SENATE BILL 761
48th legislature - STATE OF NEW MEXICO - first session, 2007
INTRODUCED BY
Richard C. Martinez
AN ACT
RELATING TO INSURANCE; ENACTING THE TEMPORARY DISABILITY BENEFITS ACT; PROVIDING FOR TEMPORARY DISABILITY BENEFITS FOR NON-WORK-RELATED ILLNESS OR INJURY; ESTABLISHING PRIVATE PLANS FOR THE PAYMENT OF TEMPORARY DISABILITY BENEFITS; ESTABLISHING A STATE PLAN FOR THE PAYMENT OF TEMPORARY DISABILITY BENEFITS; CREATING THE ADVISORY COUNCIL ON TEMPORARY DISABILITY BENEFITS; CREATING THE STATE TEMPORARY DISABILITY BENEFITS FUND; PROVIDING PENALTIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. SHORT TITLE.--This act may be cited as the "Temporary Disability Benefits Act".
Section 2. DEFINITIONS.--As used in the Temporary Disability Benefits Act:
A. "average weekly wage" means the amount derived by dividing a covered individual's total wages earned from the individual's most recent covered employer during the base weeks in the eight calendar weeks immediately preceding the calendar week in which disability commenced by the number of base weeks;
B. "base week" means a period of seven consecutive days starting with the day of disability;
C. "council" means the advisory council on temporary disability benefits;
D. "covered employer" means an individual or organization, including a partnership, association, trust, estate, joint-stock company, insurance company or corporation, or the receiver, trustee in bankruptcy, trustee or successor, or the legal representative of a deceased individual, who is an employer, except the state, its political subdivisions or an instrumentality of the state unless the governmental entity elects to become a covered employer;
E. "covered individual" means an individual who is in employment for which the individual is entitled to remuneration from a covered employer or who has been out of employment for less than two weeks;
F. "day" means a span of time beginning at midnight of one calendar day and ending at midnight of the next calendar day;
G. "department" means the labor department;
H. "disability" means an accident or sickness not arising from or in the course of the individual's employment or, if so arising, not compensable under the workers' compensation law and resulting in the individual's temporary total inability to perform the duties of employment;
I. "fund" means the state temporary disability benefits fund;
J. "period of disability" means the entire period of time during which an individual is continuously and totally unable to perform the duties of employment, except that two periods of disability due to the same or related cause or condition and separated by a period of not more than fourteen days shall be considered as one continuous period of disability; provided that the individual has earned wages during the fourteen-day period with the employer who was the individual's last employer immediately preceding the first period of disability;
K. "private plan" means a private plan of disability benefits approved by the department;
L. "secretary" means the secretary of labor;
M. "state plan" means the state temporary disability benefits plan;
N. "temporary disability benefits" means cash payments that are payable to a covered individual; and
O. "wages" means all compensation payable by covered employers to covered individuals for personal services, including commissions and bonuses and the cash value of all compensation payable in a medium other than cash.
Section 3. COMPENSABLE DISABILITY.--Disability shall be compensable subject to the limitations of the Temporary Disability Benefits Act.
Section 4. NONDUPLICATION OF TEMPORARY DISABILITY BENEFITS.--
A. Temporary disability benefits shall not be paid under the Temporary Disability Benefits Act for a period in which such benefits:
(1) are paid or payable under unemployment compensation or similar law, or under a disability or sickness benefit or similar law of this state, another state or the federal government; or
(2) are paid or payable on account of the disability of the covered individual under a workers' compensation law, occupational disease law or similar legislation of this state, another state or the federal government, except for benefits for permanent partial or permanent total disability previously awarded.
B. When a covered individual's claim for compensation for a temporary disability is contested and therefore delayed and the individual is otherwise eligible for benefits, the individual shall be paid the benefits provided by the Temporary Disability Benefits Act until and unless the individual receives compensation for the temporary disability.
