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F I S C A L I M P A C T R E P O R T

SPONSOR:	Cravens		DATE TYPED:	02/03/02		HB
SHORT TITLE:		Proof of Disability				SB	154
					ANALYST:		Wilson

APPROPRIATION

Appropriation Contained		Estimated Additional Impact		Recurring or Non-Rec	Fund Affected
FY03	FY04	FY03	FY04
			NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

Responses Received From

Health Policy Commission (HPC)

Retiree Health Care Authority (RHCA)

Public Regulation Commission (PRC)

SUMMARY

Synopsis of Bill

Senate Bill 154 amends the Insurance Code limiting the requirement to provide proof of a disability to an employer for insurance. An individual who is at least sixty years old and has certified a disability to an employer for the previous five years shall not be required to certify that disability in order to obtain insurance.

Significant Issues

Employees who are disabled and receiving disability benefits are required to establish that they continue to be disabled in order to continue receiving benefits. Proponents of SB154 believe that limits should be placed on the number of times this can be required in certain instances. Opponents believe that employers and insurers need to establish whether or not a person is disabled in order to continue providing benefits and to prevent fraud.

ADMINISTRATIVE IMPLICATIONS

The Insurance Division of the PRC currently administers the insurance Code. Enforcement of the provisions of SB154 will require no additional resources.

TECHNICAL ISSUES

SB154 as drafted creates enforcement problems for the Insurance Division of the PRC. This bill prohibits an employer from requiring certification of disability in certain circumstances. The PRC recommends that since the Insurance Division does not license or regulate employers, it might be more appropriate to have SB154 prohibit insurers from requiring proof of disability. This could be accomplished by mandating that all disability income in policies contain a provision limiting the insurers right to request proof of disability in certain circumstances.

SB154 needs to add definitions of the terms: “disability” and “certification of disability.”

DW/njw