Government Insurance Programs Under Federal and State Laws
Federal and state government insurance programs provide benefits to eligible individuals. While the federal government administers Social Security Disability Insurance, other insurance programs are state-run, including workers’ compensation and unemployment insurance. Eligibility, benefit amounts, and other program requirements may vary between states.
Social Security Disability Insurance (SSDI)
Social security helps the elderly, the disabled, and families in which one spouse or parent dies. The Social Security Administration provides Social Security Disability Insurance (SSDI) to help people with medical disabilities that prevent them from working.
Disability is strictly defined under the Social Security Act. A person is disabled if they cannot work due to a severe medical condition that has lasted or is expected to last at least one year, or result in death. This medical condition must both prevent them from doing work that they performed in the past and prevent them from adjusting to other work.
Workers earn coverage for benefits under SSDI by paying Social Security taxes on their earnings. In order to receive benefits, you must be disabled and have built up enough “work credits,” which depend on your age and the year you became disabled. Unlike other programs, such as workers’ compensation, SSDI does not provide temporary or partial disability benefits.
Social Security disability benefits are in the form of cash payments, with the amount based on personal earnings. Payments average $1,000 to $1,200 a month. Individuals who have collected SSDI benefits for 24 months are eligible for Medicare, regardless of their age.
State or Private Plans
An individual who does not qualify for SSDI under the federal system may nevertheless be eligible for benefits under a state system or a private plan.
Workers’ Compensation Insurance
Workers’ compensation is a state-mandated insurance program. Each state maintains its own workers’ compensation laws and programs. Some states allow employers to self-insure, as opposed to purchasing state-run workers’ compensation insurance or insurance through a commercial insurance carrier. But the type of provider does not affect a worker’s eligibility for compensation benefits.
As a form of insurance, workers’ compensation provides wage replacement and medical benefits to employees who were injured in the course of employment. In exchange, the employee gives up their right to sue the employer in court for negligence.
Not all employers are required to have workers’ compensation coverage for their employees. State laws determine requirements, based on factors including the number of employees, the type of business, and the type of work performed by employees. Exclusions also apply, and typically farm workers, domestic employees, and seasonal workers are not covered by workers’ compensation. Non-employees, such as independent contractors and volunteers, are not covered by workers’ compensation.
Workers’ compensation benefits provide payment for medical treatment and disability benefits. Medical treatment may include doctor visits, prescriptions, physical therapy, and surgery. Lost wages, or temporary disability benefits, are usually paid as a percentage of weekly wages, with the amount varying according to state law. And if you are permanently disabled from a work-related injury, you will receive compensation either in the form of a lifetime pension or a permanent impairment award.
Unemployment insurance programs provide benefits to workers who have lost their jobs and meet the eligibility requirements. States administer their own separate unemployment insurance programs, with guidelines established by federal law. State laws determine eligibility, benefit amounts, and the length of time benefits remain available. Eligible workers must also meet the requirements for wages earned and time worked during a set period of time, sometimes called a “base period.”
Contacting the state unemployment insurance agency is the first step to filing an unemployment claim. Generally, you file a claim with the state where you worked. To continue eligibility, you must file weekly or biweekly claims as well as report any job offers or refusals of work during the week.
Determinations of eligibility are typically made by the appropriate state under its law, or applicable federal laws. Benefits are based on a percentage of the individual’s earnings over a recent 52-week period, with each state setting a maximum amount. Most states provide benefits for a maximum of 26 weeks.