AN ACT Relating to death and disability benefits; amending RCW 41.26.150, 41.26.160, and 41.26.510; and reenacting and amending RCW 41.26.470.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. Section 15, chapter 209, Laws of 1969 ex. sess. as last amended by section 12, chapter 185, Laws of 1987 and RCW 41.26.150 are each amended to read as follows:

(1) Whenever any active member, or any member hereafter retired, on account of service, sickness or disability, not caused or brought on by dissipation or abuse, of which the disability board shall be judge, is confined in any hospital or in his home, and whether or not so confined, requires medical services, the employer shall pay for such active or retired member the necessary medical services not payable from some other source as provided for in subsection (2). In the case of active or retired fire fighters the employer may make the payments provided for in this section from the firemen's pension fund established pursuant to RCW 41.16.050 where such fund had been established prior to March 1, 1970: PROVIDED, That in the event the pension fund is depleted, the employer shall have the obligation to pay all benefits payable under chapters 41.16 and 41.18 RCW: PROVIDED FURTHER, That the disability board in all cases may have the active or retired member suffering from such sickness or disability examined at any time by a licensed physician or physicians, to be appointed by the disability board, for the purpose of ascertaining the nature and extent of the sickness or disability, the physician or physicians to report to the disability board the result of the examination within three days thereafter. Any active or retired member who refuses to submit to such examination or examinations shall forfeit all his rights to benefits under this section for the period of such refusal: AND PROVIDED FURTHER, That the disability board shall designate the medical services available to any sick or disabled member.

(2) The medical services payable under this section will be reduced by any amount received or eligible to be received by the member under workers' compensation, social security including the changes incorporated under Public Law 89-97 as now or hereafter amended, insurance provided by another employer, other pension plan, or any other similar source. Failure to apply for coverage if otherwise eligible under the provisions of Public Law 89-97 as now or hereafter amended shall not be deemed a refusal of payment of benefits thereby enabling collection of charges under the provisions of this chapter.

(3) Upon making such payments as are provided for in subsection (1), the employer shall be subrogated to all rights of the member against any third party who may be held liable for the member's injuries or for the payment of the cost of medical services in connection with a member's sickness or disability to the extent necessary to recover the amount of payments made by the employer.

(4) Any employer under this chapter, either singly, or jointly with any other such employer or employers through an association thereof as provided for in chapter 48.21 RCW, may provide for all or part of one or more plans of group hospitalization and medical aid insurance to cover any of its employees who are members of the Washington law enforcement officers' and fire fighters' retirement system, and/or retired former employees who were, before retirement, members of said retirement system, through contracts with regularly constituted insurance carriers, with health maintenance organizations as defined in chapter 48.46 RCW, or with health care service contractors as defined in chapter 48.44 RCW. Benefits payable under any such plan or plans shall be deemed to be amounts received or eligible to be received by the active or retired member under subsection (2) of this section.

(5) The spouse or the child or children, through their parent or legal guardian may elect to preserve the health care benefits that have been available to them as a dependent or dependents of the disabled member which were provided by the member's employer and were in effect as of the time of the disabling injury or diagnosis of the disabling occupational disease. This election shall be made by the spouse or children's guardian within thirty days after the date coverage would have ceased if the election had not been made. This election shall be made by the completion of a request form to be supplied by the employer, which will incorporate the commitment of the requesting person to pay the employer's share of the premium. Employers may require that the request be accompanied with the first monthly or other periodic premium payment. The continuation of benefits shall not obligate the employer to continue coverage if the requesting person fails to make the required payments on a timely basis.

The option to continue coverage under the health care benefits program of the employer shall continue:

(a) For the spouse of the disabled member, until the member is no longer disabled or dies, or until the spouse dies or is no longer married to the disabled member, whichever occurs earlier; or

(b) For the minor child or children of the disabled member, until each child reaches the age of majority, or if enrolled full time in a postsecondary educational institution or vocational training program licensed or otherwise approved by the state where located, until age twenty-two or until the program is completed, whichever occurs earlier.

Sec. 2. Section 17, chapter 209, Laws of 1969 ex. sess. as last amended by section 7, chapter 176, Laws of 1986 and RCW 41.26.160 are each amended to read as follows:

(1) In the event of the death of any member who is in active service, or who has vested under the provisions of RCW 41.26.090 with twenty or more years of service, or who is on disability leave or retired, whether for disability or service, his surviving spouse shall become entitled to receive a monthly allowance equal to fifty percent of his final average salary at the date of death if active, or the amount of retirement allowance the vested member would have received at age fifty, or the amount of the retirement allowance such retired member was receiving at the time of his death if retired for service or disability. The amount of this allowance will be increased five percent of final average salary for each child as defined in RCW 41.26.030(7), as now or hereafter amended, subject to a maximum combined allowance of sixty percent of final average salary: PROVIDED, That if the child or children is or are in the care of a legal guardian, payment of the increase attributable to each child will be made to the child's legal guardian or, in the absence of a legal guardian and if the member has created a trust for the benefit of the child or children, payment of the increase attributable to each child will be made to the trust.

