Disability Insurance in Major States

The offered disability insurance program in the US is mandated in some states and deductible in salary in the form of tax or salary deduction from the employer who offers disability insurance for employees. However, there are also cases where it is not provided by employer. In this case, the employee may have to get or apply for his own disability insurance to protect himself in the event that he may be unable to work because of non-occupational illnesses or injuries which can be either physical or mental.

The State of California Disability Insurance or most commonly known as the California State Disability Insurance (SDI) is where disability insurance program is mandated by the state and employee’s contribution is obtained from payroll deduction. The rate is however, affordable and eligible employee can be automatically covered by both Disability Insurance and Paid Family Leave Insurance.

At present (2009), the contribution rate in California is 1.1%. The taxable wage limit of SDI is $90,669 for each employee per calendar year giving a maximum withholding of $997.36 for each employee.

Meanwhile, the State of New York Disability Insurance Program, also known as Disability Benefits Law (DBL) is another example where disability insurance program is State-mandated. In order to be eligible for the coverage, one basic requirement is that the employee or recent employee should have worked at least four consecutive weeks.

The rate for disability insurance in New York is classified based on insurance group. This is divided up into those with fewer than 50 employees covered, and those with greater than 50 employees. For fewer than 50 employees, the rates for males and rates for females are different due to pregnancy impact that may have on DBL claims. For more than 50 employees, the rate is determined by experience or based on payroll.

Other examples of states where disability insurance programs are mandated include Hawaii, New Jersey and Puerto Rico. The insurance programs in these states including the programs offered in California and New York cover maternity disability insurance benefits for pregnancy, childbirth and related disabling medical conditions. However, it is only in California where benefit for paternity leave is being offered.