BILL ANALYSIS Appropriations Committee Fiscal Summary 1661 (Kuehl) Hearing Date: 5/23/02 Amended: 5/6/02 + LCR 0210575 Consultant: Nora Lynn Policy Vote: Labor & IR 5-1 ____________________________________________________________ ___ BILL SUMMARY: SB 1661 creates, within the state disability insurance (SDI) program, a family temporary disability insurance (FTDI) program to provide up to 12 weeks of wage replacement benefits to workers who take time off work to care for a seriously ill child, spouse, parent, domestic partner, or to bond with a new child. Fiscal Impact (in thousands) Major Provisions 2002-03 2003-04 2004-05 Fund Programming 7,500 Special* Addl. 1st time claims 9,200 9,200Special* Monitoring 15,000 15,000Special* Employer FTDI contributions (55,000) (110,000)Special* Employee FTDI contributions (109,000) (220,000)Special* FTDI benefits 53,500 108,500Special* * SDI Fund STAFF COMMENTS: SUSPENSE FILE The majority of the state's workers - some 13 million people - are covered by SDI, which is financed by a mandatory payroll contribution by employees which is paid into the SDI Fund. SB 1661 provides disability compensation to employees unable to work due the sickness or injury of a family member or domestic partner or the birth, adoption or foster care placement of a child, and funds these additional benefits through additional employee contributions and by requiring employers to provide benefits either directly, through private insurance, or to pay into the SDI Fund. EDD's estimates for employer and employee contributions as well as anticipated benefits were based on a model where half of the state's 800,000 employers would participate in the new program rather than opting out with a bond. EDD staff anticipate $107 million in benefits would be paid in 2004 and $110 million in 2005. Employers would contribute $109 million to the fund in 2004 and $111 million in 2005, while employees' additional contributions to SDI as a result of the FTDI surcharge would total $219 million in 2004 and $223 million in 2005. EDD staff project that the SDI Fund would remain solvent with this program in place. Amendments proposed by the author increase the maximum rate which may be charged to employees to fund the program; delay the effective date to Jan. 1, 2004 and benefits payment until July 1, 2004; and both clarify how employers will fund their share of the program and that initial and ongoing administrative costs are to be paid from the SDI Fund.