Section 5. NOTICE OF UNEMPLOYMENT COMPENSATION--CONDITIONS.--The department shall provide notice to each covered individual receiving compensation under the provisions of the Temporary Disability Benefits Act explaining the conditions under which the individual may receive unemployment compensation.
Section 6. ESTABLISHMENT OF PRIVATE PLANS.--
A. A covered employer may establish a private plan for the payment of temporary disability benefits in lieu of the temporary disability benefits of the state plan. Temporary disability benefits under a private plan may be provided by a contract of insurance issued by an insurer authorized and admitted to do business in this state or by an agreement between the employer and a union or association representing employees or by a specific undertaking by the employer as a self-insurer.
B. Subject to the insurance laws of this state, a contract of insurance may be between an insurer and a covered employer; or may be between the insurer and two or more covered employers, acting for the purpose through a nominee, designee or trustee; or may be between the insurer and the union or association with which the employer has an agreement. The private plan shall be submitted in detail to the department and shall be approved by the department to take effect on the first day of the next calendar quarter, or on an earlier date if requested by the employer and approved by the department, if the department finds that:
(1) all of the employer's employees are to be covered under the provisions of the private plan with respect to a disability commencing after the effective date of such plan, except as otherwise provided in this section;
(2) eligibility requirements for temporary disability benefits are no more restrictive than as provided in the Temporary Disability Benefits Act for temporary disability benefits payable by the state plan;
(3) the weekly temporary disability benefits payable under the private plan for a week of disability are at least equal to the weekly temporary disability benefit amount payable by the state plan, taking into consideration the coverage with respect to concurrent employment by another employer, and the total number of weeks of disability for which temporary disability benefits are payable under the private plan is at least equal to the total number of weeks for which temporary disability benefits would have been payable by the state plan;
(4) no greater amount is required to be paid by employees toward the cost of temporary disability benefits than that prescribed by law as the amount of worker contribution to the fund for covered individuals under the state plan;
(5) coverage is continued under the private plan while an employee remains a covered individual, but not after the employee becomes employed by another employer following termination of employment to which the private plan relates; and
(6) a majority of the employees to be covered by the private plan have or shall have agreed to such plan prior to the effective date, if employees are required to contribute to the cost of the private plan, as provided in this section.
Section 7. ELECTION BY EMPLOYEES--DEDUCTION OF CONTRIBUTIONS.--
A. If a covered employer requires its employees to contribute toward the cost of temporary disability benefits under a private plan, the private plan shall not become effective unless, prior to the effective date, a majority of the employees in the class to be covered have agreed thereto by written election. In such an event, the employer may, during the continuance of the approved private plan, collect the required contributions by deduction from the wages paid to covered individuals under such plan; provided that if an employer fails to deduct the contributions of any employees at the time their wages are paid or fails to make a deduction at the time wages are paid for the next succeeding payroll period, the employer may not thereafter collect a contribution with respect to the wages previously paid.
B. A covered individual shall not be entitled to temporary disability benefits from the fund with respect to a period of disability commencing while the individual is covered under an approved private plan.
Section 8. EXISTING PLANS.--
A. If, upon the effective date of the Temporary Disability Benefits Act, a covered employer has in effect a plan for the payment of temporary disability benefits to its employees or has in effect an agreement with a union or association whereby there is in effect a plan for the payment of temporary disability benefits to its employees, the plan shall, regardless of the requirements of the Temporary Disability Benefits Act, be deemed to be an approved private plan until the earliest date upon which the employer shall have the right to modify the temporary disability benefits or discontinue the plan or discontinue contributions toward the cost. In this case, the employer shall notify the department of the circumstances.
B. During the continuance of the private plan, the covered individuals shall not be entitled to any temporary disability benefits under the state plan with respect to a period of disability commencing while they are covered under the private plan.
