BILL ANALYSIS Ó SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS Senator Tony Mendoza, Chair 2015 - 2016 Regular Bill No: SB 667 Hearing Date: April 22, 2015 ----------------------------------------------------------------- |Author: |Jackson | |-----------+-----------------------------------------------------| |Version: |April 6, 2015 | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Alma Perez-Schwab | | | | ----------------------------------------------------------------- Subject: Disability insurance: eligibility: waiting period KEY ISSUE Should the Legislature allow an individual suffering from a non-work related injury or illness and who is receiving State Disability Insurance (SDI) benefits [and has served the necessary unpaid 7-day waiting period to receive benefits] to re-apply for SDI within 60 days after the initial application without having to serve a second 7-day unpaid waiting period? ANALYSIS The existing California State Disability Insurance (SDI) program provides short-term Disability Insurance (DI) and Paid Family Leave (PFL) benefits to eligible workers temporarily unable to work due to non-work related illness or injury, pregnancy, or childbirth. Individuals may also be eligible for PFL to care for a seriously ill family member or to bond with a new child. The SDI program, administered by the Employment Development Department (EDD), is a state-mandated partial wage-replacement insurance plan funded through employee payroll deductions. Eligible individuals can receive disability benefits equal to one-seventh (1/7th) of his or her weekly benefit amount for each SB 667 (Jackson) Page 2 of ? full day during which he or she is unemployed due to a disability if the director of EDD makes specified findings, including that: a) He or she has made a claim for disability benefits as required by authorized regulations. b) He or she has been unemployed and disabled for a waiting period of 7-consecutive days during each disability benefit period. During this 7-day waiting period, no disability benefits are payable. (Labor Code §2627) Existing law defines "disability benefit period" as the continuous period of unemployment and disability beginning with the first day for which the individual files a valid claim for disability benefits. Existing law provides that if an individual receives two consecutive periods of disability due to the same or related cause or condition and separated by a period of not more than 14 days, then they are considered as one disability benefit period. (Labor Code §2608) This Bill would waive the 7-day waiting period for an individual who has already served the 7-day waiting period for the initial claim when that person files a subsequent claim for disability benefits for the same or a related condition within 60 days after the initial disability benefit period. This Bill would also require the director of EDD to submit a report regarding the effect of the modified waiting period to the Legislature by January 1, 2020, as specified. COMMENTS 1. Need for this bill? Under the SDI program, an employee must serve a waiting period of seven consecutive days of wage loss prior to receiving partial wage replacement disability benefits. If an employee returns to work after a period of temporary disability for more than 2 weeks before experiencing a reoccurrence of the same condition they must re-serve the seven consecutive day waiting period before being eligible for additional benefits. According to the Employment Development Department, in 2014 there were a total of 699,486 SDI claims filed of which 5,853 were from individuals who filed multiple claims for the same condition. SB 667 (Jackson) Page 3 of ? The author argues that this second waiting period significantly disadvantages employees who are managing a chronic illness or injury, like chronic debilitating back pain or those who have returned to work after initial cancer treatment, but must have chemotherapy treatments every three weeks. This bill would address this problem by extending from two weeks to 60 days the period of time under which an employee can reopen a disability insurance claim without having to suffer a new 7-consecutive day waiting period of wage loss while waiting to be eligible for SDI benefits. 2. Proponent Arguments: The author believes that this measure would ensure that the SDI system better serves the needs of employees managing chronic health conditions. According to the author, if an employee returns to work after a period of disability in which they served the seven consecutive-day unpaid waiting period before drawing SDI benefits, that employee shouldn't have to serve another seven consecutive-day unpaid waiting period, if they must leave work again within a two month period for additional treatment. The author argues that the unpaid waiting period places an unnecessary hardship on workers managing a chronic health condition and disincentives employees from returning to work as soon as and for as long as possible. Proponents argue that for an injured or ill worker who is forced to stop working during treatment for a serious health condition, every day without wage replacement adds to the layers of distress they are already experiencing. Many of these workers are facing life-changing diagnoses, rising health care costs and the limitations that treatment may put on their ability to earn an income. Proponents site as an example, a patient who takes one week of leave every three weeks for chemotherapy will never be eligible for benefits because he or she will have to re-serve the waiting period during each instance of leave. This bill, they argue, is a common sense reform that will allow workers with serious health issues better and more reliable access to much needed SDI benefits. 3. Opponent Arguments : SB 667 (Jackson) Page 4 of ? None received. SUPPORT Legal Aid Society-Employment Law Center - Sponsor California Labor Federation, AFL-CIO California Rural Legal Assistance Foundation National Association of Social Workers, California Chapter UCSF Helen Diller Family Comprehensive Cancer Center, Social Work Department OPPOSITION None received -- END --