What is a State Disability Insurance? Also known as SDI, it is a partial wage for workers. This is mandated by the State and is funded by the deductions from the employee’s payroll. SDI offers short-term benefits that are affordable to eligible workers who are going through a loss of wages because they cannot work.
Their reasons for their not being able to work can be non-work related illnesses or they are injured. They can also be pregnant or have just given birth.
Employees are covered by the State Disability Insurance. But there are some employees that are exempted from these. Examples are the railroad employees. In fact, the non-profit agencies’ employees claim religious exemptions.
There are five states that offer disability insurance programs. These are California, New York, New Jersey, Rhode Island, and Hawaii. One commonwealth also provide the same benefits. This is Commonwealth of Puerto Rico. Each state has their own operations of the programs.
Generally, here are the benefits of State Disability Insurance
1. It covers the travels of the employees. However the coverage is not dependent when the employee is sticking with a particular employer.
2. This is mandatory for most of the workers in the specific state.
3. It is non-exclusionary. Anyone who is eligible cannot have his coverage be denied or canceled due to health risk factors, hazardous employment, or pre-existing conditions.
4. State Disability Insurance may reach up to 52 weeks of benefits. It has a waiting period of seven days.
5. The payroll deduction for all the employees who are covered are based on a single contribution rate.
Here are the SDI Plans.
1. State plan. Majority of employers have this plan. Most of the information that is provided on the insurance is patterned to the policies of the state.
2. Voluntary Plan. This is a private plan that has been approved by the EDD. It may be a substitute for the State Plan. Employee groups as well as the employers can make their own voluntary plans if they both agree to do.
3. Elective coverage. Employers and self-employed people, even those general partners, may apply for coverage. However, the calculation of the benefits they’d get and how much coverage they would acquire is similar to those of the employees whose benefits and coverage have been mandated by the State Plan.
The cost of participating can be calculated at the EDD Employment Tax Office. In this particular plan, the cost is different from one employee to the next. It depends on the payroll.
