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State disability insurance: What is it & are you covered?

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In addition to private individual and group disability insurance plans, you may also be covered by a state disability insurance plan offered in one of five states. These states require employers to provide disability benefits coverage to employees for off-the-job injury or illness.

Employers can obtain disability insurance coverage for their employees through an insurance carrier authorized by the state department overseeing the program. States also offer the option for employers to self-insure their employee disability benefits.

State-provided short-term disability insurance is available in the following U.S. states:

Read on to learn more.

California disability insurance

The California State Disability Insurance (SDI) program provides short-term disability insurance and paid family leave to eligible workers. SDI contributions are paid by California workers through employee payroll deductions.

California’s disability coverage offers a weekly benefit amount is about 60 to 70 percent (depending on income) of wages earned five to 18 months before your claim start date.

If you earn less than $928.99 in a quarter, your weekly benefit amount will be $50. If your quarterly earnings are between $929 and $5,385.37, your weekly benefit amount will be 70 percent of your earnings. If you earn more than $5,385.37 in a quarter, your benefit amount will be 60 percent of your pre-disability earnings.

There is a maximum weekly benefit of $1,252 for up to one year. To qualify for the maximum weekly benefit amount, you must earn at least $27,126.67 in a calendar quarter during the base period.

To be eligible for benefits under California’s program, you must be employed or looking for work at the time your injury or illness occurs. In addition, your injury must render you unable to perform your normal job tasks for eight consecutive days and have caused a loss of income.

Recipients must also have earned a minimum of $300 and had deductions taken out of their paycheck during the claims base period. Finally, the state also stipulates that benefits recipients be under the care of a licensed physician or practitioner.

Injured workers are ineligible for the state’s disability insurance if:

  • They have not experienced a loss in wages.
  • They are receiving unemployment insurance or paid family leave.
  • They became disabled while committing a crime or during incarceration.

Additional provisions of the California state disability insurance program include:

  • There is a seven-day waiting period from the time you are disabled until when you receive benefits.
  • Claims cannot be submitted earlier than the ninth day from the date disability begins. They must be submitted no later than 49 days after disability begins or the claim is considered to be a late claim and you may lose benefits.
  • Workers' compensation payments you receive must be less than disability insurance benefits.
  • You cannot collect disability and unemployment benefits at the same time.
  • You can collect state disability benefits and Social Security disability simultaneously. However, your Social Security benefits may reduce the amount you receive from the state’s program.
  • You must undergo an independent medical examination when requested to do so.

You may be eligible for PFL to care for a seriously ill family member or to bond with a new child. If so, you can receive partial benefits for up to six weeks. Benefit amounts and benefit periods are the same as for disability coverage.

Learn More: California State Disability Insurance

Hawaii disability insurance

If you’re a worker in Hawaii, you are likely covered under the Hawaii Temporary Disability Insurance (TDI) law. Enacted in 1969, the law requires employers to provide partial wage replacement insurance coverage to their eligible employees for non-work injuries or illnesses, including pregnancy.

The maximum TDI benefits provided by the law equal 58 percent of the employee’s average weekly wages up to a cap of around $620 weekly. Benefits are paid up to a maximum of 26 weeks. There is a seven-day waiting period before benefits begin.

To be eligible, an employee must have at least 14 weeks of employment in the state in the year prior to becoming disabled. The employee must have worked at least 20 hours and earned at least $400 each week. The 14 weeks need not be consecutive nor with only one employer.

The employee must also be in current employment to be eligible. This means the covered employee was employed immediately before the date the injury or illness was suffered. If the employee was separated from the job, the disability must have occurred within two weeks from their last day of work.

Workers must also be under a physician’s care at the time of disability, and the injury or illness must be certified by a licensed doctor.

Examples of employees not covered by the Hawaii state insurance program include:

  • Federal government workers
  • Certain domestic workers
  • Insurance agents and real estate salespeople paid solely on commission
  • Newspaper carriers under the age of 18
  • Family employees
  • Student nurses and hospital interns

Workers are also ineligible for the state’s disability program if:

  • You perform work for pay during your period of disability.
  • You were denied unemployment insurance benefits because of a work stoppage caused by a labor dispute.
  • Your injury was willful, intentional, or the result of committing a crime.
  • You are receiving or will receive unemployment insurance, workers' compensation, or federal disability benefits.
  • You knowingly made a false statement or failed to disclose information in order to obtain benefits.
  • You filed your claim beyond 90 days from the commencement of your disability period with no valid reason.

Hawaii also offers subrogation rights. This is for situations in which it’s unclear whether an injury or illness was caused by a work-related incident.

If you filed a workers’ compensation claim and it is being denied or controverted, you can then file a TDI claim, and your employer or the insurance carrier must pay the TDI benefits first provided you meet the eligibility requirements for TDI benefits. If you are later awarded workers’ compensation benefits for the same disability, your employer or the TDI insurance carrier has the right to be paid back the amount of TDI benefits that were paid to you. This amount can be taken from your workers’ compensation benefits.

