YOU ASK:

What states require employers to provide disability benefits?

WE ANSWER:

Various states have various laws governing the provision of disability benefits. The common factor among these states however, is that employers are required to provide Social Security, as well as workers' compensation. Social Security pays for disability regardless of whether it was acquired in the course of doing one's job. On the other hand, workers' compensation pays only for work-related injuries or illnesses.

Regardless of what the states require of employers, most of these employers provide a competitive employee benefits program to attract employers and keep them in the company. These usually include disability insurance, both for short-term disability as well as long-term disability.

Here are some ways that employers provide disability benefits:

  • 100% coverage. Some employers provide disability insurance by paying the premiums for these plans. The coverage is given to employees who have met certain eligibility requirements.
  • Premiums paid by employee. Some employers provide disability insurance by paying a portion of the insurance and having the rest paid by the employee.
  • Short and long-term disability coverage. Some employers give short-term disability insurance coverage for free, as well as give employees the choice of whether to get long-term insurance. These long-term insurance plans are usually cheaper as they are offered through group plans.

As previously mentioned, the governing rules regarding disability benefits as provided by employers vary from state to state. Some states require employer to provide state-run coverage using payroll taxes. In fact, California, Hawaii, New Jersey, New York and Rhode Island provide their own disability benefits program. These states pick up the slack where employers fail to provide sufficient disability cover. Usually, these state-run programs cover employers since these programs are paid for by deductions automatically made on the employees' income.

Here is a brief rundown of what some states can offer by way of disability benefits:

California. These provide up to 55% of the employee's monthly income. The payments may be made for up to 52 weeks after the 1-week waiting period is met.

Hawaii. The mandated payments go up to 56% of gross salary, up to 6 months. There is a 1-week waiting period.

New Jersey. The state requires payment of up to two-thirds of one's salary after the 1-week waiting period is met. The payments may last for up to 26 weeks.

New York. This state obligates employers to pay up to 50% of a disabled employee's salary. The payments may last for up to 26 weeks.

Rhode Island. The payment may vary as it also bases the percentage on the number of dependent children the disabled employee has. The more children, the higher the percentage. Benefit payments may last for until 30 weeks.

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