This document includes House Floor Amendments incorporated into the bill on Tue, Feb 14, 2023 at 11:28 AM by pflowers.
1     
PUBLIC EMPLOYEE DISABILITY BENEFITS

2     
AMENDMENTS

3     
2023 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Brian S. King

6     
Senate Sponsor: Curtis S. Bramble

7     

8     LONG TITLE
9     General Description:
10          This bill amends the Public Employees' Long-Term Disability Act.
11     Highlighted Provisions:
12          This bill:
13          ▸     establishes a three-year pilot period during which an eligible employee with a
14     mental objective medical impairment qualifies for the same disability benefit as the
15     eligible employee would receive for a physical objective medical impairment;
16          ▸     creates review and compliance requirements for an individual receiving a disability
17     benefit; and
18          ▸     makes technical and corresponding changes.
19     Money Appropriated in this Bill:
20          None
21     Other Special Clauses:
22          This bill provides a special effective date.
23     Utah Code Sections Affected:
24     AMENDS:
25          49-21-102, as last amended by Laws of Utah 2020, Chapter 365
26          49-21-401, as last amended by Laws of Utah 2018, Chapter 185
27          49-21-402, as last amended by Laws of Utah 2019, Chapter 349
28          49-21-406, as last amended by Laws of Utah 2019, Chapter 349
29     

30     Be it enacted by the Legislature of the state of Utah:
31          Section 1. Section 49-21-102 is amended to read:
32          49-21-102. Definitions.
33          As used in this chapter:
34          (1) "Date of disability" means the date on which a period of total disability begins, and
35     may not begin on or before the last day of performing full-duty work in the eligible employee's
36     regular occupation.
37          (2) (a) "Eligible employee" means any of the following [employee] employees whose
38     employer provides coverage under this chapter:
39          (i) (A) any regular full-time employee as defined under Section 49-12-102, 49-13-102,
40     or 49-22-102;
41          (B) any public safety service employee as defined under Section 49-14-102, 49-15-102,
42     or 49-23-102;
43          (C) any firefighter service employee or volunteer firefighter as defined under Section
44     49-23-102 who began firefighter service on or after July 1, 2011;
45          (D) any judge as defined under Section 49-17-102 or 49-18-102; or
46          (E) the governor of the state;
47          (ii) an employee who is exempt from participating in a retirement system under
48     Subsection 49-12-203(4), 49-13-203(4), 49-14-203(1), or 49-15-203(1); and
49          (iii) an employee who is covered by a retirement program offered by a public or private
50     system, organization, or company designated by the Utah Board of Higher Education.
51          (b) "Eligible employee" does not include:
52          (i) any employee that is exempt from coverage under Section 49-21-201; or
53          (ii) a retiree.
54          (3) "Elimination period" means the three months at the beginning of each continuous
55     period of total disability for which no benefit will be paid. The elimination period begins on
56     the nearest first day of the month from the date of disability. The elimination period may
57     include a one-time trial return to work period of less than 15 consecutive calendar days.
58          (4) (a) "Gainful employment" means any occupation or employment position in the
59     state that:
60          (i) contemplates continued employment during a fiscal or calendar year; and
61          (ii) would pay an amount equal to or greater than 40 hours per week at the legally
62     required minimum wage, regardless of the number of hours worked.
63          (b) "Gainful employment" does not mean that an occupation or employment position in
64     the state is:
65          (i) available within any geographic boundaries of the state;
66          (ii) offered at a certain level of wages;
67          (iii) available at a particular number of hours per week; or
68          (iv) currently available.
69          (5) "Maximum benefit period" means the maximum period of time the monthly
70     disability income benefit will be paid under Section 49-21-403 for any continuous period of
71     total disability.
72          (6) "Monthly disability benefit" means the monthly payments and accrual of service
73     credit under Section 49-21-401.
74          (7) "Objective medical impairment" means an impairment resulting from an injury or
75     illness [which] that is diagnosed by a physician and [which] that is based on accepted objective
76     medical tests or findings rather than subjective complaints.
