Representative Brian S. King proposes the following substitute bill:


1     
DISABILITY BENEFIT AMENDMENTS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Brian S. King

5     
Senate Sponsor: Todd D. Weiler

6     

7     LONG TITLE
8     General Description:
9          This bill amends the Public Employees' Long-Term Disability Act.
10     Highlighted Provisions:
11          This bill:
12          ▸     allows an eligible employee to receive certain disability benefits for an objective
13     medical impairment during a three-year pilot period regardless of whether the
14     impairment is physical or mental;
15          ▸     creates certain review and compliance requirements for an individual receiving a
16     disability benefit; and
17          ▸     makes technical and corresponding changes.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          None
22     Utah Code Sections Affected:
23     AMENDS:
24          49-21-102, as last amended by Laws of Utah 2020, Chapter 365
25          49-21-401, as last amended by Laws of Utah 2018, Chapter 185
26          49-21-402, as last amended by Laws of Utah 2019, Chapter 349
27          49-21-406, as last amended by Laws of Utah 2019, Chapter 349
28     

29     Be it enacted by the Legislature of the state of Utah:
30          Section 1. Section 49-21-102 is amended to read:
31          49-21-102. Definitions.
32          As used in this chapter:
33          (1) "Date of disability" means the date on which a period of total disability begins, and
34     may not begin on or before the last day of performing full-duty work in the eligible employee's
35     regular occupation.
36          (2) (a) "Eligible employee" means the following employee whose employer provides
37     coverage under this chapter:
38          (i) (A) any regular full-time employee as defined under Section 49-12-102, 49-13-102,
39     or 49-22-102;
40          (B) any public safety service employee as defined under Section 49-14-102, 49-15-102,
41     or 49-23-102;
42          (C) any firefighter service employee or volunteer firefighter as defined under Section
43     49-23-102 who began firefighter service on or after July 1, 2011;
44          (D) any judge as defined under Section 49-17-102 or 49-18-102; or
45          (E) the governor of the state;
46          (ii) an employee who is exempt from participating in a retirement system under
47     Subsection 49-12-203(4), 49-13-203(4), 49-14-203(1), or 49-15-203(1); and
48          (iii) an employee who is covered by a retirement program offered by a public or private
49     system, organization, or company designated by the Utah Board of Higher Education.
50          (b) "Eligible employee" does not include:
51          (i) any employee that is exempt from coverage under Section 49-21-201; or
52          (ii) a retiree.
53          (3) "Elimination period" means the three months at the beginning of each continuous
54     period of total disability for which no benefit will be paid. The elimination period begins on
55     the nearest first day of the month from the date of disability. The elimination period may
56     include a one-time trial return to work period of less than 15 consecutive calendar days.
57          (4) (a) "Gainful employment" means any occupation or employment position in the
58     state that:
59          (i) contemplates continued employment during a fiscal or calendar year; and
60          (ii) would pay an amount equal to or greater than 40 hours per week at the legally
61     required minimum wage, regardless of the number of hours worked.
62          (b) "Gainful employment" does not mean that an occupation or employment position in
63     the state is:
64          (i) available within any geographic boundaries of the state;
65          (ii) offered at a certain level of wages;
66          (iii) available at a particular number of hours per week; or
67          (iv) currently available.
68          (5) "Maximum benefit period" means the maximum period of time the monthly
69     disability income benefit will be paid under Section 49-21-403 for any continuous period of
70     total disability.
71          (6) "Monthly disability benefit" means the monthly payments and accrual of service
72     credit under Section 49-21-401.
73          (7) "Objective medical impairment" means an impairment resulting from an injury or
74     illness which is diagnosed by a physician and which is based on accepted objective medical
75     tests or findings rather than subjective complaints.
76          (8) (a) "Ongoing disability" means, after the elimination period and the first 24 months
77     of disability benefits, the complete inability due to objective medical impairment, as
78     determined under Subsection (8)(b), to engage in any gainful employment which is reasonable,
79     considering the eligible employee's education, training, and experience.
80          (b) For purposes of Subsection (8)(a), inability is determined:
81          (i) before and after the pilot period:
82          [(i)] (A) based solely on physical objective medical impairment; and
83          [(ii)] (B) regardless of the existence or absence of any mental impairment[.]; and
84          (ii) during the pilot period, due to objective medical impairment, whether physical or
85     mental.
86          (9) "Own occupation disability" means the complete inability, due to objective medical
87     impairment, whether physical or mental, to engage in the eligible employee's regular
88     occupation during the elimination period and the first 24 months of disability benefits.
