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Chapter 0040 - 572R - H Ver of HB2090
House Engrossed
ASRS; long-term
disability
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
CHAPTER 40
HOUSE BILL 2090
AN
ACT
Amending section 38-797.07, Arizona
Revised Statutes; relating to the Arizona state retirement system.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 38-797.07, Arizona Revised
Statutes, is amended to read:
START_STATUTE
38-797.07.
LTD program benefits; limitations; definitions
A. The LTD program is subject to the following
limitations:
1. Except as provided in paragraph 9 of this
subsection, monthly LTD program benefits shall not exceed two-thirds of a
member's monthly compensation, reduced by:
(a) For a member whose disability commences before
July 1, 2008, sixty-four percent of social security disability benefits
that the member and the member's dependents are eligible to receive.
(b) For a member whose disability commences on or
after July 1, 2008, eighty-five percent of social security disability
benefits that the member and the member's dependents are eligible to receive,
but not including:
(i) The amount of attorney fees approved pursuant to
social security administration rules and reasonable documented costs paid to an
attorney to secure that disability benefit.
(ii) Any cost-of-living adjustments that
are granted after the member commences benefits under this section.
(c) For a member whose disability commences before
July 1, 2008, eighty-three percent of social security retirement benefits
that the member is eligible to receive.
(d) For a member whose disability commences on or
after July 1, 2008, eighty-five percent of social security retirement
benefits that the member is eligible to receive, but not including any cost-of-living
adjustments that are granted after the member commences benefits under this
section.
(e) All of any workers' compensation benefits.
(f) All of any payments for a veteran's disability
if both of the following apply:
(i) The veteran's disability payment is for the same
condition or a condition related to the condition currently causing the
member's disability.
(ii) The veteran's disability is due to, or a result
of, service in the armed forces of the United States.
(g) All of any other benefits by reason of
employment that are financed partly or wholly by an employer, including
payments for sick leave. This subdivision does not include any
retirement benefit that is received by the member pursuant to a state
retirement system or plan other than ASRS.
(h) Fifty percent of any salary, wages, commissions
or other employment-related pay that the member receives or is entitled
to receive from any gainful employment in which the member actually engages.
2. For a member whose disability commences on or
after August 2, 2012, a member's monthly income from the monthly LTD program
benefits and sources listed in paragraph 1 of this subsection shall not exceed
one hundred percent of the member's monthly compensation at the time disability
commences.� ASRS shall offset the member's monthly LTD program benefits by the
amount necessary to reduce the member's total monthly income to meet the limit
prescribed in this paragraph.
3. Monthly LTD program benefits are not payable
until a member has had a disability for a period of six consecutive months.
4. Monthly LTD program benefits are not payable to a
member who files an initial claim for disability more than twelve months after
the date of the member's date of disability unless the member demonstrates to
ASRS good cause for not filing the initial claim within twelve months after the
date of disability.
5. Monthly LTD program benefits are not payable to a
member who is receiving retirement benefits from ASRS, unless the retirement
benefits are required pursuant to section 38-775.
6. Monthly LTD program benefits are not payable to a
member whose disability is due to, or a result of, any of the following:
(a) An intentionally self-inflicted injury.
(b) War, whether declared or not.
(c) An injury incurred while engaged in a felonious
criminal act or enterprise.
(d) For a member whose most recent membership in the
LTD program commences before July 1, 2008, an injury or sickness for which the
member received medical treatment within three months before the date of the
member's coverage under the LTD program. This subdivision does not
apply to a member who either:
(i) Has been an active member of an employer for
twelve continuous months.
(ii) Is employed by an employer before July 1, 1988.
(e) For a member whose most recent membership in the
LTD program commences on or after July 1, 2008, an injury or sickness for which
the member received medical treatment within six months before the date of the
member's coverage under the LTD program.� This subdivision does not apply to a
member who has been an active member of an employer for twelve continuous
months.
7. Monthly LTD program benefits cease to be payable
to a member at the earliest of the following:
(a) The date the member ceases to have a disability.
(b) The date the member:
(i) Ceases to be under the direct care of a doctor.
(ii) Refuses to undergo any medical examination or
refuses to participate in any work rehabilitation program for which the member
is reasonably qualified by education, training or experience and that is
requested by the insurance company or claims administrator that is selected by
the board to administer the LTD program.
(c) The date the member withdraws employee
contributions with interest and ceases to be a member.
(d) The later of the following:
(i) The member's normal retirement date.
