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Committee hears competing views on short‑term disability, Paid Leave Oregon overlap; insurers warn of higher premiums
Summary
Senate Bill 11 48 would prevent insurers from requiring employees to apply for Paid Leave Oregon before receiving employer‑provided short‑term disability benefits and would change how benefits are offset or paid concurrently.
Senate Bill 11 48 — a bill about the interaction of employer‑provided short‑term disability (STD) insurance and Paid Leave Oregon benefits — prompted detailed testimony and competing policy proposals at the Senate Committee on Labor and Business on April 1.
The measure, as explained by committee staff, would specify that an insurer issuing or renewing a disability income insurance policy may not require a person eligible for benefits to use Paid Leave Oregon benefits before being eligible for disability benefits under the insurer’s policy; the provision would apply to policies issued, offered or renewed on or after Jan. 1, 2026.
Labor witnesses — including Katie Tyson of the Oregon AFL‑CIO and Odalys Aguilar of Oregon AFSCME — said the bill fixes problems workers have experienced when insurers require employees to apply first for Paid Leave Oregon or when STD payouts are offset by hypothetical Paid Leave Oregon benefits a worker does not actually receive. Tyson said that process can delay access to an employee’s paid STD benefits and can burden the Paid Leave Oregon system. Aguilar said state workers who pay premiums for voluntary STD plans have been told they must exhaust other leave before receiving benefits, and that the bill would protect workers who buy supplemental coverage.
Standard Insurance, one of Oregon’s largest headquartered insurers, told the committee it would oppose a contemplated amendment (described to the committee but not yet posted) if the amendment forbids offsets and effectively requires insurers to duplicate Paid Leave Oregon benefits. Ryan Cifo, director of government regulatory affairs for The Standard, said requiring duplication of Paid Leave Oregon benefits could raise STD premiums by more than 400 percent, risk employer offerings of the product, and create unintended stacking that would lengthen leave beyond what employers can manage. He said no other state has implemented the contemplated approach and urged caution.
Paloma Sparks of Oregon Business and Industry said employers commonly offer STD as a voluntary supplemental benefit and that requiring duplication of Paid Leave Oregon would likely prompt employers to stop offering the coverage. Sparks and The Standard urged exploring alternative solutions that keep STD as a supplemental product rather than require duplicate coverage.
Labor witnesses countered that workers have paid premiums for a product they cannot practically use because of ordering and offset practices, and they urged the committee to allow workers to choose whether to use Paid Leave Oregon concurrently with STD for their own medical leave and, if so, to allow concurrent payment with STD topping to restore a worker’s full wage replacement where desired.
Committee members discussed the complexity of drafting an amendment that preserves voluntary STD products and employer participation while protecting employees who pay into them. The amendment was not posted during the hearing; committee members carried the public hearing and work session for SB 11 48 to April 3 to continue negotiations.
