1     
PUBLIC EMPLOYEES LONG-TERM DISABILITY ACT

2     
AMENDMENTS

3     
2018 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Jefferson Moss

6     
Senate Sponsor: Daniel Hemmert

7     

8     LONG TITLE
9     General Description:
10          This bill modifies the Public Employees' Long-Term Disability Act by amending
11     provisions relating to long-term disability benefits.
12     Highlighted Provisions:
13          This bill:
14          ▸     provides and amends definitions;
15          ▸     specifies when an employee will be evaluated for ongoing disability benefits;
16          ▸     modifies the amount of certain disability benefits to be paid;
17          ▸     modifies the types of reductions or reimbursements for a disability benefit and
18     specifies when a reduction or reimbursement should be applied;
19          ▸     requires repayment when an overpayment of monthly disability benefits occurs; and
20          ▸     makes technical changes.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          This bill provides a special effective date.
25     Utah Code Sections Affected:
26     AMENDS:
27          49-21-102, as last amended by Laws of Utah 2014, Chapter 15
28          49-21-401, as last amended by Laws of Utah 2015, Chapter 328
29          49-21-402, as last amended by Laws of Utah 2017, Chapter 34
30     

31     Be it enacted by the Legislature of the state of Utah:
32          Section 1. Section 49-21-102 is amended to read:
33          49-21-102. Definitions.
34          As used in this chapter:
35          (1) "Date of disability" means the date on which a period of [continuous] total
36     disability [commences] begins, and may not [commence] begin on or before the last day of
37     [actual work] performing full-duty work in the eligible employee's regular occupation.
38          (2) (a) "Eligible employee" means the following employee whose employer provides
39     coverage under this chapter:
40          (i) (A) any regular full-time employee as defined under Section 49-12-102, 49-13-102,
41     or 49-22-102;
42          (B) any public safety service employee as defined under Section 49-14-102, 49-15-102,
43     or 49-23-102;
44          (C) any firefighter service employee or volunteer firefighter as defined under Section
45     49-23-102 who began firefighter service on or after July 1, 2011;
46          (D) any judge as defined under Section 49-17-102 or 49-18-102; or
47          (E) the governor of the state;
48          (ii) an employee who is exempt from participating in a retirement system under
49     Subsection 49-12-203(4), 49-13-203(4), 49-14-203(1), or 49-15-203(1); and
50          (iii) an employee who is covered by a retirement program offered by a public or private
51     system, organization, or company designated by the State Board of Regents.
52          (b) "Eligible employee" does not include:
53          (i) any employee that is exempt from coverage under Section 49-21-201; or
54          (ii) a retiree.
55          (3) "Elimination period" means the three months at the beginning of each continuous
56     period of total disability for which no benefit will be paid. The elimination period begins on
57     the nearest first day of the month from the date of disability. The elimination period may
58     include a one-time trial return to work period of less than 15 consecutive calendar days.
59          (4) (a) "Gainful employment" means any occupation or employment position in the
60     state that:
61          (i) contemplates continued employment during a fiscal or calendar year; and
62          (ii) would pay an amount equal to or greater than 40 hours per week at the legally
63     required minimum wage, regardless of the number of hours worked.
64          (b) "Gainful employment" does not mean that an occupation or employment position in
65     the state is:
66          (i) available within any geographic boundaries of the state;
67          (ii) offered at a certain level of wages;
68          (iii) available at a particular number of hours per week; or
69          (iv) currently available.
70          [(4)] (5) "Maximum benefit period" means the maximum period of time the monthly
71     disability income benefit will be paid under Section 49-21-403 for any continuous period of
72     total disability.
73          [(5)] (6) "Monthly disability benefit" means the monthly payments and accrual of
74     service credit under Section 49-21-401.
75          [(6)] (7) "Objective medical impairment" means an impairment resulting from an
76     injury or illness which is diagnosed by a physician and which is based on accepted objective
77     medical tests or findings rather than subjective complaints.
78          [(b) (i) "Total disability"] (8) (a) "Ongoing disability" means, after the elimination
79     period and the first 24 months of disability benefits, the complete inability, as determined
80     under Subsection [(11)(b)(ii)] (8)(b), to engage in any gainful [occupation] employment which
81     is reasonable, considering the eligible employee's education, training, and experience.
82          [(ii)] (b) For purposes of Subsection [(11)(b)(i)] (8)(a), inability is determined:
83          [(A)] (i) based solely on physical objective medical impairment; and
84          [(B)] (ii) regardless of the existence or absence of any mental impairment.