89          (10) "Physician" means a licensed physician.
90          (11) "Pilot period" means the period beginning May 4, 2022, and ending on May 3,
91     2025.
92          [(11)] (12) "Regular monthly salary" means the amount certified by the participating
93     employer as the monthly salary of the eligible employee, unless there is a discrepancy between
94     the certified amount and the amount actually paid, in which case the office shall determine the
95     regular monthly salary.
96          [(12)] (13) "Regular occupation" means either:
97          (a) the primary duties performed by the eligible employee for the 12 months preceding
98     the date of disability; or
99          (b) a permanent assignment of duty to the eligible employee, as long as the eligible
100     employee has actually performed all the required duties of the permanent assignment of duty.
101          [(13)] (14) "Rehabilitative employment" means any occupation or employment for
102     wage or profit, for which the eligible employee is reasonably qualified to perform based on
103     education, training, or experience.
104          [(14)] (15) "Total disability" means:
105          (a) own occupation disability; or
106          (b) ongoing disability.
107          [(15)] (16) (a) "Workers' compensation indemnity benefits" means benefits provided
108     that are designed to replace wages under Title 34A, Chapter 2, Part 4, Compensation and
109     Benefits, including wage replacement for a temporary disability, temporary partial disability,
110     permanent partial disability, or permanent total disability.
111          (b) "Workers' compensation indemnity benefits" includes a settlement amount
112     following a claim for indemnity benefits.
113          Section 2. Section 49-21-401 is amended to read:
114          49-21-401. Disability benefits -- Application -- Eligibility.
115          (1) An eligible employee shall apply for long-term disability benefits under this chapter
116     by:
117          (a) completing an application form prepared by the office;
118          (b) signing a consent form allowing the office access to the eligible employee's medical
119     records; and
120          (c) providing any documentation or information reasonably requested by the office.
121          (2) (a) If an eligible employee is unable to apply on the employee's own behalf, the
122     application may be made by a person who is:
123          (i) the attorney for an eligible employee; or
124          (ii) appointed as a conservator or guardian of the eligible employee.
125          (b) A person described in Subsection (2)(a), may not make an application for a
126     deceased employee.
127          (3) Upon request by the office, the participating employer of the eligible employee
128     shall provide to the office documentation and information concerning the eligible employee.
129          (4) The office:
130          (a) shall review all relevant information;
131          (b) may request additional information; and
132          (c) shall determine whether or not the eligible employee has a total disability.
133          (5) (a) If the office determines that the eligible employee has a total disability due to
134     accidental bodily injury or [physical] illness which is not the result of the performance of an
135     employment duty, the eligible employee shall receive a monthly disability benefit equal to:
136          (i) two-thirds of the eligible employee's regular monthly salary, for each month the total
137     disability continues beyond the elimination period, not to exceed the maximum benefit period;
138     minus
139          (ii) any required reductions or reimbursements under Section 49-21-402.
140          (b) For an eligible employee under an own occupation disability, the office shall, at the
141     end of the two-year disability period or when a claim for total disability is made by an eligible
142     employee:
143          (i) review and determine whether the eligible employee qualifies for ongoing disability
144     benefits;
145          (ii) make the determination under Subsection (5)(b)(i) as of the day after the eligible
146     employee's own occupation disability benefits end;
147          (iii) consider only [physical] objective medical impairment that the office determines
148     as a disabling condition on the date of disability; and
149          (iv) exclude any new intervening causes or new diagnoses during the own occupation
150     disability period.
151          [(6) If the office determines that the eligible employee has a total disability due to
152     psychiatric illness, the eligible employee shall receive:]
153          [(a) a maximum of two years of monthly disability benefits equal to two-thirds of the
154     eligible employee's regular monthly salary for each month the total disability continues beyond
155     the elimination period;]
156          [(b) a maximum of $10,000 for psychiatric expenses, including rehabilitation expenses
157     preauthorized by the office's consultants, paid during the period of monthly disability benefits;
158     and]
159          [(c) payment of monthly disability benefits according to contractual provisions for a
160     period not to exceed five years if the eligible employee is institutionalized due to psychiatric
161     illness.]
162          [(7)] (6) (a) An eligible employee shall receive a monthly disability benefit equal to
163     100% of the eligible employee's regular monthly salary for each month the total disability
164     continues beyond the elimination period, not to exceed the maximum benefit period, but
165     reduced by any required reductions and reimbursements under Section 49-21-402, if the office
166     determines that the employee meets all of the following:
167          (i) the eligible employee has a total disability due [solely to a physical] to an objective
168     medical impairment, whether physical or, during the pilot period, mental;
169          (ii) the [physical] objective medical impairment described in Subsection [(7)] (6)(a)(i)
170     resulted from physical, external force or violence [as a result of] to the body of the eligibly
171     employee in the performance of an employment duty; and
172          (iii) the eligible employee received workers' compensation indemnity benefits for the
173     [physical] objective medical impairment described in Subsection [(7)] (6)(a)(i).