Section 9. TERMINATION OF PRIVATE PLANS.--
A. If the department is furnished satisfactory evidence that a majority of the employees covered by an approved private plan have made election in writing to discontinue the private plan, the department shall withdraw its approval of such plan effective at the end of the next calendar quarter following that in which the evidence is furnished. Upon receipt of a petition signed by not less than ten percent of the employees covered by an approved private plan, the department shall require the employer upon thirty days' written notice to conduct an election by ballot in writing to determine whether a majority of the employees covered by the private plan favor discontinuance; provided that such election shall not be required more often than once in a twelve-month period.
B. Unless sooner permitted, for cause, by the department, an approved private plan shall not be terminated by an employer until at least thirty days after written notice of intention to do so has been given by the employer to the department and after notices are conspicuously posted so as to reasonably ensure their being seen, or after individual notices are given to the employees.
C. The department may after notice and hearing withdraw its approval of an approved private plan if it finds that there is danger that the temporary disability benefits accrued or that will accrue will not be paid, that the security for payment is insufficient or for other good cause shown. An employer, union or association representing employees shall not administer or apply the provisions of an approved private plan to derive profit. The department may withdraw its approval from a private plan that is administered or applied in violation of this provision.
D. In accordance with the provisions of the private plan, termination of an approved private plan shall not affect the payment of temporary disability benefits to disabled employees whose period of disability commenced prior to the date of termination. Employees who have ceased to be covered by an approved private plan because of its termination shall, subject to the limitations and restrictions of the Temporary Disability Benefits Act, become eligible for temporary disability benefits from the fund for disability commencing after such cessation, and contributions with respect to their wages shall immediately become payable.
Section 10. ADDITIONAL TEMPORARY DISABILITY BENEFITS.--The Temporary Disability Benefits Act shall not be construed to prohibit the establishment by a covered employer, without approval, of a supplementary plan or plans providing for the payment to employees of temporary disability benefits in addition to the temporary disability benefits of an approved private plan or to prohibit the collection or receipt of additional voluntary contributions from employees toward the cost of additional temporary disability benefits.
Section 11. INDIVIDUALS ENTITLED TO TEMPORARY DISABILITY BENEFITS.--A covered individual who, on the date of the commencement of a period of disability, is not entitled to temporary disability benefits under an approved private plan shall be entitled to temporary disability benefits under the state plan as provided in the Temporary Disability Benefits Act.
Section 12. DURATION OF TEMPORARY DISABILITY BENEFITS.--
A. Temporary disability benefits that are not in excess of a covered individual's maximum benefits shall be payable with respect to a disability that commences while an individual is a covered individual under the Temporary Disability Benefits Act and shall be payable on the eighth consecutive day of the disability and each day thereafter that the period of disability continues; and if temporary disability benefits shall be payable for three consecutive weeks with respect to a period of disability, then such benefits shall also be payable with respect to the first seven days.
B. The maximum total temporary disability benefits payable to a covered individual for a period of disability shall be either twenty-six times the covered individual's weekly temporary disability benefit amount or one-third of the covered individual's total wages in the base year, whichever is less.
Section 13. LIMITATION OF TEMPORARY DISABILITY BENEFITS.--Notwithstanding any other provision of the Temporary Disability Benefits Act, temporary disability benefits shall not be payable under the state plan to a covered individual:
A. for the first seven consecutive days of each period of disability; except that if temporary disability benefits shall be payable for three consecutive weeks with respect to a period of disability, then such benefits shall also be payable with respect to the first seven days;
B. for more than twenty-six weeks with respect to one period of disability;
C. for a period of disability that did not commence while the individual was a covered individual;
D. for a period during which the individual is not under the care of a legally licensed physician, dentist, optometrist, podiatrist, psychologist or chiropractic physician, who, when requested by the department, shall certify within the scope of the practitioner's practice the disability of the individual, the probable duration and, where applicable, the medical facts within the practitioner's knowledge;
E. for a period of disability due to willfully and intentionally self-inflicted injury, or to an injury sustained in the perpetration by the individual of a crime;
F. for a period during which the individual performs work for remuneration or profit;
G. for a period during which the claim is contested;
H. in a weekly amount that, together with remuneration the individual continues to receive from the employer, would exceed regular weekly wages immediately prior to disability; or
I. for a period during which an individual would be disqualified from unemployment compensation benefits.
Section 14. WEEKLY AND DAILY TEMPORARY DISABILITY BENEFIT AMOUNTS.--With respect to periods of disability, a covered individual's weekly temporary disability benefit rate shall be two-thirds of the individual's average weekly wage. The amount of temporary disability benefits for each day of disability for which such benefits are payable shall be one-seventh of the corresponding weekly temporary disability benefit amount.
