© UFS
©2014 Metropolitan Life Insurance Company
Legislative & Regulatory Information
Jurisdiction Effective Date Author Release Date File No.
CA; HI; NJ;
NY; RI; PR
---
Randall Sigmund
1/23/14
LI-484
Topic
Disability
State Plans
Reference:
Supersedes LI-456R
HIGHLIGHTS OF STATE DISABILITY BENEFIT LAWS
(JANUARY 2014)
Executive Summary
• Six jurisdictions have laws which require employers to provide disability benefits for
non-occupational disabilities.
• Those jurisdictions are: California, Hawaii, New Jersey, New York, Rhode Island, and the
Commonwealth of Puerto Rico.
• MetLife has products that employers can utilize to comply with the mandated disability
requirements in Hawaii, New Jersey, New York, and Puerto Rico.
•
The attached “Highlights of State Disability Benefit Laws” chart outlines certain features of
the laws in these six jurisdictions.
Background
Rhode Island enacted the first mandatory employer non-occupational disability benefits law, called
Temporary Disability Insurance (or TDI) in 1942. This was followed by California’s State Disability
Insurance (SDI) in 1946, New Jersey’s Temporary Disability Benefits (TDB) in 1948, New York’s
Disability Benefit Law (DBL) in 1949, Puerto Rico’s Seguro por Incapacidad No Ocupacional
Temporal (SINOT) in 1968, and Hawaii’s Temporary Disability Insurance (TDI) in 1969. Each
jurisdiction provides for a different method by which employers can establish complying plans, from
Rhode Island’s state-administered plan (coverage is only available through the State), to Hawaii’s
reliance on employer-provided plans only (no State coverage).
Failure to comply with these laws generally results in fines and penalties being imposed
against the employer. Virtually all non-governmental, non-religious and for-profit private employers
are affected. These laws are generally applicable to each distinct employing unit of an employer.
Some jurisdictions assign unique identifying numbers to employers or employing units. Whenever
any employing unit receives its own identifying number, that unit is also separately responsible for
obtaining and filing a plan of disability benefits that complies with the state disability benefit law.
These six mandatory disability benefit laws share two features that make them very important for
employers with employees in those jurisdictions:
• Employers may not claim ERISA preemption for short-term disability plans in these
jurisdictions, even if such plans are self-insured. This is because ERISA does not apply
to plans written to comply with applicable state disability benefit laws.
1• These laws apply to employees working in these jurisdictions, regardless of the
location of the employer’s corporate headquarters or the situs of any of its group
insurance policies or benefit plans.
Affected Employers
Generally, all private employers with employees working in a jurisdiction with a state disability
benefit law (generally referred to as a “state plan” jurisdiction) are affected by such law. An
employer may provide the minimum benefits required (usually called “statutory benefits”) or greater
benefits under the same or a supplemental plan. (In Rhode Island, any additional benefits can
only be provided by a supplemental plan. In California, if an employer chooses to use its own
“Voluntary Plan”, the plan must exceed State Fund standards in at least one area.) An employer
that is subject to the state disability benefit law may never provide less than statutory benefits.
Affected Employees
Coverage of all full and regular part-time employees is usually required for disabilities caused
by non-occupational injury or illness, including pregnancy. Employees may not collect
unemployment insurance benefits for the same period as they are claiming benefits for a disability.
As shown in the attached chart, some jurisdictions exempt certain students and certain other
classes of employees from the state disability benefits law. Eligibility for coverage varies from the
first day of employment, with no probationary period, to probationary periods that are waived for
employees who were previously “covered employees” under a prior employer’s disability plan.
Pregnancy
Disabilities caused by or related to pregnancy are generally treated the same as any other illness.
However, in Puerto Rico, disability is presumed during the eight weeks a woman is entitled to
maternity leave from her employer under Puerto Rico’s Working Mothers Act. The Working Mothers
Act requires the employer to pay pregnancy and child adoption leave at the worker’s full salary.
Therefore, SINOT disability payments are not required during that portion of a pregnancy leave
where the mother is receiving Working Mothers Act benefits. However, if the woman is disabled
beyond the time period of paid Working Mothers Act leave, she may be entitled to collect SINOT
1
disability benefits. If physician certified pregnancy-related disability continues beyond eight weeks,
benefits under SINOT are the same as for any other disability.
