CHAPTER 191

FORMERLY

SENATE SUBSTITUTE NO. 1 FOR

SENATE BILL NO. 178

AS AMENDED BY

SENATE AMENDMENT NO. 1

AN ACT TO AMEND TITLE 29 OF THE DELAWARE CODE RELATING TO THE ESTABLISHMENT OF A DISABILITY INSURANCE PROGRAM.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :

Section 1. Amend Title 29, of the Delaware Code by adding thereto a new Chapter 52A to read as follows:

“Chapter 52A. Disability Insurance Program

§ 5251. Definitions.

(a) “Carrier” shall mean the disability insurance company selected pursuant to §5254 of this Chapter.

(b) “Committee” shall mean the State Employee Benefits Committee as established by §9602 of this title.

(c) “Creditable Compensation” shall mean the base rate of compensation that the employee received on the last day of employment before the employee became disabled as determined by the Committee.

(d) "Disability benefit" shall mean income replacement payments payable to a participating employee under a short-term or long-term disability benefit program pursuant to this Chapter.

(e) "Employee” shall mean an eligible “employee” as defined in 29 Del. C. Section 5501(e) who elects to participates in the Program as specified in §5519 of this title.

(f) "Program" means the Disability Insurance Program created pursuant to this Chapter providing short-term and long-term disability benefits for eligible employees electing to participate in the Program.

(g) “Employment” shall mean any occupation for which the employee is reasonably suited by training or experience.

§ 5252. Payment of premium or subscription charges.

The State shall pay all premium or subscription charges for the full cost of providing coverage for the Disability Insurance Program.

§ 5253. Specifications of the coverage.

(a) Participating employees shall be eligible to utilize earned sick leave for absences due to accident, illness, or injury for periods before disability benefits commence under this Chapter, such that the participating employee receives 100 percent of creditable compensation for such periods, not to exceed the employee’s sick leave balance.

(b) Short-term disability benefit.

(1) An employee who is determined by the Committee, in its sole discretion, to be mentally or physically unable to perform the essential functions of the employee’s position as defined in rules and regulations adopted by the Committee, with reasonable accommodation as required by federal law, shall be entitled to receive short-term or long-term benefits pursuant to this Chapter. An employee who receives short-term or long-term disability benefits pursuant to this Chapter may be required, in the sole discretion of the Committee, to participate in rehabilitation or retraining services, or a combination thereof, under a program established by the Committee. Short-term disability benefits for participating employees shall commence upon the expiration of a twenty-calendar-day elimination period. Such elimination period shall begin on the first day following the onset of physical or mental incapacity as determined by the Committee, in its sole discretion. If an employee returns to work for one day or less during the twenty-calendar-day elimination period but cannot continue to work thereafter, the period worked shall not be considered to have interrupted the twenty-calendar-day elimination period.

(2) Except as provided in §5253(b)(4) of this Chapter, short-term disability benefits pursuant to this Chapter shall be payable at the rate of 75% of the participating employee's creditable compensation prior to the onset of the disability during the period that an employee is disabled, as determined by the Committee.

(3) Creditable compensation during periods an employee receives short-term disability benefits shall include general salary increases awarded during the period of short-term disability coverage.

(4) An employee may utilize earned sick leave to supplement short-term disability benefits to equal 100% of pre-disability creditable compensation for the maximum period of 182- calendar days.

(5) If a participating employee returns to his/her position on a full-time basis, as defined by the Committee, for fifteen consecutive calendar days or longer, any succeeding period of disability for which the employee shall become eligible shall constitute a new period of short-term disability with a corresponding twenty calendar day elimination period.

(c) Long-term disability benefit.

(1) Long-term disability benefits for participating employees shall commence upon the expiration of a 182-calendar day waiting period. The waiting period shall commence on the first day following the onset of the disability as determined by the Committee, in its sole discretion. If an employee returns to work for 14 or fewer consecutive calendar days during such 182-calendar day waiting period and cannot thereafter continue to work, the periods worked shall not be deemed to have interrupted the 182-calendar day waiting period.

(2) Long-term disability benefits for an eligible employee shall be paid in an amount equal to 60 percent of the participating employee’s creditable compensation prior to the onset of the disability. In no event shall the employee be entitled to utilize earned sick leave to supplement long-term disability benefits.

(3) Long term disability benefits shall not include general salary increases during the period of long term disability. Long term disability benefits may be increased annually by an amount approved by the Committee.