(ii) The month following sixty months of payments if
disability occurs before sixty-five years of age.
(iii) The month following attainment of seventy
years of age if disability occurs at sixty-five years of age or after but
before sixty-nine years of age.
(iv) The month following twelve months of payments
if disability occurs at or after sixty-nine years of age.
(e) If the member is convicted of a criminal offense
and sentenced to more than six months in a jail, prison or other penal
institution, the first day of the month following the first thirty continuous
days of the member's confinement for the remainder of the confinement.
8. Monthly LTD program benefits are payable only for
disabilities that commence on or after July 1, 1988.
9. Except as provided in paragraph 2 of this
subsection, the minimum benefit for a member who is entitled to receive monthly
LTD program benefits is $50 per month.
10. Members are eligible to receive the LTD program
benefits and payments described in paragraph 1 of this subsection, and the
reductions provided by paragraph 1 of this subsection apply even though the
social security benefits are not actually paid as follows:
(a) For primary and dependent social security
benefits, the members are eligible for the social security benefits until the
social security benefits are actually awarded, or if the social security
benefits are denied, until the member pursues the social security appeal
process through a hearing before a social security administrative law judge or
until the insurance company or claims administrator determines that the member
is not eligible for social security benefits.
(b) For benefits and payments from any other source
provided in paragraph 1 of this subsection, the members are eligible for the
benefits if it is reasonable to believe that those benefits will be paid on
proper completion of the claim or would have been paid except for the failure
of the member to pursue the claim in time.
11. A member shall be considered to have a
disability if based on objective medical evidence:
(a) During the first thirty months of a period of
disability, the member is unable to perform one or more duties of the
occupation held by the member with an employer when the member developed a
disability.
(b) For a member who has received monthly LTD
program benefits for
a total of
twenty-four months
within a five-year period
, the member is unable to perform
any work for compensation or gain for which the member is reasonably qualified
by education, training or experience in an amount at least equal to the
scheduled LTD program benefits prescribed in paragraph 1 of this subsection.
B. A member who is eligible pursuant to article 2 of
this chapter and who receives monthly LTD program benefits is entitled to
receive service credit pursuant to article 2 of this chapter from the time
disability commences until LTD program benefits cease to be payable, except
that for a member who receives monthly LTD program benefits on or after June
30, 1999, the number of years of service credited to the member's retirement
account during the period ASRS disburses LTD program benefit payments shall not
cause the member's total credited service for retirement benefits to exceed the
greater of thirty years or the total years of service credited to the member's
retirement account on the commencement of disability.
C. This section does not prohibit a member whose
disability has been established to the satisfaction of the board from relying
on treatment by prayer through spiritual means in accordance with the tenets
and practice of a recognized church, religious denomination or Native American
traditional medicine by a duly accredited practitioner of the church,
denomination or Native American traditional medicine without suffering
reduction or suspension of the member's monthly LTD program benefits.
D. ASRS may suspend or terminate benefits under this
article if a member fails to provide information, data, paperwork or other
materials that are requested by ASRS or the insurance company or claims
administrator that is selected by the board to administer the LTD program.�
ASRS or its contracted administrator may investigate information that indicates
a member may have falsified information or records related to LTD program
eligibility or benefits or may not otherwise meet the requirements of LTD
program eligibility. In connection with an investigation involving
the LTD program, ASRS or its contracted administrator may collect and examine
any statement or evidence, or may authorize a third party to collect and
examine any statement or evidence, that relates to a member falsifying
information or records related to LTD program eligibility or
benefits. If the member provides the information requested, ASRS
shall retroactively reinstate the benefits or claim for which the member qualifies
under this article.
E. For the purposes of this section:
1. "Objective medical evidence" means
evidence that established facts and conditions, as perceived without distortion
by personal feelings, prejudices or interpretations, and includes x-rays,
quantitative tests, laboratory findings, data, records, reports from the
attending physician and reports from a consulting physician, as applicable.
2. "Received medical treatment" means that
the member consulted with or received the advice of a licensed medical or
dental practitioner, including advice given during a routine examination, and
it includes situations in which the member received medical or dental care,
treatment or services, including the taking of drugs, medication, insulin or
similar substances.
3. "Social security" and "social
security disability" includes the railroad retirement act of 1974 (P.L. 93-445;
88 Stat. 1305; 45 United States Code sections 231 through 231v).
END_STATUTE
APPROVED BY THE GOVERNOR APRIL 13, 2026.
FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 13, 2026.