H*3945(Rat #0175, Act #0092 of 1997)  General Bill, By Young-Brickell, Bailey, 
Barrett, H. Brown, Cato, Chellis, Hamilton, Harrell, Harrison, Haskins, Hinson, 
Keegan, M.H. Kinon, Law, Littlejohn, Meacham, Sandifer, Seithel, Sharpe, 
Sheheen, Witherspoon and Woodrum

Similar(S 46)
 A BILL TO AMEND SECTION 38-73-500, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA,
 1976, RELATING TO THE MERIT RATING SYSTEM FOR WORKERS' COMPENSATION INSURANCE,
 SO AS TO REQUIRE THE INCLUSION OF A CREDIT OF AT LEAST FIVE PERCENT FOR AN
 INSURED WHO PARTICIPATES IN A PROGRAM DESIGNED TO PREVENT THE USE OF DRUGS ON
 THE JOB BY EMPLOYEES OF THE INSURED, PROVIDE FURTHER FOR THE CREDIT TO BE
 ACTUARIALLY SOUND, PROVIDE FOR THE DIRECTOR OF THE DEPARTMENT OF INSURANCE TO
 ALLOW AND ORDER A CREDIT LESS THAN FIVE PERCENT WHEN THE CREDIT IS DETERMINED
 NOT TO BE ACTUARIALLY SOUND, PROVIDE FOR THE PROMULGATION OF CERTAIN
 REGULATIONS AND THE CERTIFICATION OF AN EMPLOYER DRUG PREVENTION PROGRAM, AND
 PROVIDE FOR RANDOM TESTING PROCEDURES; TO ADD SECTION 41-1-15 SO AS TO PROVIDE
 FOR WORKPLACE PROCEDURES DESIGNED TO PREVENT DRUGS ON THE JOB; AND PROVIDE
 THAT WORKER'S COMPENSATION POLICIES ISSUED OR RENEWED AND AFTER OCTOBER 1,
 1997, SHALL BE GRANTED PREMIUM REDUCTION OF NOT LESS THAN FIVE
 PERCENT.-AMENDED TITLE

   04/10/97  House  Introduced and read first time HJ-79
   04/10/97  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-79
   05/01/97  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry HJ-2
   05/07/97  House  Amended HJ-54
   05/07/97  House  Read second time HJ-57
   05/07/97  House  Roll call Yeas-96  Nays-0 HJ-57
   05/08/97  House  Read third time and sent to Senate HJ-11
   05/08/97  Senate Introduced, read first time, placed on calendar
                     without reference SJ-4
   05/21/97  Senate Amended SJ-39
   05/21/97  Senate Read second time SJ-39
   05/21/97  Senate Ordered to third reading with notice of
                     amendments SJ-39
   05/22/97  Senate Read third time and returned to House with
                     amendments SJ-28
   05/29/97  House  Senate amendment amended HJ-34
   05/29/97  House  Returned to Senate with amendments HJ-34
   05/29/97  Senate Concurred in House amendment and enrolled SJ-44
   06/04/97         Ratified R 175
   06/10/97         Signed By Governor
   06/10/97         Effective date 06/10/97, unless otherwise specified
   06/24/97         Copies available
   06/24/97         Act No. 92

AN ACT TO AMEND SECTION 38-73-500, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE MERIT RATING SYSTEM FOR WORKERS' COMPENSATION INSURANCE, SO AS TO REQUIRE THE INCLUSION OF A CREDIT OF AT LEAST FIVE PERCENT FOR AN INSURED WHO PARTICIPATES IN A PROGRAM DESIGNED TO PREVENT THE USE OF DRUGS ON THE JOB BY EMPLOYEES OF THE INSURED, PROVIDE FURTHER FOR THE CREDIT TO BE ACTUARIALLY SOUND, PROVIDE FOR THE DIRECTOR OF THE DEPARTMENT OF INSURANCE TO ALLOW AND ORDER A CREDIT LESS THAN FIVE PERCENT WHEN THE CREDIT IS DETERMINED NOT TO BE ACTUARIALLY SOUND, PROVIDE FOR THE PROMULGATION OF CERTAIN REGULATIONS AND THE CERTIFICATION OF AN EMPLOYER DRUG PREVENTION PROGRAM, AND PROVIDE FOR RANDOM TESTING PROCEDURES; TO ADD SECTION 41-1-15, SO AS TO PROVIDE FOR WORKPLACE PROCEDURES DESIGNED TO PREVENT DRUGS ON THE JOB; AND PROVIDE THAT WORKERS' COMPENSATION POLICIES ISSUED OR RENEWED ON AND AFTER OCTOBER 1, 1997, SHALL BE GRANTED PREMIUM REDUCTION OF NOT LESS THAN FIVE PERCENT.

