DAR File No. 37140

Labor Commission, Industrial Accidents

Rule R612-12

Workers' Compensation Coverage Waivers

Notice of Proposed Rule

(Repeal)

DAR File No.: 37140
Filed: 12/28/2012 02:41:42 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The Labor Commission proposes to repeal this and other Industrial Accident Division rules in order to consolidate, reorganize, and reenact the substance of those rules in a format that is more logical and user friendly.

Summary of the rule or change:

The existing Rule R612-12 will be repealed in its entirety. The substance of the existing rule will be reenacted in new Rules R612-100 and R612-400. (DAR NOTE: The proposed new Rule R612-100 is under DAR No. 37124, and the proposed new Rule R612-400 is under DAR No. 37127 in this issue, January 15, 2013, of the Bulletin.)

State statutory or constitutional authorization for this rule:

• Section 34A-2-101 et seq.
• Section 34A-3-101 et seq.
• Section 34A-1-104 et seq.
• Section 78B-8-402
• Section 78B-8-404

Anticipated cost or savings to:

the state budget:

Because the substantive provisions of the existing rule will be reenacted as a new rule, repeal of the existing rule will not result in costs or savings to the state budget.

local governments:

Because the substantive provisions of the existing rule will be reenacted as a new rule, repeal of the existing rule will not result in costs or savings to local government.

small businesses:

Because the substantive provisions of the existing rule will be reenacted as a new rule, repeal of the existing rule will not result in costs or savings to small businesses.

persons other than small businesses, businesses, or local governmental entities:

Because the substantive provisions of the existing rule will be reenacted as a new rule, repeal of the existing rule will not result in costs or savings to other affected persons.

Compliance costs for affected persons:

The repeal of existing Rule R612-12 and reenactment of its substantive provisions in Rules R612-100 and R612-400 will not change interested parties' rights or duties and will not impose any compliance costs on affected persons.

Comments by the department head on the fiscal impact the rule may have on businesses:

The repeal of existing Rule R612-12, coupled with reenactment of the rule's substantive provisions in the new Rules R612-100 and R612-400, is intended to make the rule easier to find and use by businesses and all other stakeholders in the workers' compensation system. The Commission does not anticipate that the improved organization of these rules will result in any fiscal impact on businesses.

Sherrie Hayashi, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Labor Commission
Industrial Accidents
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Ron Dressler at the above address, by phone at 801-530-6841, by FAX at 801-530-6804, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

02/14/2013

This rule may become effective on:

02/21/2013

Authorized by:

Sherrie Hayashi, Commissioner

R612. Labor Commission, Industrial Accidents.

[R612-12. Workers' Compensation Coverage Waivers.

R612-12-1. Authority and Purpose.

This rule is enacted under authority of 34A-1-104 of the Utah Labor Commission Act and Title 34A, Chapter Two, Part One, the Workers' Compensation Coverage Waivers Act ("the Act"). The purpose of this rule is to establish procedures for workers' compensation coverage waivers ("coverage waivers"). The rule also addresses the effect of coverage waivers and the adjudicative procedures to be followed by the Division in granting, denying, or revoking coverage waivers.

 

R612-12-2. Administration by Industrial Accidents Division.

Except as otherwise provided, the Utah Labor Commission's Division of Industrial Accidents ("Division") shall administer the provisions of the Act and this rule.

 

R612-12-3. Procedure for Application and Issuance of Certificate.

A. A business entity may apply for a coverage waiver by completing a form provided by the Commission, submitting required supporting documents, and paying a fee of $50. The Division's determination of whether to grant or deny a request for coverage waiver shall be conducted as informal proceedings under the Utah Administrative Procedures Act.