Benefits
Waiting Period:
In general, benefits are paid after the seventh consecutive day of disability. However, in
New Jersey, Puerto Rico, and Rhode Island, benefits may also be provided for some or all of the
first seven days under certain circumstances (such as hospitalization, or a disability extending for a
specified period of time). In all instances, for benefits to be payable, an employee must be certified
as disabled by specified licensed practitioners.
Duration of Benefits:
Hawaii, New Jersey, New York, and Puerto Rico provide that benefits must continue for up to 26
weeks, or prior recovery. Rhode Island provides that benefits must continue for up to 30 weeks
and California provides that benefits must continue for up to 52 weeks. Benefits are generally a
percentage of an employee’s wages over a specified period of time, with a statutory maximum that
need not be exceeded. Some jurisdictions also have a statutory minimum benefit, regardless of the
wage base of the disabled employee.
Some Other Benefits:
• In addition to wage replacement benefits, Puerto Rico’s SINOT also provides for death
and dismemberment benefits. The death benefit is $4,000. The dismemberment benefit
ranges from $2,000 to $4,000, depending on the severity of the loss.
• Rhode Island’s TDI, in addition to salary-based wage replacement benefits, also
provides for an additional payment for up to five dependent children under age 18 (and
over age 18, if a child is disabled).
Complying With These Laws
Even if an employer’s existing sickness and accident plan provides greater dollar benefits than
required by a “state plan” law, a separate plan written to comply with the law of each “state plan”
jurisdiction in which an employer has employees is usually required. This is because a disability
benefits plan not specifically written to comply with “state plan” requirements will likely not meet
minimum “state plan” requirements in one or more of the following areas: employee eligibility,
probationary and waiting periods, practitioners from whom certification of disability must be
accepted, and payment of benefits for disabilities that begin during a period after an employee’s
employment terminates (known as “post-employment” benefits). Such “post-employment” benefits
are required under an employer’s plan in Hawaii, New Jersey, New York, and Puerto Rico.
Also, even if an existing employer’s plan meets the requirements of a state disability benefit law,
there generally are filing and approval requirements with which employers must comply before the
plan can be used.
Using MetLife Disability Products to Comply
MetLife has insurance products that employers can purchase in order to comply with their
obligations under state disability benefit laws in Hawaii, New Jersey, New York, and Puerto Rico,
but not in Rhode Island, where statutory coverage is available only from the State, and in
California where administrative rules have made it impractical.
MetLife provides administrative services for an employer’s state approved self-insured plan in
California, Hawaii, New Jersey and New York.
MetLife only has fully insured policies available in Puerto Rico, Hawaii, New Jersey and New
York.
Employers in California, New Jersey, New York and Puerto Rico may also obtain coverage
directly from the state.
Using Self-Insurance to Comply
Subject to prior state approval, employer self-insurance is permitted in New Jersey, New York,
California, Hawaii, and Puerto Rico, but not in Rhode Island (which requires employers to obtain
coverage directly from the State). When an employer opts for self-insurance, employer bonding
and financial disclosure requirements may apply. A MetLife Administrative Services Agreement
(ASA) to administer an employer’s self-insured state disability plan is currently available in New
York, New Jersey and California. MetLife does not currently provide administrative services for
employers wishing to use self-insurance to comply with the statutory requirements of Puerto Rico.
Using the Attached Highlights Chart
The attached chart provides an overview of the requirements of some of the provisions of the state
disability benefit laws. It focuses on the provisions concerning employer plans and reflects some of
the latest changes in these laws. For a description of some of the latest changes in these laws,
please refer to the following Legislative & Regulatory Information (“LI”) Releases:
• LI-468 – Rhode Island Increases TDI Maximum Benefit
• LI-477R – New Jersey Temporary Disability Benefits (TDB) - Rate Changes for 2014
(Revised)
• LI-478 – California State Disability Insurance (SDI) - Benefits and Maximum Employee
Contribution for 2014
• LI-479 – Hawaii Temporary Disability Insurance (TDI) Maximum Benefits and Contributions
for 2014
There were no recent developments in, or releases on, New York’s or Puerto Rico’s disability
benefits laws.
This chart is not, and should not be relied upon as a comprehensive statement of the requirements,
limitations, and/or provisions of the mandatory state disability benefits laws, or of all employer
responsibilities or of all employee rights under those laws.
This LEGISLATIVE & REGULATORY
INFORMATION release is not intended to supply
legal advice or to offer solutions to individual
problems. Those who require such advice should
consult their attorneys.