85          (9) "Own occupation disability" means the complete inability, due to objective medical
86     impairment, whether physical or mental, to engage in the eligible employee's regular
87     occupation during the elimination period and the first 24 months of disability benefits.
88          [(7)] (10) "Physician" means a licensed physician.
89          [(8)] (11) "Regular monthly salary" means the amount certified by the participating
90     employer as the monthly salary of the eligible employee, unless there is a discrepancy between
91     the certified amount and the amount actually paid, in which case the office shall determine the
92     regular monthly salary.
93          [(9)] (12) "Regular occupation" means either:
94          (a) the primary duties performed by the eligible employee for the 12 months preceding
95     the date of disability[,]; or
96          (b) a permanent assignment of duty to the eligible employee, as long as the eligible
97     employee has actually performed all the required duties of the permanent assignment of duty.
98          [(10)] (13) "Rehabilitative employment" means any occupation or employment for
99     wage or profit, for which the eligible employee is reasonably qualified to perform based on
100     education, training, or experience.
101          [(11) (a)] (14) "Total disability" means:
102          (a) own occupation disability; or
103          (b) ongoing disability.
104          (15) (a) "Workers' compensation indemnity benefits" means benefits provided that are
105     designed to replace wages under Title 34A, Chapter 2, Part 4, Compensation and Benefits,
106     including wage replacement for a temporary disability, temporary partial disability, permanent
107     partial disability, or permanent total disability.
108          (b) "Workers' compensation indemnity benefits" includes a settlement amount
109     following a claim for indemnity benefits.
110          Section 2. Section 49-21-401 is amended to read:
111          49-21-401. Disability benefits -- Application -- Eligibility.
112          (1) An eligible employee shall apply for long-term disability benefits under this chapter
113     by:
114          (a) completing an application form prepared by the office;
115          (b) signing a consent form allowing the office access to the eligible employee's medical
116     records; and
117          (c) providing any documentation or information reasonably requested by the office.
118          (2) (a) If an eligible employee is unable to apply on the employee's own behalf, the
119     application may be made by a person who is:
120          (i) the attorney for an eligible employee; or
121          (ii) appointed as a conservator or guardian of the eligible employee.
122          (b) A person described in Subsection (2)(a), may not make an application for a
123     deceased employee.
124          (3) Upon request by the office, the participating employer of the eligible employee
125     shall provide to the office documentation and information concerning the eligible employee.
126          (4) The office:
127          (a) shall review all relevant information;
128          (b) may request additional information; and
129          (c) shall determine whether or not the eligible employee has a total disability.
130          (5) (a) If the office determines that the eligible employee has a total disability due to
131     accidental bodily injury or physical illness which is not the result of the performance of an
132     employment duty, the eligible employee shall receive a monthly disability benefit equal to:
133          (i) two-thirds of the eligible employee's regular monthly salary, for each month the total
134     disability continues beyond the elimination period, not to exceed the maximum benefit
135     period[.]; minus
136          (ii) any required reductions or reimbursements under Section 49-21-402.
137          (b) For an eligible employee under an own occupation disability, the office shall, at the
138     end of the two-year disability period or when a claim for total disability is made by an eligible
139     employee:
140          (i) review and determine whether the eligible employee qualifies for ongoing disability
141     benefits;
142          (ii) make the determination under Subsection (5)(b)(i) as of the day after the eligible
143     employee's own occupation disability benefits end;
144          (iii) consider only physical objective medical impairment that the office determines as
145     a disabling condition on the date of disability; and
146          (iv) exclude any new intervening causes or new diagnoses during the own occupation
147     disability period.
148          (6) If the office determines that the eligible employee has a total disability due to
149     psychiatric illness, the eligible employee shall receive:
150          (a) a maximum of two years of monthly disability benefits equal to two-thirds of the
151     eligible employee's regular monthly salary for each month the total disability continues beyond
152     the elimination period;
153          (b) a maximum of $10,000 for psychiatric expenses, including rehabilitation expenses
154     preauthorized by the office's consultants, paid during the period of monthly disability benefits;
155     and
156          (c) payment of monthly disability benefits according to contractual provisions for a
157     period not to exceed five years if the eligible employee is institutionalized due to psychiatric
158     illness.
159          [(7) If the office determines that the eligible employee has a total disability due to a
160     physical injury resulting from external force or violence as a result of the performance of an
161     employment duty, the eligible employee shall receive a monthly disability benefit equal to
162     100% of the eligible employee's regular monthly salary, for each month the total disability
163     continues beyond the elimination period, not to exceed the maximum benefit period.]
