51.1-1125 - Adjustments in supplemental disability benefits.

§ 51.1-1125. Adjustments in supplemental disability benefits.

A. In addition to offsets equal to the amount of any benefits paid to aparticipating employee under the Act, supplemental disability benefitpayments shall be offset by an amount equal to any sums payable to aparticipating employee from the following sources:

1. During the first 12 months the employee receives disability benefits, anamount equal to the employee's wages and salary from any employment times theincome replacement percentage payable;

2. After the first 12 months the employee receives disability benefits, anamount equal to 70 percent of the employee's wages and salary from anyemployment;

3. Except as provided in subsection G, disability payments from the SocialSecurity Administration, military disability benefits, local governmentdisability benefits, federal civil service disability benefits or othersimilar governmental disability program benefits received by the employee orhis family as a result of the qualifying disability;

4. Benefits received from any other group insurance contract provided by theCommonwealth for the purpose of income replacement;

5. Benefits paid under any compulsory benefits law; and

6. If the participating employee receives a settlement in lieu of periodicpayments for a disability compensable under the Act, an amount determined bydividing the workers' compensation benefit which such employee would havereceived had the lump-sum settlement not been consummated into the settlementactually accepted by the employee.

B. If the plan administrator deems a participating employee to be eligiblefor benefits from any of the sources listed in subdivisions A 3, A 4, and A5, the plan administrator may direct the participating employee to apply forthose benefits and to pursue whatever additional steps are necessary toobtain the benefits. If a participating employee fails or refuses to pursuethe available benefits as directed by the plan administrator, supplementaldisability benefit payments may be reduced by amounts from any of the sourceslisted in subdivisions A 3, A 4, and A 5 for which a participating employeeis deemed eligible by the plan administrator as if the employee received suchamounts. However, if the employee has applied for such benefits, and hasreapplied and appealed denials of the claim as requested by the administratorof the plan, and the claim is not approved, the employee's supplementaldisability payments shall not be reduced thereby.

C. If a participating employee's disability benefit payments are reduced asthe result of payments from sources listed in subdivisions A 3, A 4, and A 5or pursuant to subsection B, the employee's disability benefits shall notthereafter be further reduced on account of cost-of-living increases inpayments from such sources.

D. Participating employees shall be required to repay, with interest, to theBoard or the employer any overpayments of supplemental disability benefits onaccount of the failure of the employee to provide the Board or its designeewith information necessary to make any of the reductions required to be madeunder this article.

E. Any payment to a participating employee that is later determined by theBoard or by the employer to have been procured on the basis of any falsestatement or falsification of any record knowingly made by or on behalf ofthe employee, or the employee's failure to make any required report of changein disability status, may be recovered from the employee by the Board, withinterest, either by way of a credit against future payments due the employeeor by an action at law against the employee.

F. If a participating employee's payments under the Act are adjusted orterminated for refusal to work or to comply with the requirements of §65.2-603, his disability benefits shall be computed as if he were receivingthe compensation to which he would otherwise be entitled under the Act.

G. Supplemental disability payments will not be offset for a participatingemployee if the employee is receiving a primary retirement benefit forservice in the United States armed services, even if a percentage of thatprimary retirement benefit has been declared a disability payment. Anydisability payment that is not a part of the primary retirement benefit willbe offset.

(1998, c. 774; 1999, c. 144; 2000, c. 889; 2003, c. 5; 2006, cc. 778, 841.)