JURISDICTION C A L I F O R N I A H A W A I I N E W J E R S E Y
Type Of Law Competitive between state fund and private plans - former automatic if latter not elected by employer or with his consent, and by employee
All Private Plan. (No state fund or plan.)
Competitive between state fund and private plans - former automatic if latter not elected by employer and, if contributory, by majority of employees. Approach Used Tax supported state fund provides benefits -
like Unemployment Compensation, but Voluntary Plans may be substituted.
Employer must provide benefits – like Workers’ Compensation, but employees share cost.
Tax supported state fund provides benefits - like Unemployment Comp., but private plans may be substituted. Types of Private
Plans
Insured and self-insured plans exceeding state fund standards.
Insured and self-insured plans equal to or exceeding statutory requirements and continuation of certain existing plans (collective bargaining).
Insured and self-insured plans equaling or exceeding state fund standards, and continuation of certain other existing plans.
Limitations Upon Right to Establish Private Plans
Must not result in substantial “adverse selection” against state fund - for insured voluntary plans only.
None. Private plan cannot exclude any class of
employees, determined by age, sex, race, or wages.
Employee Contributions
State or Private; Not more than 1.0% of the first $101,636 of annual wages (i.e., a maximum of $1,016.36).
50% of cost but not more than 0.5% of weekly wages, to a maximum of $4.70 per week.
0.38% (increased from 0.36% in 2013) of maximum subject wages ($31,500 effective 1/1/14), determined annually or $2.30 weekly / $9.98 monthly.
Employer Contributions Required
State: None
Private Plan: Balance of cost.
Balance of cost. State: 0.5% of maximum subject wages
($31,500 effective 1/1/14), determined annually. Also subject to experience rating. Private Plan: Balance of cost. Employers
Covered
Employers of 1 or more and $100 payroll in any quarter - same as Unemployment Comp.
All employers. Employers of 1 or more who pay $1,000
or more in total wages - same as Unemployment Compensation.
Employees Excluded
Certain employees of certain non-profit organizations, railroad and government employees, real estate salesmen and others.
Certain domestic servants, non-profit organization employees and others.
Certain farm laborers, domestic servants, railroad employees, real estate salesmen, certain government employees and others.
Religious Exemptions
Members of any sect, etc., which depends for healing upon prayer in the practice of religion, upon filing waiver of benefits.
None. Members of any sect, etc., which
depends for healing upon prayer or other spiritual means upon filing waiver of benefits.
Statutory Eligibility Requirements
Earnings in base year of not less than $300, from which SDI taxes were withheld.
Remuneration for at least 20 hours, and wages of at least $400 during the 52 weeks immediately preceding disability.
Either 20 weeks of work in covered employment during base year with earnings of at least $145 in each week; or $7,300 of annual earnings.
How Benefits are Computed
Schedule of benefits same as unemployment compensation - depends on wages in base period.
58% of average weekly wage of $26 or more to next highest dollar.
2/3 average weekly wage subject to a maximum of 53% of statewide average remuneration (determined annually). Minimum Weekly
Benefits
$50. $14 or average weekly wage, if lesser
amount.
None
Maximum Weekly Benefits
$1,075 (effective 1/1/14). $546 (effective 1/1/14) $595 (effective 1/1/14) Maximum
Duration
52 weeks. 26 weeks for any disability or within a
benefit year.
26 weeks with respect to any 1 period of disability.
Waiting Period 7 days. 7 days. 7 days for each disability, but if benefits
are payable for 3 consecutive weeks, then benefits become payable with respect to the first 7 days.
Maternity Benefits Pregnancy related disabilities treated as any other illness.
Pregnancy related disabilities treated as any other illness.
Pregnancy related disabilities treated as any other illness.
Effect of Continued Pay From Employer During Disability
Can still receive disability benefits for each day of disability in amount which, together with wages, does not exceed 1/7 of regular weekly wage immediately prior to disability.
No disqualification from benefits, but salary continuance may be used as part of compliance with benefit provisions of the law.
Reduces benefits if benefits plus continued employer pay exceeds regular weekly wages.
Benefits for Disabled Unemployed Financed by
State Fund, which will be credited with a percentage of taxable wages paid to employees for each calendar year.
Special fund created July 1, 1969, from employer contribution of 0.2% of covered wages. Levy on employers or insurers when balance is below $500,000.
State Plan, which has custody of Unemployment Disability Account and which provides for employer assessment not to exceed 1/10 of 1% of taxable wages paid in preceding year if account has deficit over $200,000. Post-Employment
Period of Coverage
None 2 weeks. 2 weeks.
