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PUBLIC EMPLOYEES LONG-TERM DISABILITY ACT

2     
AMENDMENTS

3     
2018 GENERAL SESSION

4     
STATE OF UTAH

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Chief Sponsor: Jefferson Moss

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Senate Sponsor: Daniel Hemmert

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8     LONG TITLE
9     Committee Note:
10          The Retirement and Independent Entities Interim Committee recommended this bill.
11     General Description:
12          This bill modifies the Public Employees' Long-Term Disability Act by amending
13     provisions relating to long-term disability benefits.
14     Highlighted Provisions:
15          This bill:
16          ▸     provides and amends definitions;
17          ▸     specifies when an employee will be evaluated for ongoing disability benefits;
18          ▸     modifies the amount of certain disability benefits to be paid;
19          ▸     modifies the types of reductions or reimbursements for a disability benefit and
20     specifies when a reduction or reimbursement should be applied;
21          ▸     requires repayment when an overpayment of monthly disability benefits occurs; and
22          ▸     makes technical changes.
23     Money Appropriated in this Bill:
24          None
25     Other Special Clauses:
26          This bill provides a special effective date.
27     Utah Code Sections Affected:
28     AMENDS:
29          49-21-102, as last amended by Laws of Utah 2014, Chapter 15
30          49-21-401, as last amended by Laws of Utah 2015, Chapter 328
31          49-21-402, as last amended by Laws of Utah 2017, Chapter 34
32     

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




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