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When employees become disabled and unable to work, their jobs might be protected, but they’re often left with no replacement income. To help individuals in this situation, five states provide, or require that employers provide, short-term disability insurance to eligible workers. This benefit pays a percentage of an eligible employee’s income in the event that the employee becomes disabled as a result of an off-the-job injury or illness, including disability due to pregnancy. As this temporary disability insurance covers non-work related injuries, illnesses, or disabilities, it is different than workers’ compensation.
In this article, we’ll look at three of the states with mandatory disability insurance, including New York, and their requirements for eligibility, coverage, and filing for benefits.
California
In order to be eligible for benefits, individuals in California must be employed or actively looking for work at the time they become disabled, and they must be unable to do their regular or customary work for at least eight consecutive days. If employed, they must have lost wages because of the disability and have earned at least $300 from which deductions were withheld during a previous period.
To receive benefits, individuals must complete and submit a claim form within 49 days of the date they became disabled. Filing can be done online or by mail. Medical certification by a physician or accredited practitioner is required.
Those who qualify for benefits will receive weekly compensation of about 55% of their previous weekly earnings in the highest quarter of the base period. They may collect up to 52 weeks of benefits, generally.
The withholding rate for 2016 is 0.9 percent per pay period, and the maximum to withhold for each employee is $960.68 per year. California allows employers to have a private plan in place of the state plan, but either way employers in the state are required to display specific informational posters about the program.
More information on California’s disability insurance program is available on the state website here.
New Jersey
To be eligible for benefits in New Jersey, employees must have been unable to work for seven days and have 1) worked at least 20 weeks, earning $168 or more in each of those weeks unless there was a declared state of emergency preventing work or 2) earned $8,400 or more in the 52 calendar weeks preceding the week the disability began.
Employees should apply for benefits within 30 days. The application must be completed by the employee, their physician, and their employers from the last six months. Eligible employees can receive benefits for up to 26 weeks with a maximum weekly payment of $615. Employees contribute 0.20% on the first $32,600 they earn, up to a maximum of $65.20 per year.
Eligible employees can receive benefits for up to 26 weeks with a maximum weekly payment of $615. Employees contribute 0.20% on the first $32,600 they earn, up to a maximum of $65.20 per year.
The cost for employers varies from 0.10% to 0.75%. In 2016 employers will contribute between $32.60 and $244.50 on the first $32,600 each employee earns. Employers may use the state plan or a private plan.
More information on New Jersey’s disability insurance program is available on the state website here.
New York
To be eligible in New York, an individual must have worked for a covered employer for at least four weeks and be unable to work due to disability for at least seven days. Benefit rights begin the eighth consecutive day of disability and last for up to 26 weeks during a 52-week period.
The insurance pays up to 50% of an employee’s average weekly wages, but no more than $170 per week. To receive benefits, eligible employees need to apply within 30 days. Certification from a physician or practitioner is required.
Employers can pay for all or some of the plan, or self-insure, but employees can be charged no more than 0.5% of their income each week, up to a maximum of 60 cents per week.
More information on New York’s disability insurance program is available on the state website here.
GTM’s licensed in-house insurance brokerage can provide businesses with disability insurance in these states and more.
Contact us at (518) 373-4111 to learn more, or get a free workers’ comp/disability insurance quote here.
