TEMPORARY DISABILITY INSURANCE
may elect coverage. In New Jersey any governmental entity or instrumentality may elect coverage if covered under the UI law.
In California and Rhode Island, the programs--both benefits and administration--originally were financed wholly or mainly by employee contributions which formerly went to UI. In New Jersey, employers have always contributed substantially-- up to 50% historically-- for temporary disability insurance. In addition to providing that current employee contributions are deposited in the disability fund, the legislatures in these States provided for the transfer to the disability fund of some or all of the employee contributions collected under the UI law.
TYPE OF FUND -In Rhode Island all contributions are paid into a pooled State fund and all benefits are paid from that fund. In California, New Jersey and Puerto Rico, coverage under a private plan (usually with an insurance company) may be substituted for coverage under the State fund if the private plan is approved by the agency as meeting certain requirements of the law. Contributions are then paid into the private plan and benefits are paid by it, generally one for disabilities beginning during employment or one for shortly thereafter. In Puerto Rico benefits under a private plan are paid to individuals for periods of disability that begin during unemployment or while employed in noninsured work.
The Hawaii and New York laws are similar to an employer-liability law in that they require employers to take positive action to provide disability insurance for their workers--with employees contributing to the cost. In New York the employer may provide the protection through self- insurance, or through buying an insurance contract from either a private insurance company or the State insurance fund, which is a State-operated competitive carrier originally organized for worker's compensation. Also, there is a special fund for disability benefits, operated by the State, for benefits to the disabled unemployed. In Hawaii an employer may provide protection through private plans with an authorized insurance carrier or through approved self-financing. In addition, there is a special State fund for unemployed workers and employees of bankrupt or non-complying employers.
AMOUNT OF CONTRIBUTIONS -In California all employees covered by the State fund pay no more than 1.3 percent or less than 0.1 percent (may not decrease from the previous years rate by more than 1.0 percent). In addition, a self-employed person in California, whose application for coverage has been approved, is required to make contributions at the rate of 1.25 percent of wages (deemed to be $5,475 a quarter). In Rhode Island all employees (except those who have elected not to be covered on religious grounds) pay 1.4 percent up to the UI taxable wage base of $42,000. In New Jersey employees covered by the State fund pay 0.50 percent for disability insurance on wages up to the taxable wage base. Employers under the State fund pay a basic rate of 0.50 percent subject to experience rating; an employer's rate may decrease to 0.1 percent or increase to 1.1 percent on the basis of his reserve ratio and the status of the fund as a whole. Employees covered by private plans in California, New Jersey and Puerto Rico cannot be required to pay higher contributions than they would pay to the State fund, nor in Puerto Rico can they be required to contribute more than the employer.