174          (b) An eligible employee who receives workers' compensation indemnity benefits for
175     [a physical] an objective medical impairment is not guaranteed to receive the 100% monthly
176     disability benefit described in Subsection [(7)] (6)(a).
177          [(8)] (7) (a) Successive periods of disability are considered as a continuous period of
178     disability if the period of disability:
179          (i) results from the same or related causes;
180          (ii) is separated by less than six months of continuous full-time work at the individual's
181     usual place of employment; and
182          (iii) commences while the individual is an eligible employee covered by this chapter.
183          (b) The inability to work for a period of less than 15 consecutive calendar days is not
184     considered as a period of disability.
185          (c) If Subsection [(8)] (7)(a) or (b) does not apply, successive periods of disability are
186     considered as separate periods of disability.
187          [(9)] (8) The office may, at any time, have any eligible employee claiming to have a
188     disability examined by a physician chosen by the office to determine if the eligible employee
189     has a total disability.
190          [(10)] (9) A claim brought by an eligible employee for long-term disability benefits
191     under the Public Employee's Long-Term Disability Program is barred if it is not commenced
192     within six months from the eligible employee's date of disability, unless the office determines
193     that under the surrounding facts and circumstances, the eligible employee's failure to comply
194     with the time limitations was reasonable.
195          [(11)] (10) (a) If the office denies or terminates a claim for long-term disability
196     benefits, the eligible employee shall have the right to appeal the denial or termination:
197          (i) to the executive director of the office within 60 days of the denial or termination of
198     long-term disability benefits; and
199          (ii) in accordance with Section 49-11-613.
200          (b) An appeal of a denial or termination of long-term disability benefits described in
201     Subsection [(11)] (10)(a) is barred if it is not commenced within the time limit described in
202     Subsection [(11)] (10)(a).
203          [(12)] (11) Medical or psychiatric conditions which existed prior to eligibility may not
204     be a basis for disability benefits until the eligible employee has had one year of continuous
205     eligibility in the Public Employees Long-Term Disability Program.
206          [(13)] (12) If there is a valid benefit protection contract, service credit shall accrue
207     during the period of total disability, unless the disabled eligible employee is:
208          (a) exempted from a system;
209          (b) eligible to retire with an unreduced retirement allowance; or
210          (c) otherwise ineligible for service credit.
211          [(14)] (13) Regardless of any medical evidence provided by the employee to support
212     the application for disability, an employee is not eligible for long-term disability benefits
213     during any period in which the employee:
214          (a) makes a claim that the employee is able to work; or
215          (b) has a pending action in a court or before any federal, state, or local administrative
216     body in which the employee has made a claim that the employee is able to work.
217          [(15)] (14) Notwithstanding the provisions of Section 49-11-618, upon written request
218     by an employer, information obtained under this part may, upon an order of a court or an
219     administrative law judge, be released to an employer who is a party in an action under
220     Subsection [(14)] (13).
221          Section 3. Section 49-21-402 is amended to read:
222          49-21-402. Reduction or reimbursement of benefit -- Circumstances --
223     Application for other benefits required.
224          (1) A monthly disability benefit may be terminated, suspended, or reduced unless:
225          (a) the eligible employee [is under the] participates in ongoing care and treatment [of a
226     physician or physician assistant other than the eligible employee; and] in accordance with
227     Subsection 49-21-406(3) or (4); or
228          (b) the eligible employee provides the information and documentation requested by the
229     office.
230          (2) (a) The monthly disability benefit shall be reduced or reimbursed by any amount
231     received by, or payable to, the eligible employee for the same injury or illness that is the basis
232     for the monthly disability benefit from the following sources:
233          (i) workers' compensation indemnity benefits, regardless of whether the amount is
234     received as an ongoing monthly benefit, as a lump sum, or in a settlement with a workers'
235     compensation indemnity carrier;
236          (ii) any money received by judgment, legal action, or settlement from a third party
237     liable to the employee for the monthly disability benefit;
238          (iii) automobile no-fault, medical payments, or similar insurance payments;
239          (iv) any money received by a judgment, settlement, or other payment as a result of a
240     claim against an employer; or
241          (v) annual leave or similar lump-sum payments.
