In a few states, employees temporarily disabled because of illness or injuries are provided with insurance coverage and offered reimbursement for lost wages. This is known as state disability insurance (SDI) or temporary disability insurance (TDI).
The wages of a worker temporarily disabled because of conditions like injury or pregnancy are partially reimbursed. The injury must not have occurred on the job.
The insurance is funded by deductions from payroll. Covered employees contribute a part of each paycheck towards the insurance. In areas that do not provide this service, employees desiring replacement of wages lost due to disability need to get private disability insurance.
The following states currently offer disability insurance to employees:
In areas that do not provide this service, employees desiring replacement of wages lost due to disability need to get private disability insurance. Many employers offer a private disability insurance plan to their employees as a part of their benefits package. Just like SDI, private plans are also funded by payroll deductions. But instead of submitting the funds to the state, the money is kept within the firm in case of a private plan.
In regions where state disability insurance is available, employees may have the option of choosing between a private employer administrated plan and SDI. Employees can compare both the plans and choose the most suitable option.
Employees suffering from long-term disabilities may be eligible for benefit services beyond SDI. But even in such cases, state disability insurance coverage can fill up the gap while employees wait for a confirmation of their eligibility for other benefits. The DOL website offers a significant collection of resources on disability benefits. The Social Security Adminstration provides a good overview of state disability programs
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