State disability insurance is insurance coverage, provided by the state in some regions, offering replacement of wages lost as a result of temporary disability. Not all states offer this service, and in regions where it is not available, people will need to purchase private disability insurance if they want access to replacement wages when they are temporarily disabled. Other disability insurance covers long-term and permanent disability.
In states where state disability insurance is available, the state provides a partial replacement of wages when people cannot work because of a disability or a condition like pregnancy. Funding for the insurance is provided through payroll deductions, with people paying a small percentage of their wages, up to a certain amount, on each paycheck. This is a form of short-term disability insurance, kicking in shortly after a doctor certifies disability to offer income protection.
To receive state disability insurance, people need to be able to document a disability that prevents them from working. The disability does not have to be acquired on the job or as a result of work. A doctor will evaluate the patient and provide information about the nature of the impairment, its impact on the person's ability to work, and how long the patient is likely to remain unable to work. The state provides partial payments of lost wages so people can cover their living expenses during the period of temporary disability.
In some states, employees can choose between state disability insurance and a private plan administered by the employer. Employers can enroll their employees in such programs and use the payroll deduction to fund the private plan, rather than submitting the money to the state. If this is an option, employees will be provided with information when they set up their employee benefits with the human resources department. It is advisable to look over the benefits provided with the state and private plan to select the most suitable option.
If a disability is long term, people are eligible for other government benefits beyond state disability insurance. The state's payments can provide important gap coverage while people wait to become eligible for other types of benefits, ensuring that people do not lose their homes or go into bankruptcy while a disability is diagnosed and evaluated. People concerned that disability coverage provided through the government will not be sufficient can also purchase separate disability insurance products to have access to more extensive benefits.
