California offers both Long Term Disability (LTD) insurance and Short Term Disability Insurance (DI) under the California State Disability Insurance (SDI) program. Both form a crucial part of your financial safety net if you can’t work due to a non-work-related injury or illness, pregnancy, or childbirth.
In California, you must pay into the State Disability Insurance (SDI) program through deductions. However, Long Term Disability (LTD) insurance is neither statutory mandated nor established by the government but purchased on an individual’s behalf as an employment benefit. The only options that come close to an LTD in California are SSI disability and Social Security disability, which are notoriously difficult to qualify for. You may want to talk to a worker’s compensation law firm in the Bay Area to help you apply and fight for your benefits.
Short and long term insurance policies cover workers differently. Therefore, deciding whether to get short term, long term, or both types of disability insurance will depend on a worker’s budget, needs, and expectations.
How Long Do SDI and LTD Benefits Last?
The amount of time someone continues to receive disability benefits is called a benefit period. Going by their names (long and short term) , one will obviously last longer than the other.
Long term benefits usually last for an extended period of time and can go for two, five, or ten years. Sometimes they can last until someone attains retirement age – usually 65.
Conversely, short term benefits in California can last between 90 days and 52 weeks. Self-employed people can only receive payments for only 39 weeks.
Generally, the shorter the benefit period, the cheaper the policy will be. However, remember that an average disability could last around three years. The best-case scenario would be to have the SDI benefits supplement LTD insurance as the former awaits the latter to kick in.
Who Is Eligible For LTD and SDI Benefits in California?
Employees working for companies offering LTD coverage must have worked for a certain period, also known as a service wait or waiting period. For association affiliated or professional LTD coverage, the person must have been a member for a specified period of time.
To receive California SDI benefits, on the other hand, you must:
- Be unable to do regular work for eight consecutive days
- Have either been employed or actively in search of employment at the time of the disability
- Be under the care of a licensed doctor or accredited religious professional
- Have a completed form from your doctor that medically certifies your disability
- Have earned at least $300 from your previous deductions
- Have lost wages
- Complete and mail a claim form with 49 days following your disability
Ineligibility for SDI
You may also be ineligible to receive California short term disability insurance for a number of reasons. These circumstances include:
- You were disabled while engaging in criminal activity that ended in a conviction
- You are in the process of claiming or already receiving Paid Family Leave benefits or Unemployment Insurance
- You’re working and receiving your regular salary, or you’re on paid sick leave
- You’re getting weekly Workers’ Compensation benefits at the same or greater rate than the SDI rate
- You’re in the circumstance because of a convicted crime
- You failed to get an independent medical examination
How Much Coverage Does Short Term and Long Term Disability Insurance Provide?
Neither program will match 100% of your salary, but they might come close. SDI in California will pay about 60-70% of your regular salary, up to a cap. This weekly cap is $1,300 in 2020. No withholding tax will be taken from your disability benefits.
LTD provides a benefit of around 60% of your initial monthly income. Most likely, it will start when your SDI benefits end.
What Determines the Cost of STD and LTD Insurance?
Other than the waiting period, benefit period, and the amount to be covered, these factors will affect the cost of a disability policy:
Nonetheless, expect to pay about 1-3% of your annual salary to disability policy. Considering the duration that long term disability insurance lasts, it is correct to say it is more cost-effective than an SDI.
How Do I File For SDI and LTD?
Filing a worker’s compensation claim in California can be tricky sometimes. For an SDI claim, your employer or employee’s healthcare practitioner will provide the form. You can also file it online through the state’s Economic Development Department (EDD) website and must file the claim within 49 days following your inability to work.
You’re also required to file a medical certificate of disability, which should be authorized, as mentioned earlier.
The EDD may call you for any questions and will likely also call your employer. If you qualify, they will send you a notice detailing your eligibility, amount to expect, and when the benefits start.
For LTD insurance, claims submission procedures are included in the insurance policy or Summary Plan Description. While the process may vary from employer to employer, the process typically begins by first contacting your employer or insurer for direction.
A number of claims forms will be required, including:
- A disability claim form completed by the claimant
- An attending physician statement
- Employer’s statement, and
- An authorization for release of medical information
An experienced worker’s compensation attorney in the Bay Area will help you submit the necessary paperwork and work with you throughout the legal process to ensure your rights are not being violated.
When Do These Disability Benefits Commence?
The waiting period for SDI benefits is around 14 days. Long term disability insurance has a waiting period of between 30 days and two years.
The longer this waiting period, the more time you’ll go without accessing your policy – but the cheaper the policy might be.
How Do I Choose Between Long Term and Short Term Disability Insurance?
Long term and short term disability insurance plans offer different kinds of coverage. Workers who can afford often choose to buy both to be completely covered. However, those who don’t see this as an option will opt for the long term disability insurance and may use their savings to provide for the first few months after a disability.
Legal Help to Secure Worker’s Compensation Benefits
Some employers may not want to cooperate with you on your claim. Even when you are clear on your rights, your employer may still try to avoid honoring them. If you are being discriminated against by anyone involved in the process or discouraged by your employer against making a claim, talk to an experienced disability or worker’s compensation lawyer who’ll protect your rights and fight for the benefits you’re entitled to.
If you need legal help when applying for short or long term disability insurance, or to appeal a denial of an application for disability benefits, talk to a worker’s compensation lawyer at Wyman & Hegwer Law Office. We represent worker’s compensation victims. Get started by calling us at 415-448-5107 for a free case evaluation.