77          (8) [(a)] "Ongoing disability" means, after the elimination period and the first 24
78     months of disability benefits, the complete inability due to objective medical impairment, as
79     determined under [Subsection (8)(b)] Subsection 49-21-401(9), to engage in any gainful
80     employment which is reasonable, considering the eligible employee's education, training, and
81     experience.
82          [(b) For purposes of Subsection (8)(a), inability is determined:]
83          [(i) based solely on physical objective medical impairment; and]
84          [(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          (10) "Physician" means a licensed physician.
89          (11) "Pilot period" means the period beginning on July 1, 2023, and ending on June 30,
90     2026.
91          [(11)] (12) "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          [(12)] (13) "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          [(13)] (14) "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          [(14)] (15) "Total disability" means:
104          (a) own occupation disability; or
105          (b) ongoing disability.
106          [(15)] (16) (a) "Workers' compensation indemnity benefits" means benefits provided
107     that are designed to replace wages under Title 34A, Chapter 2, Part 4, Compensation and
108     Benefits, including wage replacement for a temporary disability, temporary partial disability,
109     permanent 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] that is not the result of the performance of
134     an 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
136     total 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
147     as 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)] (6) (a) An 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, but
164     reduced by any required reductions and reimbursements under Section 49-21-402, if the office
165     determines that the employee meets all of the following:
166          (i) the eligible employee has a total disability:
167          (A) during the pilot period, due [solely] to a physical objective medical impairment or
168     a mental objective medical impairment; or
169          (B) except as provided in Subsection (6)(b), after the pilot period, due to a physical
170     objective medical impairment;
171          (ii) the [physical] objective medical impairment described in Subsection [(7)(a)(i)]
172     (6)(a)(i) resulted from physical, external force or violence [as a result of] to the body of the
173     eligible employee in the performance of an employment duty; and
174          (iii) the eligible employee received workers' compensation indemnity benefits for the
175     [physical] objective medical impairment described in Subsection [(7)(a)(i)] (6)(a)(i).
176          (b) If an eligible employee qualifies for a total disability during the pilot period, the
177     office shall determine whether the employee has a total disability after the pilot period due to a
178     physical objective medical impairment or a mental objective medical impairment.
179          (c) An eligible employee who receives workers' compensation indemnity benefits for [a
180     physical] an objective medical impairment is not guaranteed to receive the 100% monthly
181     disability benefit described in Subsection [(7)(a)] (6)(a).
182          [(8)] (7) (a) Successive periods of disability are considered as a continuous period of
183     disability if the period of disability:
184          (i) results from the same or related causes;
185          (ii) is separated by less than six months of continuous full-time work at the individual's
186     usual place of employment; and
187          (iii) commences while the individual is an eligible employee covered by this chapter.
188          (b) The inability to work for a period of less than 15 consecutive calendar days is not
189     considered as a period of disability.
190          (c) If Subsection [(8)(a)] (7)(a) or (b) does not apply, successive periods of disability
191     are considered as separate periods of disability.
192          [(9)] (8) The office may, at any time, have any eligible employee claiming to have a
193     disability examined by a physician chosen by the office to determine if the eligible employee
194     has a total disability.
195          (9) (a) For purposes of determining whether an eligible employee has an ongoing
196     disability, inability is determined:
197          (i) during the pilot period, due to physical objective medical impairment or mental
198     objective medical impairment; or
199          (ii) except as provided in Subsection (9)(b), after the pilot period, due to a physical
200     objective medical impairment.
201          (b) If an eligible employee has a total disability during the pilot period, the office shall
202     determine whether the employee has an ongoing disability after the pilot period due to a
203     physical objective medical impairment or a mental objective medical impairment.
204          (10) A claim brought by an eligible employee for long-term disability benefits under
205     the Public Employee's Long-Term Disability Program is barred if it is not commenced within
206     six months from the eligible employee's date of disability, unless the office determines that
207     under the surrounding facts and circumstances, the eligible employee's failure to comply with
208     the time limitations was reasonable.
