Topic:
DISABILITY INSURANCE; EMPLOYEE BENEFIT PLANS;
Location:
INSURANCE;

OLR Research Report


January 10, 2001

 

2001-R-0050

TEMPORARY DISABILITY BENEFIT PROGRAMS

By: Lynn Marx, Research Attorney

You asked about the temporary disability benefits that certain states provide for individuals who are accidentally injured or incur an illness that is not related to their employment.

SUMMARY

Five states and Puerto Rico mandate that employers provide temporary disability benefits for their employees. Temporary disability benefits provide partial wage replacement to employees who are temporarily disabled for non-work related reasons, including pregnancy and childbirth.

Rhode Island was the first state to pass a temporary disability law. Most of the states and Puerto Rico do not require coverage for government workers. Most states and Puerto Rico allow employers to obtain alternative insurance plans.

In general, all the states and Puerto Rico define disability in terms of the inability of an individual to perform regular or customary work because of the individual's physical or mental condition. Two of the programs do not require employer contributions. All of the programs provide benefits for at least 26 weeks and all have a 7-day waiting period.

All of the programs cover most pregnancy related disabilities.

PROGRAM COVERAGE

Table 1 shows the year the states and Puerto enacted their temporary disability benefit programs, the employers and employees covered, the qualifying wages or employment necessary to be covered by the program, and the types of plans available.

Table 1: Year of Enactment, Employers and Employees Covered, Qualifying Wages or Employment, and Types of Plans

State-Commonwealth

Year Enacted

Employers-Employees Covered

Qualifying Wages or Employment

Types of Plans

California

1946

Most private

Must have earned $300 during previous 12-month base period

Private and state plans (private plan has to be better than state)

Hawaii

1969

Most private and state

In covered employment at least 14 weeks (at least 20 hrs/week) + earned at least $400 during previous 52 weeks

Private plans, self-insurance, or collective bargaining agreement

New Jersey

1948

Most private and certain state educational institutes; some government entities may elect coverage

20 base weeks of employment in which wages are 20% of statewide weekly wage

Private and state

New York

1949

Most private

4 consecutive weeks of employment or unemployed <4 weeks

Private, state, and self-insurance

Puerto Rico

1968

Most private and state entities operating as private enterprises

$150 in base period

Private and state

Rhode Island

1942

Most private; state and local entities exempt but may elect coverage

200 x min. hourly wage in 1 qtr. and, base period, wages of 1- x highest quarter (base period wages must be at least 400 x min. hourly wage) or 400 x min. hourly wage

State plan only

BENEFITS

Table 2 shows how the state programs are funded, the weekly benefit amount and duration, and the waiting-period requirements.

Table 2: Funding Mechanism, Weekly Benefit Amount, Benefit Length, and Waiting Period

State-Commonwealth

Funding Mechanism

Weekly Benefit Amount

Benefit Length

Waiting Period

California

Employee only: 0.9% of first $46,327 annual earnings

Two-thirds of gross wages, up to a maximum of $490 /week; if gross wages < $189/week, % of gross wages is > two-thirds

Up to 52 weeks

7 days

Hawaii

Employer may share cost w/ workers; can't charge worker > half the premium or > 0.5% of weekly taxable wages

58% of average weekly wage, maximum $372 (2000)

Up to 26 weeks

7 days

New Jersey

Employee pays 0.5% of first $21,200; capped at 80.53/year; Employer pay varies according to claims experience

Two-thirds of a worker's weekly wages, up to a maximum of $401 (2000)

Up to 26 weeks

7 days (compensable after benefits have been paid for 3 consecutive weeks)

New York

Employer may share cost with worker; worker contribution 0.5% earnings; capped at $.60/week

50% of average weekly wage, maximum $170 a week

Up to 26 weeks

7 days

Puerto Rico

Employers and employees pay

0.5% of the worker's wages up to $9,000

Same as unemployment (by schedule), except maternity which is 100% of wages

Up to 26 weeks

7 days (unless, if hospitalized)

Rhode Island

Employee only: 1.4% of first $40,600

4.62% of total wages in highest quarter (maximum $504) plus dependence allowance

Up to 30 weeks

7 days (compensable if disability lasts > 28 days)

PREGNANCY

All of the state programs allow pregnancy-related disabilities. Puerto Rico allows all pregnancy-related disabilities except those arising from an abortion that is not induced for medical reasons. Usually pregnancy is payable 4 to 6 weeks before the baby is due and 6 to 8 weeks after delivery.

LM:ts