(2) If at the time of the death of a vested member with twenty or more years service as provided above or a member retired for service or disability, the surviving spouse has not been lawfully married to such member for one year prior to his retirement or separation from service if a vested member, the surviving spouse shall not be eligible to receive the benefits under this section: PROVIDED, That if a member dies as a result of a disability incurred in the line of duty, then if he was married at the time he was disabled, his surviving spouse shall be eligible to receive the benefits under this section.

(3) If there be no surviving spouse eligible to receive benefits at the time of such member's death, then the child or children of such member shall receive a monthly allowance equal to thirty percent of final average salary for one child and an additional ten percent for each additional child subject to a maximum combined payment, under this subsection, of sixty percent of final average salary. When there cease to be any eligible children as defined in RCW 41.26.030(7), as now or hereafter amended, there shall be paid to the legal heirs of said member the excess, if any, of accumulated contributions of said member at the time of his death over all payments made to his survivors on his behalf under this chapter: PROVIDED, That payments under this subsection to children shall be prorated equally among the children, if more than one. If the member has created a trust for the benefit of the child or children, the payment shall be made to the trust.

(4) In the event that there is no surviving spouse eligible to receive benefits under this section, and that there be no child or children eligible to receive benefits under this section, then the accumulated contributions shall be paid to the estate of said member.

(5) If a surviving spouse receiving benefits under the provisions of this section thereafter dies and there are children as defined in RCW 41.26.030(7), as now or hereafter amended, payment to the spouse shall cease and the child or children shall receive the benefits as provided in subsection (3) ((~~above~~)) of this section.

(6) The payment provided by this section shall become due the day following the date of death and payments shall be retroactive to that date.

(7) In the event of the death of any member who is in active service, or who has vested under the provisions of RCW 41.26.090 with twenty years or more of service, or who is on disability leave or retired, whether for disability or service, the surviving spouse and child or children through their parent or legal guardian, may elect to continue any coverage they had under the health care benefit plan provided by the member's employer just prior to the death of the member.

This election shall be made by the surviving spouse or children's guardian within thirty days after coverage would have ceased if the election had not been made. This election shall be made by the completion of a request form to be supplied by the employer, which will incorporate the commitment of the requesting person to pay the employer's share of the premium. Employers may require that the request be accompanied with the first monthly or other periodic premium payment. The continuation of benefits shall not obligate the employer to continue coverage if the requesting person fails to make the required payments on a timely basis.

The option to continue coverage under the health care benefits program of the employer shall continue:

(a) For the spouse of the deceased member, until the spouse dies or is remarried, whichever is earlier; or

(b) For the minor child or children of the deceased member, until each child reaches the age of majority, or if enrolled full time in a postsecondary educational institution or vocational training program licensed or otherwise approved by the state where located, until age twenty-two or until the program is completed, whichever occurs earlier.

Sec. 3. Section 8, chapter 294, Laws of 1977 ex. sess. as last amended by section 1, chapter 88, Laws of 1989 and by section 1, chapter 191, Laws of 1989 and RCW 41.26.470 are each reenacted and amended to read as follows:

(1) A member of the retirement system who becomes totally incapacitated for continued employment by an employer as determined by the director shall be eligible to receive an allowance under the provisions of RCW 41.26.410 through 41.26.550. Such member shall receive a monthly disability allowance computed as provided for in RCW 41.26.420 and shall have such allowance actuarially reduced to reflect the difference in the number of years between age at disability and the attainment of age fifty-eight.

(2) Any member who receives an allowance under the provisions of this section shall be subject to such comprehensive medical examinations as required by the department. If such medical examinations reveal that such a member has recovered from the incapacitating disability and the member is no longer entitled to benefits under Title 51 RCW, the retirement allowance shall be canceled and the member shall be restored to duty in the same civil service rank, if any, held by the member at the time of retirement or, if unable to perform the duties of the rank, then, at the member's request, in such other like or lesser rank as may be or become open and available, the duties of which the member is then able to perform. In no event shall a member previously drawing a disability allowance be returned or be restored to duty at a salary or rate of pay less than the current salary attached to the rank or position held by the member at the date of the retirement for disability. If the department determines that the member is able to return to service, the member is entitled to notice and a hearing. Both the notice and the hearing shall comply with the requirements of chapter 34.05 RCW, the Administrative Procedure Act.