Section 15. ENTITLEMENT FOR TEMPORARY DISABILITY BENEFITS.--With respect to periods of disability, a covered individual shall not be entitled to temporary disability benefits under the Temporary Disability Benefits Act unless the individual has, within the fifty-two calendar weeks preceding the week in which the individual's period of disability commenced, established at least twenty base weeks or earned not less than one thousand times the minimum wage in effect on October 1 of the calendar year preceding the calendar year in which the disability commences.
Section 16. STATE DISABILITY TEMPORARY BENEFITS FUND--CREATED.--
A. The "state disability temporary benefits fund" is created in the state treasury.
B. The fund shall be administered by the department. The state treasurer shall deposit in and credit to the fund the amount of worker and employer contributions provided in the Temporary Disability Benefits Act, the entire amount of interest and earnings from investments of the fund and all assessments, fines and penalties collected under that act. The fund shall pay disability benefits pursuant to the Temporary Disability Benefits Act and administrative costs associated with that act. The state treasurer shall invest the fund as other state funds are invested. All balances in the fund shall remain in the fund and shall not revert to the general fund.
Section 17. PAYMENT OF TEMPORARY DISABILITY BENEFITS--FUND--DECEASED INDIVIDUAL--MINORS--REPRESENTATIVE APPOINTED.--
A. Temporary disability benefits payable pursuant to the Temporary Disability Benefits Act shall be paid out of the fund.
B. If a claim for temporary disability benefits is not filed by an otherwise covered individual prior to the individual's death, the first claim for such benefits may be filed by the surviving spouse or any other person who may be legally entitled. Payment of temporary disability benefits shall be made upon receipt of a completed first claim form accompanied by an affidavit executed by the person. The payment by the department of temporary disability benefits upon receipt of the affidavit shall discharge the obligations of the department to the extent of the payment. The department shall prescribe the form of affidavit to be executed.
C. In the event an infant or minor under the age of eighteen years is entitled to receive a sum in payment for temporary disability benefits under the Temporary Disability Benefits Act, the father, mother or natural guardian of the infant or minor shall be authorized to receive the money to the same extent as a guardian of the person and property of the infant or minor duly appointed by the surrogate or the court of the county in which the infant or minor resides, and the release or discharge of the father, mother or natural guardian shall be a full and complete discharge of all claims or demands of the infant or minor. The department shall prescribe the form of affidavit and release to be executed by the parties concerned.
D. The secretary is authorized to appoint a representative to act for an individual who may be entitled to temporary disability benefits by legally receiving and disbursing the payments under the direction of the secretary when it appears that the individual is mentally, legally or physically unable to properly receive or disburse the payments, or when the individual, after due diligence, cannot be located.
E. An individual whose claim has been denied may appeal to the advisory council on temporary disability benefits.
Section 18. ADVISORY COUNCIL ON TEMPORARY DISABILITY BENEFITS--CREATION.--
A. The "advisory council on temporary disability benefits" is created and shall be composed of one ex-officio and ten appointed members as follows:
(1) the secretary or the secretary's designee;
(2) four representatives of labor, who shall be appointed by the governor;
(3) two representatives of employers, who shall be appointed by the governor;
(4) two representatives of the insurance industry, who shall be appointed by the governor; and
(5) two representatives of the medical profession, who shall be appointed by the governor.
