The California State Disability Insurance (SDI) program provides short-term monetary benefits to workers who experience a decrease in income after a disability. Covered disabilities include non work-related illness or injury or a medically disabling condition from pregnancy or childbirth.  SDI pays benefits that replace a portion of the disabled individual’s wages. As a state-mandated program most of the employees of California are covered under the program –over 12 million workers. It is funded through employee payroll deductions. A few exceptions that are not insured with the California state disability program include railroad employees, employees who claim religious exemptions, some employees of non-profit organizations, and most government employees.  

Types of SDI plans

The California SDI program offers both a State Plan and Voluntary Plan. The State Plan is mandatory, unless an employer, with the consent of his/her employees, chooses a Voluntary Plan. A Voluntary Plan may substitute the State Plan if it provides at least one greater benefit than the State Plan and does not cost the employee more than the State Plan.

Elective Coverage is sometimes opted for by employers and self-employed persons though the method of computing benefits is different from that of employees whose coverage is mandated by the State Plan.

Individuals in family employment not subject to the California Unemployment Insurance Code can also opt for elective coverage at the same rate and benefits as employees covered by the State Plan.

Participating in the State Plan

Employees who participate in the State Plan must accept the benefits provided under the plan and must also pay the necessary costs, unless the employer undertakes to pay all or part of the State Disability Insurance on their behalf.

To be eligible for the program, the employee must have contributed to the State Disability Insurance fund with a payroll deduction through a California employer.

There may be a delay in the start of the benefit if the employer is paying full salary as paid sick leave. When an individual is eligible for a private Short Term and/or Long Term disability insurance the insurer may reduce their benefit by the amount that the individual is receiving from SDI. The state would become the first payer, supplemented by the private disability coverage.

Benefits Of California State Disability Insurance Coverage

• SDI coverage goes with the worker and is not dependent on staying with a particular employer. 
• SDI coverage is mandatory for most California workers.
• SDI is non-exclusionary. An eligible worker's coverage cannot be canceled or denied because of health risk factors, pre-existing medical conditions, or hazardous employment.
• SDI may pay up to 52 weeks of benefits with a waiting period of only seven days.
• Payroll deductions for all covered workers are based on the same low contribution rate.   

The State Plan provides a tax-free replacement of income of 55% of an employee's average weekly pay with the benefits paid biweekly. Benefit entitlement starts on the eighth consecutive day of disability continuing up to 52 weeks while the claimant remains disabled.   

California SDI is short term disability coverage.  Sometimes disabilities can continue for over 1 year or be permanent.  For these types of disabilities we have long term disability insurance.  This provides a very important protection for people when an injury prevents one from working for a lifetime.