209          (11) (a) If the office denies or terminates a claim for long-term disability benefits, the
210     eligible employee shall have the right to appeal the denial or termination:
211          (i) to the executive director of the office within 60 days [of] after the day of the denial
212     or termination of long-term disability benefits; and
213          (ii) in accordance with Section 49-11-613.
214          (b) An appeal of a denial or termination of long-term disability benefits described in
215     Subsection (11)(a) is barred if it is not commenced within the time limit described in
216     Subsection (11)(a).
217          (12) Medical or psychiatric conditions [which existed prior to] that existed before
218     eligibility may not be a basis for disability benefits until the eligible employee has had one year
219     of continuous eligibility in the Public Employees Long-Term Disability Program.
220          (13) If there is a valid benefit protection contract, service credit shall accrue during the
221     period of total disability, unless the disabled eligible employee is:
222          (a) exempted from a system;
223          (b) eligible to retire with an unreduced retirement allowance; or
224          (c) otherwise ineligible for service credit.
225          (14) Regardless of any medical evidence provided by the employee to support the
226     application for disability, an employee is not eligible for long-term disability benefits during
227     any period in which the employee:
228          (a) makes a claim that the employee is able to work; or
229          (b) has a pending action in a court or before any federal, state, or local administrative
230     body in which the employee has made a claim that the employee is able to work.
231          (15) Notwithstanding the provisions of Section 49-11-618, upon written request by an
232     employer, information obtained under this part may, upon an order of a court or an
233     administrative law judge, be released to an employer who is a party in an action under
234     Subsection (14).
235          (16) On or after May 1, 2025, but on or before November 1, 2025, the office shall
236     provide a written electronic report to the Retirement and Independent Entities Committee
237     regarding the costs and benefits of the changes to the disability benefits during the pilot period.
238          Section 3. Section 49-21-402 is amended to read:
239          49-21-402. Reduction or reimbursement of benefit -- Circumstances --
240     Application for other benefits required.
241          (1) A monthly disability benefit may be Ĥ→ reduced, suspended, or ←Ĥ terminated Ĥ→
241a     [, suspended, or reduced] ←Ĥ unless:
242          (a) the eligible employee [is under the] participates in ongoing care and treatment [of a
243     physician or physician assistant other than the eligible employee; and] in accordance with
244     Subsection 49-21-406(3) or (4); and
245          (b) the eligible employee provides the information and documentation requested by the
246     office.
247          (2) (a) The monthly disability benefit shall be reduced or reimbursed by any amount
248     received by, or payable to, the eligible employee for the same injury or illness that is the basis
249     for the monthly disability benefit from the following sources:
250          (i) workers' compensation indemnity benefits, regardless of whether the amount is
251     received as an ongoing monthly benefit, as a lump sum, or in a settlement with a workers'
252     compensation indemnity carrier;
253          (ii) any money received by judgment, legal action, or settlement from a third party
254     liable to the employee for the monthly disability benefit;
255          (iii) automobile no-fault, medical payments, or similar insurance payments;
256          (iv) any money received by a judgment, settlement, or other payment as a result of a
257     claim against an employer; or
258          (v) annual leave or similar lump-sum payments.
259          (b) The monthly disability benefit shall be reduced or reimbursed by any amount
260     received by, or payable to, the eligible employee for the same period of time during which the
261     eligible employee is entitled to receive a monthly disability benefit from the following sources:
262          (i) social security disability benefits, including all benefits received by the eligible
263     employee, the eligible employee's spouse, and the eligible employee's children as determined
264     by the Social Security Administration;
265          (ii) unemployment compensation benefits;
266          (iii) sick leave benefits; or
267          (iv) compensation received for employment, including self-employment, except for
268     eligible amounts from approved rehabilitative employment in accordance with Section
269     49-21-406.