B. The council shall select a chair, a vice chair and other officers as it deems necessary.
C. The council shall meet no less than twice annually and may meet more frequently upon the call of the chair. A majority of council members then serving constitutes a quorum for the transaction of council business. The council shall:
(1) study the administration and operation of the Temporary Disability Benefits Act;
(2) aid the department in formulating policies and rules and consult and advise the secretary;
(3) report to the appropriate interim legislative committee annually, and at such other times as it may deem appropriate, its recommendations for legislation or administration necessary or desirable to improve and perfect the operation of the Temporary Disability Benefits Act; and
(4) hear and decide an appeal for a claim denied.
D. Council members shall receive per diem and mileage as provided for nonsalaried public officers in the Per Diem and Mileage Act and shall receive no other compensation, perquisite or allowance.
Section 19. RECIPROCAL AGREEMENTS FOR CERTAIN TEMPORARY DISABILITY BENEFITS.--
A. The secretary is authorized to enter into a reciprocal agreement with the department of labor of any other state or other corresponding agency for the purpose of granting a covered individual residing in this state eligibility for the award of temporary disability benefits under the Temporary Disability Benefits Act, based on employment in the other state and granting a covered individual residing in the other state eligibility for the award of corresponding temporary disability benefits under the statutory authority of the other state, based on employment in this state.
B. If the secretary has entered into a reciprocal agreement with another state pursuant to Subsection A of this section, the secretary is authorized to determine the amount of temporary disability benefits to be paid to an individual, in accordance with the provisions of the Temporary Disability Benefits Act, based on the covered individual's employment in the other state.
Section 20. NOTICE AND CLAIM FOR TEMPORARY DISABILITY BENEFITS.--
A. In the event of the disability of an individual covered under the state plan, the employer shall on the ninth day of disability issue to the covered individual and the department printed notices on department forms containing the name, address and social security number of the individual, wage information as the department may require to determine the individual's eligibility for temporary disability benefits, the name and address of the employer and a printed copy of department benefit instructions. No later than thirty days after the commencement of the period of disability for which the notice is furnished, the covered individual shall furnish to the department a notice and claim for temporary disability benefits under the state plan or for disability during unemployment. Upon the submission of the notices by the employer and the individual, the department may issue temporary disability benefit payments for periods not exceeding three weeks pending the receipt of medical proof. When requested by the department, the notice and proof shall include certification of total disability by the attending physician or a record of hospital confinement. Failure to furnish notice and proof in the time or manner provided in this section shall not invalidate or reduce a claim if it is shown to the satisfaction of the department not to have been reasonably possible to furnish the notice and proof and that the notice and proof was furnished as soon as reasonably possible.
B. A covered individual claiming temporary disability benefits under the state plan or for disability during unemployment shall, when requested by the department, submit at intervals, but not more than once a week, to an examination by a legally licensed physician, dentist, podiatrist, chiropractic physician or public health nurse designated by the department. In all cases of physical examination of an individual, the examination shall be made by a designee of the department, who shall be the same sex as the individual if requested by the individual. All examinations by physicians, dentists, podiatrists, chiropractic physicians or nurses designated by the department shall be without cost to the individual and shall be held at a reasonable time and place. Refusal to submit to a requested examination shall disqualify the individual from all temporary disability benefits for the period of disability in question, except as to temporary disability benefits already paid.
C. All medical records of the department, except to the extent necessary for the proper administration of the Temporary Disability Benefits Act, shall be confidential and shall not be published or be open to public inspection, other than to public employees in the performance of their public duties, in any manner revealing the identity of the individual or the nature or cause of disability nor admissible in evidence in an action or special proceeding other than one arising under the Temporary Disability Benefits Act.
