What You Need to Know About Short-Term vs. Long-Term Disability Insurance in California
Most injured or ill individuals may be eligible for short-term disability insurance from the state of California, but only certain employees of the state may receive long-term disability insurance. Here’s everything you need to know about short-term vs long-term disability insurance in California.
California offers short-term disability insurance for certain individuals who are injured or ill. Long-term benefits from the state are only offered for Excluded Employees of the State. However, there are other options.
What is Disability Insurance in California?
Disability is an illness or injury, either physical or mental, which prevents someone from performing their regular and customary work. Disability also includes elective surgery, pregnancy, childbirth, or other related medical conditions.
The Employment and Development Department (EDD) manages the State Disability Insurance (SDI) programs for the State of California. SDI includes Disability Insurance (DI). The SDI provides only short-term DI wage replacement benefits to eligible workers who need time off work. It should be noted that DI does not provide job protection, only monetary benefits. Although work-related disabilities are covered by workers’ compensation laws, DI benefits may also be paid for work-related illness or injuries under certain circumstances.
Related: California Workers’ Compensation Laws
If eligible, one may receive about 60 to 70 percent (depending on income) of wages earned 5 to 18 months before their claim date. Paid benefits last only for 1 year.
Eligibility for Short-Term DI From California
In order to be eligible for short-term DI from the State of California, an individual must meet all of the following:
- They must be unable to work due to non-work-related illness or injury, pregnancy, or childbirth.
- They must be unable to do their regular or customary work for at least 8 days,
- They must have lost wages because of their disability.
- They must be employed or actively looking for work at the time their disability begins.
- They must have earned at least $300 from which SDI deductions were withheld during their base period.
- They must be under the care and treatment of a licensed physician/practitioner or accredited religious practitioner within the first 8 days of their disability. The date their claim begins can be adjusted if it doesn’t meet this requirement. A person must be under care and treatment to continue receiving benefits.
- They must complete and submit their Claim for Disability Insurance (DI) Benefits (DE 2501) (DE 2501 cannot be downloaded or reproduced—it must be ordered through the EDD website) no earlier than 9 days after the first day disability begins, but no later than 49 days, or they may lose benefits.
- They must have their physician/practitioner complete the medical certification of their disability claim.
It is important to note that citizenship and immigration status do not affect eligibility.
How to Receive Benefits Under DI
In order to receive benefits under DI in the State of California, an individual must:
- File a claim for DI benefits using SDI Online or by mail.
- Complete a 7-day, unpaid waiting period.
- Have earned at least $300 in wages that are subject to SDI deductions during the 12-month base period of the claim.
- Have the physician/practitioner certify the disability by completing the Physician/Practitioner Certification (can be done via SDI Online, or by mail).
How payments are issued
Electronic payment: benefit payments will be deposited to an issued debit card.
Payment by mail: benefit payments will be issued by EDD check (7-10 days via mail).
Long-Term Disability Insurance Options in California
California only offers long-term disability insurance to Excluded Employees. Excluded Employees are state employees typically in managerial, supervisory, or confidential positions, as well as Constitutional officers. Long-term disability insurance (LTD) from the state is a voluntary insurance plan that replaces a portion of an excluded employee’s income in the event that they cannot work for 6 months or more due to a covered injury or illness.
Excluded employees eligible for LTD have two options to purchase for coverage:
- Replace up to 55% of the first $18,182 of their monthly base salary (maximum of $10,000 per month) reduced by deductible income, or
- Replace up to 65% of the first $15,385 of their base salary (maximum of $10,000 per month) reduced by deductible income.
If one is not an Excluded Employee, they can receive long-term disability insurance through their employers or buy it on their own. Typically, long-term disability insurance pays a percentage of someone’s salary, usually 50% to 60%, depending on the policy. The benefits usually last until the insured can go back to work, or for the number of years stated in the policy.
Costs for long-term disability insurance vary, but an insurer will also consider the individual’s income, age, health, gender, smoking status, and occupation when determining costs.
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If you have any more questions about short-term vs long-term disability insurance in California, contact us. We’ll get you in touch with the most qualified attorneys for your unique legal matter. Get your free consultation with one of our California Disability Insurance Attorneys today!