Disability Benefits

Temporary Disability Benefits

Temporary Disability Benefits Are Offered In Some States

In addition to federal Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), state workmen's compensation, and private insurer disability insurance policies, there is another disability benefits option open to some residents of the USA, in the form of state temporary disability benefits.

These programs exist in five states and Puerto Rico, and are also available to employees of the railroad industry. The first states to offer these disability payment plans did so because of a lack of such protection at the federal level at that time. Of course, federal programs to address disability do now exist. The states offering these programs are Rhode Island (their program was instituted in 1942), California (1946), New Jersey (1948), New York, (1949) and Hawaii (1969). Puerto Rico started their program in 1968 and in 1946 the railroad industry amended the Railroad Unemployment Insurance Act, originally passed in 1938, to include disability benefits.

Temporary disability is also called cash sickness benefits, and it's intended to provide disabled employees with partial remuneration for the loss of wages resulting from a temporary non work-related illness or injury.

The laws governing the plans vary greatly from state to state. Rhode Island and the railroad industry plan specify that all benefits must come from the plans' own funds. These funds are derived from deductions withheld from employees' paychecks. However, in New Jersey, California and Puerto Rico, employers are allowed to opt out of the public system and select either an approved substitute plan offered by a private insurer or one financed by the company itself (referred to as 'self-insured').

All the plans are similar in that they correlate a claimant's benefits to the amount they have earned under covered employment. 'Covered employment' refers to the period during which deductions to fund the disability plan were being taken from the claimant's paycheck. The usual formula is that the benefits are designed to replace at least one half ot the former weekly wages, subject to minimum and maximum amounts. Rhode Island, NJ, and Hawaii recompute the maximum every year to a certain percentage of the respective state's average weekly wage.

The maximum period that benefits are payable for varies between twenty-six and fifty-two weeks, depending on the length of employment and the total amount of earnings during the period of covered employment. Usually there is a non-payable period of one week after the disability is incurred before benefits can be paid, similar to most of the states' unemployment benefits plans. This period is normally only required once per year. Usually, any claimant receiving workers' compensation benefits will find that any payments from one of these temporary disability program will be restricted to some degree or eliminated.

The plans handle sick leave pay differently. Some will pay benefits in full even if the claimant is receiving sick leave. Others deduct any sick leave pay from the amount of possible benefits. Every plan forbids the payment of temporary disability and unemployment benefits concurrently.

Regarding proof of disability, all the plans require claimants to be under the care of a medical doctor. In HI and CA, an authorized practicioner from the applicant's religious faith is an acceptable substitute for a physician. If an applicant's claim for temporary disability benefits is denied, they can appeal the decision through the state administrative agency and/or through the legal system.