New Jersey disability insurance

Under New Jersey’s state disability insurance, you can receive benefits equaling two-thirds of your average weekly wage. The maximum weekly benefit is $650. There is a seven-day waiting period before benefits begin.

To qualify for benefits, you need to have paid into the program through your employment and meet minimum gross earnings requirements. These requirements may change year to year.

The program considers your earnings for the five completed quarters prior to the week your disability began. The first four quarters are called the base year. To qualify for TDI in New Jersey, you must have worked 20 weeks earning at least $172 weekly or have a combined total of $8,600 during the four-quarter base year.

The wages earned during your base year will determine the amount of weekly benefits you may receive, and the total amount you can receive throughout the life of a claim.

Workers and employers contribute to the temporary disability program. Employees contribute through deductions from their paychecks. In 2019, workers contributed 0.17 percent on the first $34,400 in taxable wages, up to a maximum of $58.48.

Any New Jersey worker who contributes to the state plan for TDI, or to an employer’s approved private plan, and meets the minimum gross earnings requirements, may be eligible. You may be eligible if you work in New Jersey but live in another state.

If you are covered by a private disability insurance plan, you cannot be paid state plan benefits.

You have 30 days from the first day of your disability to file your application. If your application is received more than 30 days from the first day of your disability, you must provide a reason why the claim was not filed on time. Benefits may be reduced or denied for late applications.

New York disability insurance

New York state disability benefits are paid to eligible wage earners disabled by an off-the-job injury or illness. The state’s Disability Benefits Law will replace part of the wages lost due to disability, provided it did not occur on the job. Benefits are also paid to an unemployed worker to replace unemployment insurance benefits lost because of illness or injury.

The current benefits are 50 percent of a claimant's average weekly wage, but no more than the maximum benefit allowed, currently $170 per week. Benefits are paid for a maximum of 26 weeks, following a seven-day waiting period.

Employers pay into the program and are allowed to require employees to contribute as well. An employee’s contribution cannot exceed 60 cents a week.

Workers who become disabled because of pregnancy can collect benefits if the condition is certified by a physician or nurse-midwife. Employees can also collect benefits while on maternity leave if they become disabled within four weeks of the last day worked before going on leave.

The following types of workers are ineligible for the state’s disability benefits:

  • A minor child of the employer.
  • Employees who are doing any work for pay or profit, even if working from home.
  • Government, railroad, maritime, or farm laborers.
  • Ministers, priests, rabbis, members of religious orders, sextons, Christian Science readers.
  • Individuals that volunteer their services for nonprofit organizations and receive no compensation.
  • An executive officer of an incorporated religious, charitable or educational institution, and persons engaged in a professional or teaching capacity in or for a religious, charitable, or educational institution (Section 501(c)(3) under the IRS tax code), and persons receiving rehabilitation services in a sheltered workshop operated by such institutions under a certificate issued by the U.S. Department of Labor.
  • Persons receiving aid from a religious or charitable institution, who perform work in return for such aid.
  • One or two corporate officers who either singly or jointly own all of the stock and hold all of the offices of a corporation that employs no other employees.
  • Golf caddies.
  • Daytime students in elementary or secondary school, who work part-time during the school year or their regular vacation period.
  • Employees who change to jobs in exempt employment or with a "non-covered" employer, and work in such employment for more than four weeks, lose protection until they work four consecutive weeks for a "covered" employer.

Rhode Island disability insurance

The Rhode Island temporary disability insurance (TDI) program was enacted in 1942.

Weekly benefits equal 4.62 percent of the wages you earned in the highest quarter of your base period. The base period is the period of time used to determine if you have sufficient wages to be eligible. It is the first four of the last five completed calendar quarters before the starting date of a new claim.

Employees on disability receive a minimum of $98 and a maximum of $867. Employees can collect partial TDI if their disability enables them to work part-time but limits them from returning to full-time work.

Rhode Island’s program also offers a dependency allowance for disabled workers who have children under 18. The dependency allowance is limited to five dependents and is equal to the greater of $10 or 7 percent of the benefit rate.

The duration of a claim is equal to 36 percent of the total base period wages divided by the employee’s benefit rate. The maximum period is 30 weeks. These weeks can be claimed any time you are medically certified as being unable to perform your work duties for a minimum of seven consecutive days.

The program is funded entirely by employee payroll deductions. The withholding rate as of January 1, 2019, is 1.1 percent of an employee’s first $71,000 in earnings.

A disability claim must be filed within 90 days of the first week the employee missed work.

Rhode Island also offers temporary caregiver insurance (TCI). It provides up to four weeks of caregiver benefits to care for a seriously ill child, spouse, domestic partner, parent, parent-in-law, or grandparent. It also gives benefits for parents to bond with a newborn, adopted child, or foster-care child.

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

— Published September 4, 2019
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