(4) Any employee who applies for long-term benefits pursuant to this Chapter must apply to the Social Security Administration for disability benefits. Long-term disability benefits provided under this Chapter shall be reduced by any disability benefits received from the Social Security Administration.

(d) Eligibility for participation in the short-term and long-term disability insurance Program shall terminate upon the earliest to occur of an employee's (i) ability to return to employment as determined by the Committee, (ii) death, or (iii) normal service retirement at age 62.

§ 5254. Selection of the group disability insurance carrier.

Disability insurance coverage pursuant to this Chapter may be provided and/or administered by an insurance carrier licensed under the laws of this State. The Carrier shall be selected by a vote of the Committee, and legally authorized to transact business within this State, and having adequate servicing facilities to carry out the terms of the contract as awarded by Committee.

§ 5255. Disability program design and administration.

The Carrier selected pursuant to §5254 of this Chapter may determine the eligibility of a participating employee to receive short-term and/or long-term disability benefits. Such Carrier shall also provide short-term and long-term disability benefits to eligible employees, and shall administer both the short and long-term disability programs established pursuant to this Chapter. The Committee may adopt rules and regulations regarding proper administration of the disability program. Such Rules shall include, but not be limited to, standards relating to the determination of disability; appeal procedures, requirements for medical or psychological examinations; the adjustment or termination of payments based on the mental or physical condition of the employee, and/or education, training, and experience of the employee. The disability program administrator's performance shall be evaluated on an annual basis by the Committee.

§ 5260. Authority and duties of the State Employee Benefits Committee.

The State Employee Benefits Committee established by § 9602 of this Title shall have the following powers, duties and functions under this Chapter:

(a) Control and management of the State Employees’ Disability Insurance Program as provided by this Chapter.

(b) Authority to establish the State Employees’ short-term disability insurance program on a self-insured basis and a long-term disability insurance program on an insured basis.

(c) Selection, in its sole discretion, of the carriers or third party administrators deemed to offer the Programs which will best satisfy the interests of the State and its employees in carrying out the intent of this Chapter;

(d) Authority to adopt rules and regulations for the general administration of the Disability Insurance Program established pursuant to this Chapter.

(e) Authority to make and enter into any and all contracts with any agency of the State, or any outside agency, for the purpose of assisting in the general administration of this Chapter.”

Section 2. Amend Chapter 55, Title 29, of the Delaware Code by adding thereto a new section to read as follows:

Ҥ5519 Disability Insurance option.

(a) An employee who, as of January 1, 2006, has fewer than 5 years of credited service, will be ineligible for disability pension coverage under §5524 of this title and shall be covered under the Disability Insurance Program under Chapter 52A of this title.

(b) An employee who, as of January 1, 2006, has 5 or more years of credited service may elect either:

(1) to continue coverage under the disability pension provisions of 29 Del. Code §5524 ; or,

(2) to elect coverage under the Disability Insurance Program provided in 29 Del. Code Chapter 52A.

(3) This election must be made in a form approved by the Board, and filed prior to December 15, 2005 in the State Pension Office, and shall be effective January 1, 2006. All elections made pursuant to this subsection shall be irrevocable. Members of the Delaware National Guard or members of the U.S. Armed Forces Reserves who are serving on active duty during the period of election required pursuant to this subsection shall elect a coverage option within 45 days of discharge from active duty.”

Section 3. Amend §5501 (d), Title 29, of the Delaware Code by adding a new subsection to read:

“(20) Service for the period of time that an employee was collecting disability benefits pursuant to Chapter 52A of this Title.”

Section 4. Amend §5201 (b), Title 29, of the Delaware Code by adding a new sentence at the end of that subsection to read:

“An ‘eligible pensioner’ shall include those employees who are receiving disability benefits pursuant to Chapter 52A of this Title.”

Section 5. Amend §5501 (d), Title 29, of the Delaware Code by adding a new paragraph to read:

“(21) Service for accrued sick leave, not in excess of 1 year, provided that the employee on or before the date of issuance of the first benefit check, pays into the fund an amount equal to 5% of the final average compensation for each month credited. Periods of accrued sick leave beyond 90 days may be converted to creditable service; one month of credited service will be granted for each 21 days of accrued sick leave beyond 90 days. Educational employees will receive credited service based on the contract establishing the employee’s school year. Any credited service purchased under this paragraph shall not be used to determine eligibility for benefits under this Chapter.”

Section 6. The Bill shall be effective January 1, 2006, except Section 5, which will be effective July 1, 2005.

Approved July 12, 2005