Overview
New York is one of a handful of states that require employers to provide disability benefits coverage to employees for an off-the-job injury or illness. Coverage for disability benefits can be obtained through a disability benefits insurance carrier who is authorized by New York State Department of Financial Services to write such policies. Large employers may opt to become authorized by the Board to self-insure (WCL §211).
The Disability Benefits Law (Article 9 of the WCL) provides weekly cash benefits to replace, in part, wages lost due to injuries or illnesses that do not arise out of or in the course of employment (WCL §204). Medical care is the responsibility of the employee and is not paid for by the employer or insurance carrier.
Paid Family Leave coverage is typically a rider on an employer’s disability benefits insurance policy.
Ways to Obtain
Insurance policies can be obtained through several methods including a private insurance carrier, State Insurance Fund, or becoming self-insured. See below for more information on each option.
Insurance Carrier
Policies can be purchased through a private insurance carrier authorized by the New York State Department of Financial Services. These insurance carriers may specialize in certain markets and offer various incentives to policyholders.
NY State Insurance Fund (NYSIF)
Policies may also be purchased through NYSIF, a public insurance carrier. NYSIF is a not-for-profit agency of the State of New York that offers workers’ compensation, New York State disability benefits and Paid Family Leave insurance. It is a separate and distinct entity from the New York State Workers’ Compensation Board.
NYSIF must provide insurance to any employer seeking coverage, regardless of the employer’s type of business, safety record or size. However, if an employer owes NYSIF money from a previous bill or account, coverage can be denied.
Self-Insurance
Employers may apply to provide workers’ compensation, disability, and Paid Family Leave benefit coverage to their employees through self-insurance. If qualified to self-insure, employers agree to make benefit payments, meet all obligations under WCB laws, rules and regulations, and must maintain an adequate security deposit in the event of a default.
Disability and Paid Family Leave Benefit Plans
Employers may provide New York State Disability and Paid Family Leave benefits to their eligible employees under a Board approved Plan. All Plans must be accepted by the Board and will need to adhere to the statutory requirements of the New York State Disability and Paid Family Leave Law (WCL Section 211). Once a Plan has been accepted by the Board, the employer(s) must provide administration of these benefits from a licensed NYS insurance carrier, or by obtaining the Boards approval to administer benefits as a Self-Insured employer.
Enhanced Disability and Paid Family Leave Benefits
An employer may choose to provide enhanced benefits such as; increased monetary pay out, a shorter waiting period duration to collect benefits, or a longer duration for benefits to be paid. These benefits must be secured through a carrier licensed to write New York State statutory disability and paid family leave coverage or through Board approved self-insurance. These enhanced benefits are filed with the Board by the carrier or self-insured.
Deduction and Waiver – DB and PFL
An employer is allowed, but not required, to collect contributions from its employees to offset the cost of providing disability and Paid Family Leave benefits. These contributions are separate and distinct from one another and may be funded by employees through payroll deductions.
Disability Benefits:
An employee’s contribution is computed at the rate of one-half of one percent of his/her wages, but no more than sixty cents a week.
WCL Section 218 of the DBL specifically states that any agreement by an employee to waive his/her right to disability benefits shall be void.
However, any employee who is receiving or is entitled to receive old age insurance benefits under title two of the social security act, shall be exempt upon filing Form DB130 with the employer and the chair.
Additionally, sole-proprietorships, regular partnerships, individual trustees, individual receivers and legal representatives may be eligible for spousal exemptions from the coverage requirements under the NYS Disability and Paid Family Leave Benefits Law. Such election shall be final and binding upon the spouse named in the notice until revoked by the employer. To revoke the election to exclude a spouse from coverage under the NYS Disability and Paid Family, the employer must notify both the Board and their carrier with an updated Form DB-212.5.
Paid Family Leave:
Each year, the Department of Financial Services sets the employee contribution rate to match the cost of coverage.
Paid Family Leave coverage can only be waived if the employee is regularly scheduled for less than 20 hours per week and will not work 175 days in a year, or the employee is regularly scheduled for 20 or more hours per week, but won’t be in employment 26 consecutive weeks.
Article from: http://www.wcb.ny.gov/content/main/DisabilityBenefits/employer-disability-benefits.jsp