Senate Bill 1148 would prohibit an insurer that offers or renews a disability income policy from requiring a person eligible for benefits to apply for or use benefits available under Paid Leave Oregon before the person is eligible for disability benefits offered by the insurer.

Senator Kathleen Taylor told the committee the bill "prohibits employers and disability providers from requiring the use or application of other benefits before short-term disability eligibility," noting the measure passed the Senate with recorded support. She and union witnesses said the bill closes a perceived loophole that can force workers to exhaust job-protected paid leave rather than use a voluntary short-term disability product they purchased through payroll deductions.

A representative of a statewide union (testimony recorded by the committee as an AFSCME representative) described scenarios in which a worker paying into a third-party short-term disability plan is told to apply for Paid Leave Oregon first, which can deplete leave banks needed later in a year for family or other events. The union witness testified the bill would remove an administrative barrier and reduce unnecessary processing of Paid Leave Oregon claims when an insurer is the appropriate primary payer.

Committee members asked whether employees can "stack" short-term disability and Paid Leave Oregon benefits. Saravia Tarepali of the Oregon Employment Department told the committee that stacking or taking both sequentially is possible — "You can take paid leave, and then you can take your short-term disability. You can stack, or you can take your short-term disability, and then you can take your paid leave." She clarified that Paid Leave Oregon provides job protection in many cases, while short-term disability (a voluntary, employer-offered insurance product) does not carry the same job protection.

No committee vote occurred at the hearing. Committee staff described the bill as having a minimal fiscal impact and no revenue impact; sponsors and witnesses emphasized the bill's aim to protect workers' ability to use privately purchased benefits without being forced to exhaust Paid Leave Oregon first.