total disability
265 (b) The employer or its insurance carrier may not be required to pay compensation for
266 any combination of disabilities of any kind, as provided in this section and Sections 34A-2-410
267 through 34A-2-412 and Part 5, Industrial Noise, in excess of the amount of compensation
268 payable over the initial 312 weeks at the applicable permanent total disability compensation
269 rate under Subsection (2).
270 (c) [
271 its insurance carrier may recoup the overpayment of compensation described in Subsection (4)
272 by reasonably offsetting the overpayment against future liability paid before or after the initial
273 312 weeks.
274 (5) Notwithstanding the minimum rate established in Subsection (2), [
276 Fund, after an employee [
277 employer's insurance carrier for any combination of disabilities amounting to 312 weeks of
278 compensation at the applicable total disability compensation rate, shall [
279 compensation payable:
280 (a) to the extent allowable by law[
281 (b) by the dollar amount of 50% of the Social Security retirement benefits received by
282 the employee during the same period.
283 (6) (a) A finding by the commission of permanent total disability is not final, unless
284 otherwise agreed to by the parties, until:
285 (i) an administrative law judge reviews a summary of reemployment activities
286 undertaken pursuant to Chapter 8, Utah Injured Worker Reemployment Act;
287 (ii) the employer or its insurance carrier submits to the administrative law judge:
288 (A) a reemployment plan as prepared by a qualified rehabilitation provider reasonably
289 designed to return the employee to gainful employment; or
290 (B) notice that the employer or its insurance carrier will not submit a plan; and
291 (iii) the administrative law judge, after notice to the parties, holds a hearing, unless
292 otherwise stipulated, to:
293 (A) consider evidence regarding rehabilitation; and
294 (B) review any reemployment plan submitted by the employer or its insurance carrier
295 under Subsection (6)(a)(ii).
296 (b) Before commencing the procedure required by Subsection (6)(a), the administrative
297 law judge shall order:
298 (i) the initiation of permanent total disability compensation payments to provide for the
299 employee's subsistence; and
300 (ii) the payment of any undisputed disability or medical benefits due the employee.
301 (c) Notwithstanding Subsection (6)(a), an order for payment of benefits described in
302 Subsection (6)(b) is considered a final order for purposes of Section 34A-2-212 .
303 (d) The employer or its insurance carrier shall be given credit for any disability
304 payments made under Subsection (6)(b) against its ultimate disability compensation liability
305 under this chapter or Chapter 3, Utah Occupational Disease Act.
306 (e) An employer or its insurance carrier may not be ordered to submit a reemployment
307 plan. If the employer or its insurance carrier voluntarily submits a plan, the plan is subject to
308 Subsections (6)(e)(i) through (iii).
309 (i) The plan may include, but not require an employee to pay for:
310 (A) retraining[
311 (B) education[
312 (C) medical and disability compensation benefits[
313 (D) job placement services[
314 (E) incentives calculated to facilitate reemployment [
316 (ii) The plan shall include payment of reasonable disability compensation to provide
317 for the employee's subsistence during the rehabilitation process.
318 (iii) The employer or its insurance carrier shall diligently pursue the reemployment
319 plan. The employer's or insurance carrier's failure to diligently pursue the reemployment plan
321 motion to make a final decision of permanent total disability.
322 (f) If a preponderance of the evidence shows that successful rehabilitation is not
323 possible, the administrative law judge shall order that the employee be paid weekly permanent
324 total disability compensation benefits.
325 (g) If a preponderance of the evidence shows that pursuant to a reemployment plan, as
326 prepared by a qualified rehabilitation provider and presented under Subsection (6)(e), an
327 employee could immediately or without unreasonable delay return to work but for the
328 following, an administrative law judge shall order that the employee be denied the payment of
329 weekly permanent total disability compensation benefits:
330 (i) incarceration in a facility operated by or contracting with a federal, state, county, or
331 municipal government to house a criminal offender in either a secure or nonsecure setting; or
332 (ii) not being legally eligible to be employed because of a reason unrelated to the
333 impairment or combination of impairments.
334 (7) (a) The period of benefits commences on the date the employee became
335 permanently totally disabled, as determined by a final order of the commission based on the
336 facts and evidence, and ends:
337 (i) with the death of the employee; or
338 (ii) when the employee is capable of returning to regular, steady work.
339 (b) An employer or its insurance carrier may provide or locate for a permanently totally
340 disabled employee reasonable, medically appropriate, part-time work in a job earning at least
341 minimum wage [
342 accept the work to the extent that it would disqualify the employee from Social Security
343 disability benefits.
344 (c) An employee shall:
345 (i) fully cooperate in the placement and employment process; and
346 (ii) accept the reasonable, medically appropriate, part-time work.
347 (d) In a consecutive four-week period when an employee's gross income from the work
348 provided under Subsection (7)(b) exceeds $500, the employer or insurance carrier may reduce
349 the employee's permanent total disability compensation by 50% of the employee's income in
350 excess of $500.
