There are only five states that offer state disability programs for resident employees. And if you're in New York, you're in one of them. Congratulations. But what if you don't know anything about it? Well, you're in luck.
Your independent insurance agent is the best resource here and can help you navigate New York's disability insurance program inside and out. They'll help answer all your questions and get you set up with the coverage you need. But first, how about a little more background on disability insurance, followed by some New York-specific details.
What Is Disability Insurance?
Someone once said if you’re not sure where to start, start at the beginning. And it’s a good thing to know what disability insurance is before getting into the nitty-gritty of the state insurance programs.
Simply put, disability insurance replaces your lost income due to a disability, illness or injury, normally covering between 40% and 70% of your salary. There are several different types of disability insurance that may apply to you, like:
- Individual long-term disability insurance: This coverage handles long-term injuries, disabilities, and illnesses. These disabilities or illnesses keep you from working and are not to be confused with work-related injuries or illnesses. Coverage lasts years, and sometimes decades, depending on your benefits.
- Individual short-term disability insurance: Just like long-term disability insurance, short-term also covers injuries, disabilities, and illnesses that keep you from working. Instead of lasting years, this coverage only lasts for days or months, hence the title short-term.
- Group long-term disability insurance: Group long-term is offered through your employer. You can choose to participate in group coverage or opt out. This policy is offered to all eligible employees at your work and is the kind of disability coverage that lasts for years. Health risk factors are not accounted for, since it is rated on a group basis, which is a huge plus.
- Group short-term disability insurance: This group disability coverage is just like group long-term insurance in the sense that it is offered through your employer and covers disabilities, illnesses, and injuries. Again, it is offered to all eligible employees and you may choose to opt out if you so desire. Health risk factors are still not accounted for on this disability policy type. and your employer normally pays for this coverage.
Government-backed disability programs:
- Social Security disability insurance: This is offered by the federal government and is a federally funded disability benefits program. Sounds like a big deal doesn't it?
- State disability programs: These programs are in just a few states across the country and offer temporary disability insurance.
How and When To Qualify for New York's Disability Program
The program offers temporary disability insurance to New York's workers with an injury, illness, or disability that would prevent them from working. These are not work-related injuries or illnesses, however. That would be covered under your employer’s workers' compensation policy.
Qualifications to be eligible for New York's disability program:
- An employer of one or more persons on each of 30 days in any calendar year becomes an eligible employer four weeks after the 30th day of employment.
- Employees of an eligible employer, who have worked at least four weeks in a row.
- Employees of an employer who elects to provide benefits by filing an Application for Voluntary Coverage.
- Employees who change jobs from one eligible employer to another are protected from the first day on the new job. In general, an eligible employee does not lose coverage during the first 26 weeks of unemployment, provided they are claiming unemployment insurance benefits.
- Domestic or personal employees who work 40 or more hours per week for one employer.
When to qualify for New York's disability program:
- Benefits are paid for a maximum of 26 weeks.
- For employed workers, there is a 7-day waiting period.
What Are the Taxes for New York's Disability Program?
Employers are only allowed to have each employee contribute a maximum of 60 cents per week. That sounds really low, like the lowest tax you may ever pay.
The New York state short-term disability benefits are taxed. Both employees and employers share in funding the premiums. Claims payments are therefore subject to taxation in proportion to the employer and employee contributions.
Bummer, but hey at least you know about it. And contacting your local independent insurance agent on all disability programs and insurance is the best resource you could have. They are not afraid of the state disability program taxes and know the ins and out of them better than most.
Is the New York Disability Program State or Federal?
The New York disability program is a state program with a twist. The disability benefits are offered through a New York Workers' Compensation Board-approved insurance carrier. A little different, but hey it works.
Remember how there are only a few states that participate in state disability programs? Well, there are 5 states in total that are included and they are:
- New Jersey
- New York
- Rhode Island
What Benefits Does New York's Disability Program Offer?
The New York disability program offers supplementation of income up to 50% of your average weekly income. They pull the average based on the last 8 consecutive weeks of pay.
Keep in mind that this state disability program is temporary disability insurance and does not accommodate a long-term disability. As a result, a maximum of 26 weeks of benefits is allowed under the New York disability program.
Considering you are only paying in a very minimal amount out of your paychecks, that's a pretty good return on your tax investment. Your independent insurance agent is armed with all the facts and can fill all your disability coverage gaps.
Be sure to speak with your local independent insurance agent about planning for disability before, during and after that 26-week period.
What's So Great about Independent Insurance Agents?
Tired of researching about state disability insurance, or all insurance for that matter? That’s why independent insurance agents were invented. Would you go to court with the knowledge you gathered from the Internet? Chances are, probably not.
The same applies to disability insurance, leave it to the professionals. They're licensed pros who know how to find exactly what you want for the best possible price. They find you the best carriers with the best coverage and pricing to fit your budget.
So go on, give your local independent insurance agent a call, they're all geared up to help and they know a thing or two about what you need.