FAQs – Elective Coverage
Elective Coverage is an option for self-employed individuals and employers to apply for coverage under State Disability Insurance (SDI). SDI coverage includes Disability Insurance and Paid Family Leave benefits. A self-employed individual or employer is someone who works for themselves, such as an independent contractor. For more information see the Information Sheet: Elective Coverage for Employers and Self-Employed Individuals (DE 231EC) (PDF).
Yes, you may be eligible for benefits if you pay into Disability Insurance Elective Coverage (DIEC). DIEC is an option for self-employed individuals and employers to apply for coverage under State Disability Insurance (SDI). SDI coverage includes Disability Insurance and Paid Family Leave benefits. A self-employed individual or employer is someone who works for themselves, such as an independent contractor. For more information, see the Information Sheet: Elective Coverage for Employers and Self-Employed Individuals (DE 231EC) (PDF).
- I just started paying into my Elective Coverage plan. If my disability begins tomorrow, am I covered? Am I covered if I have a family care need tomorrow?
There is usually a minimum of six months from the effective date of your Elective Coverage (EC) plan before you are eligible based on EC contributions. However, if you worked as an employee in California approximately 5 to 18 months prior to your EC plan, you may have wage credits in the base period, which may give you a valid claim.
Yes. Disability Insurance Elective Coverage benefits are payable whether you are hurt on or off the job unless you carry workers’ compensation coverage for yourself.
- I’m collecting benefits under my Elective Coverage plan. If I continue to receive income from my business, will State Disability Insurance still pay me?
Yes. You may continue to receive income or profits from your business and still be eligible for Disability Insurance (DI) and Paid Family Leave (PFL) benefits as long as you meet the basic DI and PFL eligibility requirements. Visit Am I Eligible for Disability Insurance Benefits or Am I Eligible for Paid Family Leave Benefits.
The Application for Disability Insurance Elective Coverage (DE 1378DI), as well as the Information Sheet: Elective Coverage for Employers and Self-Employed Individuals (DE 231EC) can be downloaded or ordered from the Taxpayer Assistance Center at 1-888-745-3886.
Premiums are based on the net profit you reported on Internal Revenue Service (IRS) Form 1040 Schedule SE for the previous tax year. Life insurance salespersons who are not required to file a Schedule SE should use the net income from IRS Form 1040 Schedule C (line 31) in place of Schedule SE net profit to compute the annual premium. For 2020, the annual premium rate is 5.25 percent of the amount reported as net profit up to $122.909, the taxable wage ceiling for State Disability Insurance contributions. The rate is evaluated and recomputed each calendar year on or about November 30.
You are sent a statement at the end of each quarter showing the amount due for the quarter. Your payment is due by the last day of the month following the close of the quarter.
- If I have a disability begin, will I still need to pay my Elective Coverage premiums? What if I am bonding with a new child or providing care to a seriously ill family member?
Premiums may be adjusted if you have a disability or take time off work due to a family care need for a full or partial quarter. For additional information, contact your local Employment Tax Office.
If your Elective Coverage (EC) plan is more than two years old and your premiums are not paid by the delinquency date shown on your quarterly statement, a delinquency notice may be issued by the EDD. Penalties and interest will be added. You have 30 days to submit your EC payment. If payment plus penalty and interest is not received within 30 days of the date shown on the delinquency notice from the EDD, your EC coverage may be canceled. If your plan is less than two years old, the EDD may levy an assessment and collect the unpaid amount.
- I am delinquent on my Elective Coverage premiums and have just become unable to work due to a disability or family care need. Will you still pay benefits?
No. Benefits will not be paid if your Elective Coverage account is delinquent or unpaid.
After choosing Elective Coverage (EC), you must stay in the plan for two full years. After that, if you wish to cancel your coverage, submit your cancellation request during the month of January. Cancellation will be effective January 1.
To continue your EC eligibility, you must show a minimum profit of $4,600 per year. If your profits fall below this level for three consecutive years, the EDD may cancel your coverage.
For more information about the EC program, call 1-916-654-6288. If you would like an Application for Unemployment Insurance (UI) and Disability Insurance (DI) Elective Coverage for Employees Exempted Under the California Unemployment Insurance Code (CUIC) (DE 1378), Application for Unemployment Insurance, Disability Insurance, and Paid Family leave Elective Coverage Under Section 708(a) of the Unemployment Insurance Code (DE 1378A), or Application for Disability Insurance Elective Coverage (DE 1378DI), visit our Online Forms and Publications page or call 1-916-554-7104.
For more information about DI call 1-800-480-3287 or 1-866-658-8846 (en español).