Whereas, the members of the General Assembly recognize the importance of all employers and employees in the State to maintain and operate in a drug-free workplace, and promote the participation of businesses in drug prevention programs. Through such participation, employers have the opportunity to maximize their levels of productivity, enhance their competitive positions in the marketplace, and reach their desired levels of success without experiencing the costs, delays, and tragedies associated with work related accidents resulting from substance abuse by employees; and

Whereas, nationally, the cost of substance abuse in the workplace is estimated at a staggering one hundred billion annually, and this cost is paid by employers in many different ways; and

Whereas, the intention of the act is to provide incentive for employers to prevent drug use and the tragedies associated with work related accidents and to deter the corresponding losses in the form of workers' compensation claims, personnel, and economic productivity; and

Whereas, since workers' compensation insurers typically provide support services to employer-clients, the General Assembly believes that insurers will compete for the business of employers participating in drug prevention programs and will provide the appropriate premium credit for various classes of employment with a successful program due to the administrative cost savings in many ways including those from a reduction in work related accidents by employees with substance abuse and litigation expenses;

Be it enacted by the General Assembly of the State of South Carolina:

Credit for employee drug and alcohol prevention programs

SECTION 1. Section 38-73-500 of the 1976 Code, as last amended by Section 783 of Act 181 of 1993, is further amended to read:

"Section 38-73-500. (A) For the purpose of uniformity and equality the director or his designee shall approve a system of merit rating for use in the writing of workers' compensation insurance. No system of merit rating except the one so approved may be used.

(B) This system of merit rating shall include a credit of at least five percent for an insured who participates in a program designed to prevent the use of drugs or alcoholic beverages on the job by employees of the insured. The credit must be actuarially sound and filed with the director or his designee. However, if the director determines that a credit of at least five percent is not actuarially sound, the director shall allow and order a credit of less than five percent which is actuarially sound. The director or his designee shall provide for certification of an employer drug prevention program and shall promulgate regulations for the implementation of this subsection including, but not limited to, the establishment of guidelines or a plan defining a qualified employer drug prevention program eligible for the credit which shall be used by the insurer unless the insurer has established its own guidelines or plan. In the establishment of guidelines or a plan by the director or insurer concerning a qualified drug prevention program eligible for the credit, the guidelines or plan shall include the policy statement and employee notification requirement pursuant to Section 41-1-15.

(C) The testing procedure established by the insurer, employer, or his designee, or, approved by the director, must include a provision for random sampling of all persons who receive wages and compensation in any form from the employer and must provide for a second test to be administered within thirty minutes of the administration of the first test. Positive test results must be provided in writing to the employee within twenty-four hours of the time the employer receives the test results. Each employer must keep records of each test for up to one year."

Drug prevention program in workplace authorized

SECTION 2. The 1976 Code is amended by adding:

"Section 41-1-15. (A) Notwithstanding any other provision of the law, an employer may establish a drug prevention program in the workplace pursuant to Section 38-73-500(B) which shall include:

(1) a substance abuse policy statement that balances the employer's respect for individuals with the need to maintain a safe, productive, and drug-free environment. The intent of the policy shall be to help those who need it while sending a clear message that the illegal use of nonprescription controlled substances or the abuse of alcoholic beverages is incompatible with employment at the specified workplace; and

(2) notification to all employees of the drug prevention program and its policies at the time the program is established by the employer or at the time of hiring the employee, whichever is earlier.

(B) All information, interviews, reports, statements, memoranda, and test results, written or otherwise, received by the employer through a substance abuse testing program are confidential communications, but may be used or received in evidence, obtained in discovery, or disclosed in any civil or administrative proceeding.

(C) Employers, laboratories, medical review officers, insurers, drug or alcohol rehabilitation programs, and employer drug prevention programs, and their agents who receive or have access to information concerning test results shall keep all information confidential. Release of such information under any other circumstance shall be solely pursuant to a written consent form signed voluntarily by the employee tested or his designee unless the release is completed through disclosure by an agency of the State in a civil or administrative proceeding, order of a court of competent jurisdiction, or determination of a professional or occupational licensing board in a related disciplinary proceeding. The consent form must contain at a minimum:

(1) the name of the person who is authorized to obtain the information;

(2) the purpose of the disclosure;

(3) the precise information to be disclosed;

(4) the duration of the consent; and

(5) the signature of the person authorizing release of the information.

(D) Information on test results shall not be released for or used or admissible in any criminal proceeding against the employee."

Reduction in premium

SECTION 3. For each policy of workers' compensation insurance issued or renewed in the State on and after October 1, 1997, there shall be granted by the insurer a reduction in premium of not less than five percent pursuant to Section 38-73-500 as contained and amended in Section 1 of the act.

Time effective

SECTION 4. This act takes effect upon approval by the Governor unless otherwise specified.

Approved the 10th day of June, 1997.