PART III. PROVISION FOR TEMPORARY DISABILITY

INSURANCEBENEFITS

 

§392-41  Provision for payment of benefits. (a)  An employer or an association of employers shall secure temporarydisability benefits for their employees in one or more of the following ways:

(1)  By insuring and keeping insured the payment oftemporary disability benefits with any stock, mutual, reciprocal or otherinsurer authorized to transact the business of disability insurance in theState; or

(2)  By depositing and maintaining with the statedirector of finance, securities, or the bond of a surety company authorized totransact business in the State, as are satisfactory to the director securingthe payment by the employer of temporary disability benefits according to theterms of this chapter; or

(3)  Upon furnishing satisfactory proof to thedirector of the employer's or its solvency and financial ability to pay thetemporary disability benefits herein provided, no insurance or security orsurety bond shall be required, and the employer shall make payments directly tothe employer's employees, as they may become entitled to receive the same underthe terms and conditions of this chapter; or

(4)  By a plan, entitling employees to cash benefitsor wages during a period of disability, in existence on the effective date ofthis chapter.

(A)  If the employees of an employer or anyclass or classes of such employees are entitled to receive disability benefitsunder a plan or agreement which remains in effect on January 1, 1970, theemployer, subject to the requirements of this section, shall be relieved ofresponsibility for making provision for benefit payments required under thischapter until the earliest date, determined by the director for the purposes ofthis chapter, upon which the employer has the right to discontinue the plan oragreement or to discontinue the employer's contributions toward the cost of thetemporary disability benefits.  Any plan or agreement referred to in thissubparagraph may be extended, with or without modification, by agreement orcollective bargaining between the employer or employers or an association ofemployers and an association of employees; provided the benefits under the planor agreement, as extended or modified, are found by the director to be at leastas favorable as the disability benefits required by this chapter.

(B)  Any other plan or agreement in existenceon January 1, 1970, which the employer may, by the employer's sole act,terminate at any time, or with respect to which the employer is not obligatedto continue for any period to make contributions, may be accepted by thedirector as satisfying the obligation to provide for the payment of benefitsunder this chapter if the plan or agreement provides benefits at least asfavorable as the disability benefits required by this chapter and does notrequire contributions of any employee or of any class or classes of employeesin excess of the amount authorized in section 392-43, except by agreement andprovided the contribution is reasonably related to the value of the benefits asdetermined by the director.  The director may require the employer to enterinto an agreement in writing with the director that until the employer shallhave filed written notice with the director of the employer's election toterminate such plan or agreement or to discontinue making necessarycontributions toward the cost of providing benefits under the plan oragreement, the employer will continue to provide for the payment of thedisability benefits under the plan or agreement.  Any plan or agreementreferred to in this subparagraph may be extended, with or without modification;provided the benefits under the plan or agreement, as extended or modified, arefound by the director to be at least as favorable as the disability benefitsrequired by this chapter; or

(5)  By a new plan or agreement.  On or afterJanuary 1, 1970, a new plan or agreement with an insurer may be acceptedby the director as satisfying the obligation to provide for the payment ofbenefits under this chapter if the plan or agreement provides benefits at leastas favorable as the disability benefits required by this chapter and does notrequire contributions of any employee or of any class or classes of employeesin excess of the amount authorized in section 392-43, except by agreement andprovided the contribution is reasonably related to the value of the benefits asdetermined by the director.  Any such plan or agreement shall continue untilwritten notice is filed with the director of intention to terminate the plan oragreement, and any modification of the plan or agreement shall be subject tothe written approval of the director.

(b)  During any period in which any plan oragreement or extension or modification thereof authorized under subsection (a)(4)or (5) provides for payments of benefits under this chapter, the responsibilityof the employer and the obligations and benefits of the employees shall be asprovided in the plan or agreement or its extension or modification rather thanas required under this chapter; provided that:

(1)  The employer or insurer has agreed in writingwith the director to pay the assessments imposed by section 392-67; and

(2)  If the benefits provided by the plan or agreementor extension or modification thereof include benefits falling within thedefinition of "sick leave" as defined in section 398-1, any amount inexcess of the minimum statutory equivalent, as determined by the department,may be used for the purposes of chapter 398.

(c)  If any plan or agreement authorized undersubsection (a)(4) or (5) covers less than all of the employees of a coveredemployer, the requirements of this chapter shall apply with respect to theemployer's remaining employees not covered under the plan or agreement.

(d)  As used in subsection (a)(4) or (5),"benefits at least as favorable as the disability benefits required bythis chapter" means the temporary disability benefits under any plan oragreement, in whole or in part, whose component parts (waiting period forillness, waiting period for accident, duration of benefits, and percentage ofwage loss replaced) add in total to cash benefits or wages that are determinedby the director to be at least as favorable as the disability benefits requiredby this chapter.  The insurance commissioner shall establish a set of tablesshowing the relative value of different types of cash benefits and wages toassist the director in determining whether the cash benefits and wages under aplan are at least as favorable as the temporary disability benefits required bythis chapter.

(e)  Any decision of the director renderedpursuant to this section with respect to the amount of security required,refusing to permit security to be given or refusing to accept a plan oragreement as satisfying the obligation to provide for the payment of benefitsunder this chapter shall be subject to review on appeal in conformity with theprovisions of this chapter.

(f)  In order to provide the coverage requiredby this chapter for employers otherwise unable to obtain or provide suchcoverage, the insurance commissioner may, after consultation with the insurerslicensed to transact the business of disability insurance in this State,approve a reasonable plan or plans for the equitable apportionment among suchinsurers of employer applicants for such insurance who are in good faithentitled to but are unable to procure such insurance through ordinary methodsand, when such a plan has been approved, all such insurers shall subscribethereto and participate therein; provided, however, that the commissioner shallnot, for insurance issued or in connection with any such plan or plans, requireor allow the use of premium rates which are either inadequate or excessive inrelation to the benefits to be provided.  Any employer applying for suchinsurance or any insured under such plan and any insurer affected may appeal tothe commissioner from any ruling or decision of the manager or committeedesignated to operate such plan.  All orders of the commissioner in connectionwith any such plan shall be subject to judicial review as provided in chapter91.

(g)  All insurers shall in form prescribed bythe director notify employer applicants who are unable to procure the requiredinsurance through ordinary methods, the availability of the plan described in(f) above. [L 1969, c 148, pt of §1; am L 1971, c 109, §1(d); am L 1978, c 200,§1; gen ch 1985; am L 2005, c 243, §1]

 

Attorney General Opinions

 

  Where department essentially has two TDI plans (full-timeteachers are covered by a plan approved by DLIR pursuant to subsection (a)(5),and department's A+ and other employees are paid benefits in accordance withTDI law found in chapter 392), if an individual is employed by department asboth a full-time teacher and an A+ employee and the individual becomes disabledfor both jobs, the department must pay the individual under both TDI plans. Att. Gen. Op. 97-9.