How Does State Disability Insurance Work?
It is important to understand that state disability insurance is only required in a handful of states (and one territory) as of 2019:
- California (State Disability Insurance and Paid Family Leave)
- Hawaii (Hawaii Temporary Disability Insurance)
- New Jersey (New Jersey Temporary Disability Insurance)
- New York (New York Disability Benefits Law)
- Rhode Island (Rhode Island Temporary Disability Insurance)
- Commonwealth of Puerto Rico (Puerto Rico Disability Insurance)
Individual states differ in the details of how their individual disability insurance plans work, but in general, employers are required to contribute to either a state or private plan. Some states also allow employers to self-insure if they can prove they have the financial resources to do so, though this option is rarely exercised. When insured employees become injured, state disability insurance provides payouts if they are unable to return to work for a short period of time.