Elective Coverage FAQs

Disability Insurance Elective Coverage (DIEC), also known as Elective Coverage (EC), is an option for self-employed individuals and employers to apply for State Disability Insurance (SDI) coverage. SDI EC coverage includes program eligibility to both Disability Insurance (DI) and Paid Family Leave (PFL) benefits.

To determine if you are a self-employed individual or employer, review the Information Sheet: Elective Coverage for Employers and Self-Employed Individuals (DE 231EC). For additional information and resources, visit the Getting Started webpage.

Yes, if you choose to apply, are approved to join, and make quarterly EC account payments, you may be eligible for benefits. EC is an option for self-employed individuals and employers to apply for coverage under SDI. SDI coverage includes DI and PFL benefits.

No, there is usually a minimum requirement of six months participation from the approved start date of your EC plan before you are eligible for benefits based on your EC contributions. However, if you worked as an employee in California for an employer who previously deducted SDI contributions for you approximately 5 to 18 months prior to your EC plan, you may have reported wage earnings in your base period, which may give you a valid claim to begin your DI or PFL leave sooner.

Yes. EC benefits are payable whether you are hurt on or off the job unless you carry workers’ compensation coverage for yourself.

Yes. You may continue to receive income or profits from your business and still be eligible for either DI or PFL benefits as long as you meet the basic eligibility requirements. Visit Am I Eligible for Disability Insurance Benefits or Am I Eligible for Paid Family Leave Benefits.

Premiums are based on the net profit you reported on 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 premium or payment is due by the last day of the month following the close of the quarter.
If your 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 fewer than two years old, the EDD may levy an assessment and collect the unpaid amount.

After choosing 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, you may contact a DIEC Customer Service Representative at 1-916-654-6288 or the Taxpayer Assistance Center at 1-888-745-3886.

You can download the following forms or call 1-916-554-7104 to have them mailed:

For more information about DI, call 1-800-480-3287 or 1-866-658-8846 (en español).

For more information about PFL, call 1-877-238-4373 or 1-877-379-3819 (en español).