House rejects bill to ban disability-benefit offsets, citing cost concerns

The Utah House debated Senate Bill 157, a proposal to bar insurers from reducing disability income payouts by amounts received from other sources such as workers’ compensation or Social Security. Sponsor Representative Larson described the bill as a consumer-protection measure intended to ensure people ‘‘get what they pay for’’ and to stop surprise set-offs on mail-order or out-of-state policies.

Opponents, including insurers’ representatives and some members who declared conflicts of interest, argued the ban would force insurers to raise premiums or change policy offerings. Representative Stevens and others warned the measure could make coverage unaffordable for some households and employers and urged caution on unintended market effects. Several members requested a thorough fiscal note and said stakeholders such as teachers and state employee benefit managers should be consulted before a policy that could raise employer costs was adopted.

After extended debate, the House recorded a final vote of 31 affirmative and 38 negative, and the bill failed to pass the House. Lawmakers in favor said the bill sought to protect consumers from concealed limitations in mail-order policies; opponents said it risked higher rates for all policyholders.

What’s next: Because the bill failed in the House, its language will not move forward in this form. Sponsors and supporters signaled continued interest in consumer protections but also acknowledged the need for further study of fiscal and market impacts.