270          (3) The monthly disability benefit shall be reduced by any amount in excess of
271     one-third of the eligible employee's regular monthly salary received by, or payable to, the
272     eligible employee from the following sources for the same period of time during which the
273     eligible employee is entitled to receive a monthly disability benefit:
274          (a) any retirement payment earned through or provided by public or private
275     employment; and
276          (b) any disability benefit, other than social security or workers' compensation
277     indemnity benefits, resulting from the disability for which benefits are being received under
278     this chapter.
279          (4) After the date of disability, cost-of-living increases to any of the benefits listed in
280     Subsection (2) or (3) may not be considered in calculating a reduction to the monthly disability
281     benefit.
282          (5) Any amounts payable to the eligible employee from one or more of the sources
283     under Subsection (2) are considered as amounts received whether or not the amounts were
284     actually received by the eligible employee.
285          (6) (a) An eligible employee shall first apply for all disability benefits from
286     governmental entities under Subsection (2) to which the eligible employee is or may be
287     entitled, and provide to the office evidence of the applications.
288          (b) If the eligible employee fails to make application under this Subsection (6), the
289     monthly disability benefit shall be suspended.
290          (7) During a period of total disability, an eligible employee has an affirmative duty to
291     keep the program informed regarding:
292          (a) the award or receipt of an amount from a source that could result in the monthly
293     disability benefit being reduced or reimbursed under this section within 10 days [of] after the
294     day of the award or receipt of the amount; and
295          (b) any employment, including self-employment, of the eligible employee and the
296     compensation for that employment within 10 days [of] after the beginning the employment or a
297     material change in the compensation from that employment.
298          (8) The program shall use commercially reasonable means to collect any amounts of
299     overpayments and reimbursements.
300          (9) (a) If the program is unable to reduce or obtain reimbursement for the required
301     amount from the monthly disability benefit for any reason, the employee will have received an
302     overpayment of monthly disability benefits.
303          (b) If an eligible employee receives an overpayment of monthly disability benefits, the
304     eligible employee shall repay to the office the amount of the overpayment, plus interest as
305     determined by the program, within 30 days from the date the overpayment is received by:
306          (i) the eligible employee; or
307          (ii) a third party related to the eligible employee.
308          (c) The executive director may waive the interest on an overpayment of monthly
309     disability benefits under Subsection (9)(b) if good cause is shown for the delay in repayment of
310     the overpayment of monthly disability benefits.
311          Section 4. Section 49-21-406 is amended to read:
312          49-21-406. Rehabilitative employment -- Interview by disability specialist --
313     Maintaining eligibility -- Additional treatment and care.
314          (1) (a) If an eligible employee, during a period of total disability for which the monthly
315     disability benefit is payable, engages in approved rehabilitative employment, the monthly
316     disability benefit otherwise payable shall be reduced:
317          (i) by an amount equal to 50% of the income to which the eligible employee is entitled
318     for the employment during the month; and
319          (ii) so that the combined amount received from the rehabilitative employment and the
320     monthly disability payment does not exceed 100% of the eligible employee's monthly salary
321     prior to the employee's disability.
322          (b) This rehabilitative benefit is payable for up to two years or to the end of the
323     maximum benefit period, whichever occurs first.
324          (2) (a) The office shall review an eligible employee's total disability at least one time
325     each year.
326          [(a) Each ] (b) The office shall interview each eligible employee receiving a monthly
327     disability benefit [shall be interviewed by the office].
328          [(b)] (c) The office may refer the eligible employee to a rehabilitative or vocational
329     specialist for a review of the eligible employee's condition and a written rehabilitation plan and
330     return to work assistance.
331          (3) If an eligible employee receiving a monthly disability benefit fails to participate in
332     an office-approved rehabilitation program within the limitations set forth by a physician or
333     physician assistant, the monthly disability benefit may be reduced, suspended, or terminated.
334          (4) The office may, as a condition of paying a monthly disability benefit, require that
335     the eligible employee receive medical care and treatment if that treatment is reasonable or usual
336     according to current medical practices.
337          Section 5. Effective date.
338          This bill takes effect on July 1, 2023.