351 (e) If a work opportunity is not provided by the employer or its insurance carrier, a
352 permanently totally disabled employee may obtain medically appropriate, part-time work
353 subject to the offset provisions [
354 (f) (i) The commission shall establish rules regarding the part-time work and offset.
355 (ii) The adjudication of disputes arising under this Subsection (7) is governed by Part
356 8, Adjudication.
357 (g) The employer or its insurance carrier [
358 that medically appropriate part-time work is available.
359 (h) The administrative law judge may:
360 (i) excuse an employee from participation in any [
361 (A) that would require the employee to undertake work exceeding the employee's:
362 (I) medical capacity [
363 (II) residual functional capacity; or
364 (B) for good cause; or
365 (ii) allow the employer or its insurance carrier to reduce permanent total disability
366 benefits as provided in Subsection (7)(d) when reasonable, medically appropriate, part-time
368 (8) When an employee [
369 possible but the employee has some loss of bodily function, the award shall be for permanent
370 partial disability.
371 (9) As determined by an administrative law judge, an employee is not entitled to
372 disability compensation, unless the employee fully cooperates with any evaluation or
373 reemployment plan under this chapter or Chapter 3, Utah Occupational Disease Act. The
374 administrative law judge shall dismiss without prejudice the claim for benefits of an employee
375 if the administrative law judge finds that the employee fails to fully cooperate, unless the
376 administrative law judge states specific findings on the record justifying dismissal with
378 (10) (a) The loss or permanent and complete loss of the use of the following constitutes
379 total and permanent disability that is compensated according to this section:
380 (i) both hands[
381 (ii) both arms[
382 (iii) both feet[
383 (iv) both legs[
384 (v) both eyes[
385 (vi) any combination of two [
387 (b) A finding of permanent total disability pursuant to Subsection (10)(a) is final.
388 (11) (a) An insurer or self-insured employer may periodically reexamine a permanent
389 total disability claim, except those based on Subsection (10), for which the insurer or
390 self-insured employer had or has payment responsibility to determine whether the [
391 employee remains permanently totally disabled.
392 (b) Reexamination may be conducted no more than once every three years after an
393 award is final, unless good cause is shown by the employer or its insurance carrier to allow
394 more frequent reexaminations.
395 (c) The reexamination may include:
396 (i) the review of medical records;
397 (ii) employee submission to one or more reasonable medical evaluations;
398 (iii) employee submission to one or more reasonable rehabilitation evaluations and
399 retraining efforts;
400 (iv) employee disclosure of Federal Income Tax Returns;
401 (v) employee certification of compliance with Section 34A-2-110 ; and
402 (vi) employee completion of one or more sworn affidavits or questionnaires approved
403 by the division.
404 (d) The insurer or self-insured employer shall pay for the cost of a reexamination with
405 appropriate employee reimbursement pursuant to rule for reasonable travel allowance and per
406 diem as well as reasonable expert witness fees incurred by the employee in supporting the
407 employee's claim for permanent total disability benefits at the time of reexamination.
408 (e) If an employee fails to fully cooperate in the reasonable reexamination of a
409 permanent total disability finding, an administrative law judge may order the suspension of the
410 employee's permanent total disability benefits until the employee cooperates with the
412 (f) (i) [
413 reveals evidence that reasonably raises the issue of an employee's continued entitlement to
414 permanent total disability compensation benefits, an insurer or self-insured employer may
415 petition the Division of Adjudication for a rehearing on that issue. The [
416 self-insured employer shall [
417 supporting the insurer's or self-insured employer's belief that the employee is no longer
418 permanently totally disabled.
419 (ii) If the petition under Subsection (11)(f)(i) demonstrates good cause, as determined
420 by the Division of Adjudication, an administrative law judge shall adjudicate the issue at a
422 (iii) Evidence of an employee's participation in medically appropriate, part-time work
423 may not be the sole basis for termination of an employee's permanent total disability
424 entitlement, but the evidence of the employee's participation in medically appropriate, part-time
425 work under Subsection (7) may be considered in the reexamination or hearing with other
426 evidence relating to the employee's status and condition.
427 (g) In accordance with Section 34A-1-309 , the administrative law judge may award
428 reasonable [
429 employee's interests with respect to reexamination of the permanent total disability finding,
430 except if the employee does not prevail, the [
431 The [
432 addition to the permanent total disability compensation benefits due.
433 (h) During the period of reexamination or adjudication if the employee fully
434 cooperates, each insurer, self-insured employer, or the Employers' Reinsurance Fund shall
435 continue to pay the permanent total disability compensation benefits due the employee.
436 (12) If any provision of this section, or the application of any provision to any person
437 or circumstance, is held invalid, the remainder of this section [
438 the invalid provision or application.
439 Section 4. Effective date.
440 This bill takes effect on July 1, 2008.
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