164          (7) (a) An eligible employee shall receive a monthly disability benefit equal to 100% of
165     the eligible employee's regular monthly salary for each month the total disability continues
166     beyond the elimination period, not to exceed the maximum benefit period, but reduced by any
167     required reductions and reimbursements under Section 49-21-402, if the office determines that
168     the employee meets all of the following:
169          (i) the eligible employee has a total disability due solely to a physical objective medical
170     impairment;
171          (ii) the physical objective medical impairment described in Subsection (7)(a)(i)
172     resulted from external force or violence as a result of the performance of an employment duty;
173     and
174          (iii) the eligible employee received workers' compensation indemnity benefits for the
175     physical objective medical impairment described in Subsection (7)(a)(i).
176          (b) An eligible employee who receives workers' compensation indemnity benefits for a
177     physical objective medical impairment is not guaranteed to receive the 100% monthly
178     disability benefit described in Subsection (7)(a).
179          (8) (a) Successive periods of disability are considered as a continuous period of
180     disability if the period of disability:
181          (i) results from the same or related causes;
182          (ii) is separated by less than six months of continuous full-time work at the individual's
183     usual place of employment; and
184          (iii) commences while the individual is an eligible employee covered by this chapter.
185          (b) The inability to work for a period of less than 15 consecutive calendar days is not
186     considered as a period of disability.
187          (c) If Subsection (8)(a) or (b) does not apply, successive periods of disability are
188     considered as separate periods of disability.
189          (9) The office may, at any time, have any eligible employee claiming to have a
190     disability examined by a physician chosen by the office to determine if the eligible employee
191     has a total disability.
192          (10) A claim brought by an eligible employee for long-term disability benefits under
193     the Public Employee's Long-Term Disability Program is barred if it is not commenced within
194     six months from the eligible employee's date of disability, unless the office determines that
195     under the surrounding facts and circumstances, the eligible employee's failure to comply with
196     the time limitations was reasonable.
197          (11) (a) If the office denies or terminates a claim for long-term disability benefits, the
198     eligible employee shall have the right to appeal the denial or termination:
199          (i) to the [office disability claims review committee] executive director of the office
200     within 60 days of the denial or termination of long-term disability benefits; and
201          (ii) in accordance with Section 49-11-613.
202          (b) An appeal of a denial or termination of long-term disability benefits described in
203     Subsection (11)(a) is barred if it is not commenced within the time limit described in
204     Subsection (11)(a).
205          [(12) (a) If the office disability claims review committee, after reviewing an appeal
206     denying or terminating long-term disability benefits, denies or terminates a claim for long-term
207     disability benefits, the eligible employee may appeal the office disability claims review
208     committee's denial or termination to the executive director of the office in accordance with
209     Section 49-11-613.]
210          [(b) An appeal of a denial or termination of long-term disability benefits described in
211     Subsection (12)(a) is barred if it is not commenced within 60 days of the office disability
212     claims review committee's denial or termination.]
213          [(c) Following an appeal commenced under this Subsection (12), any further appeal
214     proceedings shall be conducted in accordance with the administrative hearing process
215     described in Section 49-11-613.]
216          [(13)] (12) Medical or psychiatric conditions which existed prior to eligibility may not
217     be a basis for disability benefits until the eligible employee has had one year of continuous
218     eligibility in the Public Employees Long-Term Disability Program.
219          [(14)] (13) If there is a valid benefit protection contract, service credit shall accrue
220     during the period of total disability, unless the disabled eligible employee is:
221          (a) exempted from a system;
222          (b) eligible to retire with an unreduced retirement allowance; or
223          (c) otherwise ineligible for service credit.
224          [(15)] (14) Regardless of any medical evidence provided by the employee to support
225     the application for disability, an employee is not eligible for long-term disability benefits
226     during any period in which the employee:
227          (a) makes a claim that the employee is able to work; or
228          (b) has a pending action in a court or before any federal, state, or local administrative
229     body in which the employee has made a claim that the employee is able to work.
230          [(16)] (15) Notwithstanding the provisions of Section 49-11-618, upon written request
231     by an employer, information obtained under this part may, upon an order of a court or an
232     administrative law judge, be released to an employer who is a party in an action under
233     Subsection [(15)] (14).
234          Section 3. Section 49-21-402 is amended to read:
235          49-21-402. Reduction or reimbursement of benefit -- Circumstances --
236     Application for other benefits required.
237          (1) A monthly disability benefit may be terminated unless:
238          (a) the eligible employee is under the ongoing care and treatment of a physician other
239     than the eligible employee; and
240          (b) the eligible employee provides the information and documentation requested by the
241     office.