242          (b) The monthly disability benefit shall be reduced or reimbursed by any amount
243     received by, or payable to, the eligible employee for the same period of time during which the
244     eligible employee is entitled to receive a monthly disability benefit from the following sources:
245          (i) social security disability benefits, including all benefits received by the eligible
246     employee, the eligible employee's spouse, and the eligible employee's children as determined
247     by the Social Security Administration;
248          (ii) unemployment compensation benefits;
249          (iii) sick leave benefits; or
250          (iv) compensation received for employment, including self-employment, except for
251     eligible amounts from approved rehabilitative employment in accordance with Section
252     49-21-406.
253          (3) The monthly disability benefit shall be reduced by any amount in excess of
254     one-third of the eligible employee's regular monthly salary received by, or payable to, the
255     eligible employee from the following sources for the same period of time during which the
256     eligible employee is entitled to receive a monthly disability benefit:
257          (a) any retirement payment earned through or provided by public or private
258     employment; and
259          (b) any disability benefit, other than social security or workers' compensation
260     indemnity benefits, resulting from the disability for which benefits are being received under
261     this chapter.
262          (4) After the date of disability, cost-of-living increases to any of the benefits listed in
263     Subsection (2) or (3) may not be considered in calculating a reduction to the monthly disability
264     benefit.
265          (5) Any amounts payable to the eligible employee from one or more of the sources
266     under Subsection (2) are considered as amounts received whether or not the amounts were
267     actually received by the eligible employee.
268          (6) (a) An eligible employee shall first apply for all disability benefits from
269     governmental entities under Subsection (2) to which the eligible employee is or may be
270     entitled, and provide to the office evidence of the applications.
271          (b) If the eligible employee fails to make application under this Subsection (6), the
272     monthly disability benefit shall be suspended.
273          (7) During a period of total disability, an eligible employee has an affirmative duty to
274     keep the program informed regarding:
275          (a) the award or receipt of an amount from a source that could result in the monthly
276     disability benefit being reduced or reimbursed under this section within 10 days of the award or
277     receipt of the amount; and
278          (b) any employment, including self-employment, of the eligible employee and the
279     compensation for that employment within 10 days of beginning the employment or a material
280     change in the compensation from that employment.
281          (8) The program shall use commercially reasonable means to collect any amounts of
282     overpayments and reimbursements.
283          (9) (a) If the program is unable to reduce or obtain reimbursement for the required
284     amount from the monthly disability benefit for any reason, the employee will have received an
285     overpayment of monthly disability benefits.
286          (b) If an eligible employee receives an overpayment of monthly disability benefits, the
287     eligible employee shall repay to the office the amount of the overpayment, plus interest as
288     determined by the program, within 30 days from the date the overpayment is received by:
289          (i) the eligible employee; or
290          (ii) a third party related to the eligible employee.
291          (c) The executive director may waive the interest on an overpayment of monthly
292     disability benefits under Subsection (9)(b) if good cause is shown for the delay in repayment of
293     the overpayment of monthly disability benefits.
294          Section 4. Section 49-21-406 is amended to read:
295          49-21-406. Rehabilitative employment -- Interview by disability specialist --
296     Maintaining eligibility -- Additional treatment and care.
297          (1) (a) If an eligible employee, during a period of total disability for which the monthly
298     disability benefit is payable, engages in approved rehabilitative employment, the monthly
299     disability benefit otherwise payable shall be reduced:
300          (i) by an amount equal to 50% of the income to which the eligible employee is entitled
301     for the employment during the month; and
302          (ii) so that the combined amount received from the rehabilitative employment and the
303     monthly disability payment does not exceed 100% of the eligible employee's monthly salary
304     prior to the employee's disability.
305          (b) This rehabilitative benefit is payable for up to two years or to the end of the
306     maximum benefit period, whichever occurs first.
307          (2) (a) The office shall review an eligible employee's total disability at least one time
308     each year.
309          [(2) (a)] (b) Each eligible employee receiving a monthly disability benefit shall be
310     interviewed by the office.
311          [(b)] (c) The office may refer the eligible employee to a rehabilitative or vocational
312     specialist for a review of the eligible employee's condition and a written rehabilitation plan and
313     return to work assistance.
314          (3) If an eligible employee receiving a monthly disability benefit fails to participate in
315     an office-approved rehabilitation program within the limitations set forth by a physician or
316     physician assistant, the monthly disability benefit may be reduced, suspended, or terminated.
317          (4) The office may, as a condition of paying a monthly disability benefit, require that
318     the eligible employee receive medical care and treatment if that treatment is reasonable or usual
319     according to current medical practices.