(3) Those members subject to this chapter who became disabled in the line of duty on or after July 23, 1989, and who receive benefits under RCW 41.04.500 through 41.04.530 or similar benefits under RCW 41.04.535 shall receive or continue to receive service credit subject to the following:

(a) No member may receive more than one month's service credit in a calendar month.

(b) No service credit under this section may be allowed after a member separates or is separated without leave of absence.

(d) Employee contributions shall be collected by the employer and paid to the department at the rate in effect for the period of service credited.

(e) State contributions shall be as provided in RCW 41.26.450.

(f) Contributions shall be based on the regular compensation which the member would have received had the disability not occurred.

(g) The service and compensation credit under this section shall be granted for a period not to exceed six consecutive months.

(h) Should the legislature revoke the service credit authorized under this section or repeal this section, no affected employee is entitled to receive the credit as a matter of contractual right.

(4) If the recipient of a monthly retirement allowance under this section dies before the total of the retirement allowance paid to the recipient equals the amount of the accumulated contributions at the date of retirement, then the balance shall be paid to such person or persons having an insurable interest in his or her life as the recipient has nominated by written designation duly executed and filed with the director, or, if there is no such designated person or persons still living at the time of the recipient's death, then to the surviving spouse, or, if there is neither such designated person or persons still living at the time of his or her death nor a surviving spouse, then to his or her legal representative.

(5) If a member is permanently disabled, the spouse or the child or children, through their parent or legal guardian, may elect to preserve the health care benefits that have been available to them as a dependent or dependents of the disabled member which were provided by the member's employer and were in effect at the time of the disabling injury or diagnosis of the occupational disease. This election shall be made by the surviving spouse or children's guardian within thirty days after the date coverage would have ceased if the election had not been made. This election shall be made by the completion of a request form to be supplied by the employer, which will incorporate the commitment of the requesting person to pay the employer's share of the premium. Employers may require that the request be accompanied with the first monthly or other periodic premium payment. The continuation of benefits shall not obligate the employer to continue coverage if the requesting person fails to make the required payments on a timely basis.

The option to continue coverage under the health care benefits program of the employer shall continue:

(a) For the spouse of the disabled member, until the member is no longer disabled or dies, or until the spouse dies or is no longer married to the disabled member, whichever occurs earlier; or

Sec. 4. Section 12, chapter 294, Laws of 1977 ex. sess. and RCW 41.26.510 are each amended to read as follows:

(1) If a member or a vested member who has not completed at least ten years of service dies, the amount of the accumulated contributions standing to such member's credit in the retirement system at the time of such member's death shall be paid to such person or persons having an insurable interest in such member's life as the member shall have nominated by written designation duly executed and filed with the department. If there be no such designated person or persons still living at the time of the member's death, such member's accumulated contributions standing to such member's credit in the retirement system shall be paid to the member's surviving spouse as if in fact such spouse had been nominated by written designation, or if there be no such surviving spouse, then to such member's legal representatives.

(2) If a member who is eligible for retirement or a member who has completed at least ten years of service dies, the surviving spouse or eligible child or children shall elect to receive either:

(a) A retirement allowance computed as provided for in RCW 41.26.430(1) actuarially adjusted to reflect Option 2 of RCW 41.26.460 and if the member was not eligible for normal retirement at the date of death a further reduction as described in RCW 41.26.430(2); if a surviving spouse who is receiving a retirement allowance dies leaving a child or children of the member under the age of majority, then such child or children shall continue to receive an allowance in an amount equal to that which was being received by the surviving spouse, share and share alike, until such child or children reach the age of majority; if there is no surviving spouse eligible to receive an allowance at the time of the member's death, such member's child or children under the age of majority shall receive an allowance share and share alike calculated as herein provided making the assumption that the ages of the spouse and member were equal at the time of the member's death; or

(b) The member's accumulated contributions.

(3) If a member dies, the spouse or child or children, through their parent or legal guardian, may elect to preserve the health care benefits that have been available to them as a dependent or dependents of the deceased member which were provided by the member's employer and were in effect at the time of death. This election shall be made by the surviving spouse or children's guardian within thirty days after the date coverage would have ceased if the election had not been made. This election shall be made by the completion of a request form to be supplied by the employer, which will incorporate the commitment of the requesting person to pay the employer's share of the premium. Employers may require that the request be accompanied with the first monthly or other periodic premium payment. The continuation of benefits shall not obligate the employer to continue coverage if the requesting person fails to make the required payments on a timely basis.

The option to continue coverage under the health care benefits program of the employer shall continue:

(a) For the spouse of the deceased member, until the spouse dies or is remarried, whichever is earlier; or