242          (2) (a) The monthly disability benefit shall be reduced or reimbursed by any amount
243     received by, or payable to, the eligible employee [from the following sources for the same
244     period of time during which the eligible employee is entitled to receive a] for the same injury
245     or illness that is the basis for the monthly disability benefit from the following sources:
246          [(a) Social Security disability benefits, including all benefits received by the eligible
247     employee, the eligible employee's spouse, and the eligible employee's children as determined
248     by the Social Security Administration;]
249          [(b)] (i) workers' compensation indemnity benefits, regardless of whether the amount is
250     received as an ongoing monthly benefit, as a lump sum, or in a settlement with a workers'
251     compensation indemnity carrier;
252          [(c)] (ii) any money received by judgment, legal action, or settlement from a third party
253     liable to the employee for the monthly disability benefit;
254          [(d) unemployment compensation benefits;]
255          [(e)] (iii) automobile no-fault, medical payments, or similar insurance payments;
256          [(f)] (iv) any money received by a judgment, settlement, or other payment as a result of
257     a claim against an employer; or
258          [(g) any payments made for sick leave,] (v) annual leave[,] or similar lump-sum
259     payments[; and].
260          [(h) compensation received for employment, including self-employment, except for
261     eligible amounts from approved rehabilitative employment in accordance with Section
262     49-21-406.]
263          (b) The monthly disability benefit shall be reduced or reimbursed by any amount
264     received by, or payable to, the eligible employee for the same period of time during which the
265     eligible employee is entitled to receive a monthly disability benefit from the following sources:
266          (i) social security disability benefits, including all benefits received by the eligible
267     employee, the eligible employee's spouse, and the eligible employee's children as determined
268     by the Social Security Administration;
269          (ii) unemployment compensation benefits;
270          (iii) sick leave benefits; or
271          (iv) compensation received for employment, including self-employment, except for
272     eligible amounts from approved rehabilitative employment in accordance with Section
273     49-21-406.
274          (3) The monthly disability benefit shall be reduced by any amount in excess of
275     one-third of the eligible employee's regular monthly salary received by, or payable to, the
276     eligible employee from the following sources for the same period of time during which the
277     eligible employee is entitled to receive a monthly disability benefit:
278          (a) any retirement payment earned through or provided by public or private
279     employment; and
280          (b) any disability benefit, other than social security or workers' compensation
281     indemnity benefits, resulting from the disability for which benefits are being received under
282     this chapter.
283          (4) After the date of disability, cost-of-living increases to any of the benefits listed in
284     Subsection (2) or (3) may not be considered in calculating a reduction to the monthly disability
285     benefit.
286          (5) Any amounts payable to the eligible employee from one or more of the sources
287     under Subsection (2) are considered as amounts received whether or not the amounts were
288     actually received by the eligible employee.
289          (6) (a) An eligible employee shall first apply for all disability benefits from
290     governmental entities under Subsection (2) to which the eligible employee is or may be
291     entitled, and provide to the office evidence of the applications.
292          (b) If the eligible employee fails to make application under this Subsection (6), the
293     monthly disability benefit shall be suspended.
294          (7) During a period of total disability, an eligible employee has an affirmative duty to
295     keep the program informed regarding:
296          (a) the award or receipt of an amount from a source that could result in the monthly
297     disability benefit being reduced or reimbursed under this section within 10 days of the award or
298     receipt of the amount; and
299          (b) any employment, including self-employment, of the eligible employee and the
300     compensation for that employment within 10 days of beginning the employment or a material
301     change in the compensation from that employment.
302          (8) The program shall use commercially reasonable means to collect any amounts of
303     overpayments and reimbursements.
304          (9) (a) If the program is unable to reduce or obtain reimbursement for the required
305     amount from the monthly disability benefit for any reason, the employee will have received an
306     overpayment of monthly disability benefits.
307          (b) If an eligible employee receives an overpayment of monthly disability benefits, the
308     eligible employee shall repay to the office the amount of the overpayment, plus interest as
309     determined by the program, within 30 days from the date the overpayment is received by:
310          (i) the eligible employee; or
311          (ii) a third party related to the eligible employee.
312          (c) The executive director may waive the interest on an overpayment of monthly
313     disability benefits under Subsection (9)(b) if good cause is shown for the delay in repayment of
314     the overpayment of monthly disability benefits.
315          Section 4. Effective date.
316          This bill takes effect on July 1, 2018.