H I G H L I G H T S O F S T A T E D I S A B I L I T Y B E N E F I T L A W S
JURISDICTION N E W Y O R K P U E R T O R I C O R H O D E I S L A N D
Type Of Law Competitive between state fund and private plans - employer must choose.
Competitive between state fund and private plans - former automatic if latter not elected by April 30 - to be effective July 1. Contributory plans require majority employee consent.
State fund only - no private plans allowed in substitution.
Approach Used Employer required to provide benefits - like Workers’ Compensation but employees share cost.
Tax supported state fund provides benefits - like Unemployment Comp., but private plans may be substituted.
Tax supported state fund provides benefits - like Unemployment Compensation.
Types of Private Plans
Insured and self-insured plans equaling or exceeding statutory requirements and continuation of certain existing plans.
Insured and self-insured plans equal to or exceeding statutory requirements and continuation of certain other existing plans.
None.
Limitations Upon Right to Establish Private Plans
None. Must agree to pay certain
assessments.
Not Applicable.
Employee Contributions
0.5% of employee’s wages, but not in excess of $.60 weekly.
State or Private Plan: 0.3% of taxable wages (up to $9,000).
1.2% of first $61,400 of annual wages. Employer
Contributions Required
Balance of cost. 0.3% of wages (up to $9,000). None.
Employers Covered
Employers of 1 or more on each of at least 30 days in one calendar year.
Employers of 1 or more on any day in current or previous calendar year.
Employers of 1 or more - same as Unemployment Compensation. Also any city or town which elects coverage. Employees
Excluded
Certain elementary and high school day students, casual employees, employees of non-profit organizations and others.
Certain domestic servants, students employed by school or college, government or non-profit organization employees and others.
Certain domestic servants, students employed by school or college, employees of certain non-profit organizations, government employees and others.
Religious Exemptions
Members of a religious order which depends for healing upon prayer or other spiritual means upon filing waiver of benefits.
None. Members of any sect, etc., which
depends for healing upon prayer or other spiritual means upon filing waiver of benefits.
Statutory Eligibility Requirements
Generally four consecutive weeks of covered employment, not necessarily with current employer
Base year earnings of $150 in covered employment.
Either base year earnings of $9,300; or at least $1,550 in one of the base period quarters and base period wages of at least 1½ times the highest quarter earnings and total base period wages of at least $3,100.
How Benefits are Computed
50% of average weekly wage, subject to a maximum of $170 (unchanged since 5/1/89).
65% of average weekly wage, subject to a maximum of $113 (unchanged since 7/1/85).
4.62% of highest quarter wages in base period; subject to a maximum of 85% of statewide average of employees covered by Employment Security Act. Minimum Weekly
Benefits
$20, or average weekly wage, whichever is less.
$12 (Non-Agricultural). $72, plus greater of $10 or 7% of weekly benefit per dependent child to age 18, or over 18 if handicapped. (Max. 5 children).
Maximum Weekly Benefits
$170. (unchanged since 5/1/89) $113 - (Non-Agricultural) There is a death benefit of $4,000; also dismemberment benefits of $2,000 to $4,000
$752, plus greater of $10 or 7% of benefit per dependent child (up to 5) under age 18 (or over 18 if handicapped).
Maximum Duration
26 weeks. 26 weeks for any disability or in any 52
week period.
30 weeks. Waiting Period 7 days for each disability. 7 days for each disability; if
hospitalized during first 7 days, benefits begin on 1st day of hospitalization.
No waiting period as of 7/1/12. Must be unemployed for at least 7 days due to non-job related illness.
Maternity Benefits Pregnancy-related disabilities treated as any other illness.
First 8 weeks: employer-paid leave at full salary per Working Mothers Act; regular SINOT benefits thereafter.
Pregnancy-related disabilities treated as any other illness.
Effect of Continued Pay From Employer During Disability
Generally, sick pay and benefits may be received simultaneously.
Reduces benefit if combined total would exceed wages. Provision under state plan for benefit payment to employer if full pay continues.
Generally, sick pay and benefits may be received simultaneously.
Benefits for Disabled Unemployed Financed by
Assessment on insurance companies, self-insurers, state insurance fund and existing plans, without limit.
Contributions under the Act. Private plans to be assessed annually on a basis considered to be an equitable share of cost.
State plan.
Post-Employment Period of Coverage
4 weeks. 2 weeks. None.