Section 21. REVIEW.--
A. If a covered individual claiming temporary disability benefits under an approved private plan is unable to agree with the employer or insurer as to the person's temporary disability benefits, the individual may, within one year after the beginning of the period for which such benefits are claimed, file a complaint with the department, which shall conduct an investigation, including information hearings, as it deems proper. The complaint shall be filed in writing in a form satisfactory to the department. The department shall:
(1) have the authority to make procedural rules providing for a fair and impartial hearing;
(2) designate one or more hearing officers, who shall conduct a hearing on issues left unsettled in the complaint, upon due notice to the person, the employer and the insurer, if any, and during which time any party in interest shall have the right to appear. During the hearing, the hearing officer shall:
(a) not be bound by the rules of evidence;
(b) ensure that the proceedings are recorded, though they need not be transcribed unless the order on the disputed claim is to be reviewed; and
(c) determine facts and issue an order disposing of the issues presented, which shall be binding on the person, the employer and the insurer; and
(3) serve the hearing officer's final order, which shall not be appealable, on interested parties by registered mail addressed to their last-known addresses.
B. The cost of recording and transcribing the proceedings and of preparation of the entire record required on review shall constitute a cost of administering the Temporary Disability Benefits Act.
C. Any party in interest aggrieved by action of the hearing officer may secure judicial review in district court through a proceeding in lieu of prerogative writ.
Section 22. FEES OF ATTORNEY AND MEDICAL WITNESSES.--
A. In a proceeding conducted as the result of a complaint filed with the department as provided in the Temporary Disability Benefits Act, the hearing officer may:
(1) if an award of temporary disability benefits is made to a covered individual, allow a reasonable fee, not exceeding twenty percent of the amount of the award, to the attorney, if any, representing the individual, payable by the employer or insurer; and
(2) allow reasonable appearance fees for medical witnesses, the payment of which may be assessed against the individual, the employer or the insurer as the hearing officer shall determine.
B. Except for amounts allowed, it is unlawful for an attorney or another person to ask for, contract for or receive, directly or indirectly, a charge for services in securing or attempting to secure temporary disability benefits or for a medical witness to make a charge for appearance at a hearing held pursuant to the Temporary Disability Benefits Act.
Section 23. RECORDS AND REPORTS.--
A. An employer shall keep true and accurate employment records containing information as may reasonably be prescribed by the department. The records shall be open to inspection by the department or its authorized representative at any time during ordinary business hours for the purpose of ascertaining whether an employer is a covered employer and, if so, whether the employer is complying with the provisions of the Temporary Disability Benefits Act. Obtained information shall not be published or open to public inspection, other than to public employees in the performance of their public duties, in any manner revealing an employee's or employer's identity, but an individual at a hearing before the department or a hearing officer shall be supplied with information from the records to the extent necessary for the proper presentation of a claim.
B. Covered employers whose employees are participating in an approved private plan and an insurer of an approved private plan shall furnish reports and information and make available to the department such records as the department may by rule require for the proper administration of the Temporary Disability Benefits Act.
C. The department shall make available to any insurer or self-insurer, on request, information from its records that is necessary for the determination of liability under an approved private plan.
Section 24. PENALTIES.--
A. Whoever makes a false statement or representation knowing it to be false or who knowingly fails to disclose a material fact to obtain or increase a temporary disability benefit under the state plan or an approved private plan or for a disability during unemployment either for the individual or for another individual, shall be liable for a fine of twenty dollars ($20.00) to be paid to the department. Each false statement or representation or failure to disclose a material fact shall constitute a separate offense. Upon refusal to pay the fine, it shall be recovered in a civil action by the department in the name of the state.
B. An employer or officer or agent of an employer or another person who makes a false statement or representation knowing it to be false or who knowingly fails to disclose a material fact to prevent or reduce the temporary disability benefits to a covered individual therefore entitled, or to avoid becoming or remaining subject to or to avoid or reduce contribution or other payment required from an employer under the Temporary Disability Benefits Act or who willfully fails or refuses to make such contributions or other payment or to furnish required reports or to produce or permit the inspection or copying of records as required, shall be liable for a fine of twenty dollars ($20.00) to be paid to the department. Upon refusal to pay the fine, it shall be recovered in a civil action by the department in the name of the state.
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