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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


Office of Legislative Research and General Counsel


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