BILL ANALYSIS Ó SB 667 Page 1 Date of Hearing: August 19, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 667 (Jackson) - As Amended May 18, 2015 ----------------------------------------------------------------- |Policy |Insurance |Vote:|13 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill extends the duration of the "disability benefit period" from 14 to 60 days so that fewer claimants with ongoing or recurring conditions have to face a new 7-day waiting period for each absence from work, and requires the Employment SB 667 Page 2 Development Department (EDD) to report on the impact of this change by January 1, 2020. FISCAL EFFECT: 1)Unknown, likely minor potential impact to the State Disability Insurance (SDI) Fund (technically called the Unemployment Compensation Disability Fund, but often referred to as the SDI Fund) as a result of this bill. The SDI program paid out $4.5 billion in benefits in 2013-14. For certain individuals who have conditions such as cancer for which treatment may be intermittent for a period of time, this may result in an additional week or two of benefits being provided. The average weekly benefit amount is $493. EDD reports a small number of claimants had more than one claim for the same condition in the same year (5,853 claims in 2014). Of these, not all would qualify for additional benefits under this change. An unknown portion would be within the 60-day time frame prescribed by the bill. In addition, a small number of new claims may be filed for which it would not have been worthwhile to file under previous rules. Thus, the exact number of people benefiting from this change is unknown, but it seems likely that it could be in the hundreds statewide. If, for example, if 500 people per year were eligible for an additional week of average benefits due to this bill, costs to the SDI Fund will be $245,000, which equates an increase of 0.005% in total expenditures. This cost may be offset by other dynamics. 2)$60,000 in estimated one-time costs to EDD for information technology systems changes (SDI Fund). COMMENTS: SB 667 Page 3 1)Purpose. According to the author, this bill ensures that the SDI system better serves the needs of employees managing chronic health conditions. An employee who returns to work after a period of disability in which they served the 7-day waiting period before drawing SDI benefits, shouldn't have to serve another 7-day waiting period if they must leave work again within a two month period. The author argues that the unpaid waiting period places an unnecessary hardship on workers managing a chronic health condition and discourages employees from returning to work as soon as, and for as long as, possible. 2)Background. Under the SDI program, an employee must serve a waiting period of 7 consecutive days of wage loss prior to receiving 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 again serve the 7-day waiting period before being eligible for additional benefits. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081