What happens when California State Disability Insurance claim payments run out?

It is time to find a job (if physically able) because the other alternatives are not very promising. Otherwise, it may be impossible to pay your regular bills.

Filing for an extension may work until you reach the time limit. Then you are out of luck. Collecting unemployment rarely works because of two rule conflicts, but you can try.

Long-term disability might kick in for those who bought a policy from an insurance company before they got hurt or became sick.

Applying for Social Security Disability is the best option because most people are entitled to the benefit. But, the payout is low, and the qualifications are tough to meet.

CA State Disability Exhausted: Dead Ends

Many people immediately consider two enticing alternatives after California State Disability Insurance runs out. Unfortunately, these avenues offer little help if you remain unable to work beyond the cutoff.

You can receive benefits while under the care of a doctor who certifies that you cannot perform your regular and customary work – until you reach the endpoint of your program.

  • State Disability Insurance (SDI): 52 Weeks
  • Self-Employment Elective Coverage (SEEC): 39 Weeks

Extending Benefits

Individuals can often extend California State Disability Insurance benefits after their initial claim estimate expires by completing the physician’s supplementary certificate (DE 2525XX).[1]

The DE 2525XX form is meant for people whose medical condition continues past the first anticipated time to return to work. For example, you have a baby and your doctor projects that you need eight weeks to heal from a C-section – but your recovery takes longer than expected because of an infection.

Keep in mind that you cannot extend benefits indefinitely. The claim payments end after you have been out of work for 39 (SDI) or 52 weeks (SEEC) – regardless of whether you can return to work or not. Therefore, you must find an alternative.

Collecting Unemployment

It will be tough to collect unemployment after California State Disability Insurance stops paying claims. Two nuances in the law make this avenue very challenging.[2]

  1. You must be physically able to work to qualify for unemployment benefits. You do not meet the criteria if your medical condition continues beyond the contractual 39 or 52 week period.
  2. An employee’s poor health is not listed as a good cause reason to quit under the CA unemployment law. However, your spouse may qualify because he or she needed to resign to care for a seriously ill family member.

CA State Disability Spent: Viable Options

People often have at least one and sometimes two viable options to pursue after California State Disability Insurance runs out. However, there are no guarantees. Sometimes finding suitable work is the only answer.

  • Long-term disability works for those who bought coverage before they became sick, got diagnosed with cancer, or hurt themselves in an accident
  • Social Security Disability covers more people but pays far less, and the percentage of applications approved is often meager

Long-Term

Applying for Long-Term Disability (LTD) benefits could be a viable alternative after California State Disability Insurance expires.  Many LTD plans make claim payments to age 65 while replacing up to 70% of income. However, you must have coverage already in force, and the elimination period might affect your payout amount.

You must buy a long-term policy before becoming sick or suffering a crippling injury – otherwise, the insurance company will deny any claims. The state does not provide a program covering permanent medical conditions, and a private company will not sell a new policy to someone unable to work.

The elimination period (if you have coverage) describes how many days you must be out of work before the long-term disability policy begins making claim payments. Most LTD plans will integrate benefits with SDI and SEEC until it ends. The integration (or offset) discourages malingering by capping total income replacement at 70% of prior earnings.

Elimination Period SDI – 52 Weeks SEEC – 39 Weeks
90 Days Offset 275 Days Offset 183 Days
180 Days Offset 185 Days Offset 3 Days
1 Year   Wait 92 Days
2 Years Wait 1 Year Wait 457 Days

Social Security

Applying for Social Security benefits is the avenue that helps more people after the California State Disability Insurance expires. Most individuals have coverage already in force because the government forces employees and employers to pay FICA payroll taxes. A portion of these FICA taxes goes towards the premiums needed to support this federal entitlement program.

The Social Security Disability Insurance (SSDI) qualifying criteria also fits neatly with the end date for most people. SSDI covers individuals with permanent (not temporary) medical conditions expected to last at least one year and or result in death.

  • SDI ends after 52 weeks which matches the one-year requirement exactly
  • SEEC terminates after 39 weeks leaving a 13-week overlap as SSDI begins payments after a 6 month (26 weeks) elimination period

The average SSDI recipient receives from $800 to $1,800 per month based on previous earnings, which is much lower than what either CA program pays ($5,383 monthly max in 2019). Therefore, only self-employed individuals collecting from SEEC gain from filing a claim before the end of the first year (in week 40).

Applicants waiting for SSDI approval should investigate all government-sponsored support programs such as TANF, Food Stamps, rental assistance, health insurance subsidies, and Medicaid.

You have three options to apply for SSDI in California.

  1. File a claim online at www.ssa.gov
  2. Call 1-800-772-1213 or 1-800-325-0778 (TTY)
  3. Visit a local Disability Determinations Services Office (call for an appointment first)

[1] CA EDD Extensions

[2] CA EDD Unemployment