B. Supporting documents. 34A-2-1004 of the Workers' Compensation Coverage Waivers Act requires a business entity to submit the following documentation to support its request for a coverage waiver:

(1) a copy of two or more of the following:

(a) the business entity's federal or state income tax return that shows business income for the complete taxable year that immediately precedes the day on which the business entity submits the information;

(b) a valid business license;

(c) a license to engage in an occupation or profession, including a license under Title 58, Occupations and Professions; or

(d) documentation of an active liability insurance policy that covers the business entity's activities; or

(2) a copy of one item listed in Subsection (1) and a copy of two or more of the following:

(a) proof of a bank account for the business entity;

(b) proof that for the business entity there is:

(i) a telephone number; and

(ii) a physical location; or

(c) an advertisement of services in a newspaper of general circulation or telephone directory showing the business entity's:

(i) name; and

(ii) contact information.

C. Fee. A business entity applying for a workers' compensation coverage waiver certificate shall submit payment of a fee of $50.00. Such fees are used to defray the costs of processing and evaluating the application and are nonrefundable. If payment of the fee is made by check, the Division may delay issuance of a coverage waiver until it has verified that the check will be honored.

D. Issuance or Denial of Certificate. If the Division determines that a business entity has satisfied each requirement for a coverage waiver, the Division will issue the coverage waiver. If the Division determines that a business entity has not satisfied each requirement for a workers' compensation insurance waiver, the Division will issue a written denial to the business entity, stating the basis for denial and setting forth the business entity's appeal rights.

 

R612-12-4. Duration, Renewal and Revocation.

A. Duration. Subject to revocation of a coverage waiver as provided by subparagraph C. of this section, a coverage waiver remains in effect for the following time periods:

1. A coverage waiver issued by a licensed workers' compensation insurance company prior to July 1, 2011, the effective date of the Workers' Compensation Coverage Waivers Act, shall remain effective for the period shown on the coverage waiver.

2. A coverage waiver issued by the Division after July 1, 2011, shall be effective for one year from the date the coverage waiver is issued.

B. Renewal. The Division will renew a business entity's coverage waiver if:

1. The business entity requests renewal; and

2. The business entity satisfies all requirements in effect at the time of the renewal request.

C. Revocation. If the Division has reason to believe that a business entity no longer qualifies for a coverage waiver, the Division shall institute proceedings to determine whether the business entity's coverage waiver should be revoked. Such proceedings shall be conducted as informal proceedings under the Utah Administrative Procedures Act. If the Division concludes that the business entity does not satisfy each requirement for a workers' compensation insurance waiver, the Division will issue a written order revoking the waiver certificate, stating the basis for revocation, and setting forth the business entity's appeal rights. The Division may also initiate other proceedings authorized by the Utah Workers' Compensation Act to compel the business entity to obtain workers' compensation coverage for its employees.

 

R612-12-5. Review of Division Decisions to Deny or Revoke Waiver Certificate.

A business entity may challenge a Division decision to deny or revoke the business entity's coverage waiver by filing an appeal of the decision with the Commission's Adjudication Division. Such appeal proceedings shall be assigned to an administrative law judge and conducted as de novo formal adjudicatory proceedings pursuant to the Utah Administrative Procedures Act.

 

R612-12-6. Effect, Verification and Limitation of Coverage Waiver.

A. Effect of coverage waiver. 34A-2-103 (7) (c) permits an employer contracting with a business entity to rely upon a valid coverage waiver issued by the Division as proof that the business entity is not required to have a workers' compensation insurance policy.

B. Verification of coverage waiver. An employer seeking to rely upon a business entity's coverage waiver shall retain the following documents:

1. A photocopy of the coverage waiver issued to the business entity by the Division; and

2. A printout of the Division's web page showing that the business entity's coverage waiver had not been revoked as of the date on which the employer contracted with the business entity.

C. Limitations to effect of coverage waiver. A coverage waiver does not excuse a business entity from obtaining and maintaining workers' compensation insurance coverage for employees who are entitled to such coverage under the Utah Workers' Compensation Act. If and when a business entity has such employees, any coverage waiver previously issued to that business entity becomes void and the business entity must immediately obtain workers' compensation coverage.

 

KEY: workers' compensation, administrative procedures, reporting, settlements

Date of Enactment or Last Substantive Amendment: June 22, 2011

Authorizing, and Implemented or Interpreted Law: 34A-2-101 et seq.; 34A-3-101 et seq.; 34A-1-104; 78B-8-402; 78B-8-404]