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ability and for unemployment insurance. While the New Jersey plan has no "benefit year," minimum and maximum benefits in any 12month period are determined on the same basis as in unemployment insurance. All four statutes are administered by the unemployment insurance agencies, and thus use the same administrative machinery for collecting contributions, for maintaining wage records, and for staff services for both programs. Obviously, because disability rather than availability for work must be demonstrated by the claimant, the claims procedures are markedly different.
Benefits have been payable in Rhode Island since April 1, 1943, in California since December 1, 1946, and under the railroad system since July 1, 1947. In New Jersey, benefit payments will begin on January 1, 1949.
The most distinctive difference among the four programs is the provision in the California and New Jersey plans for a State-supervised system of private voluntary plans which may be substituted for the State-operated plan. (See appendix IV-D, table 1, for comparison of the four temporary disability laws.) The voluntary plans, however, must fulfill certain requirements specified in the respective statutes. The California law requires that a private plan must afford more favorable rights to the employees it covers than are afforded by the State plan, at no greater cost to the employees; the plan must be available to all employees, must be accepted by a majority, and must not result in a substantial selection of risks adverse to the State fund. The New Jersey requirements differ in that the rights afforded under the private plan must at least equal those under the State plan, at no greater cost to the employees; if a majority of the workers in a plant accept a private plan, all the workers of that plant must be covered under it rather than under the State plan; and there is no other provision against adverse selection. Both laws contain other requirements designed to assure that the benefits promised by the private plans will actually be paid.
Voluntary private plans may be either self-insured by the employer or carried by a properly qualified insurance company. If a plan is approved as meeting the requirements of the State law, the employees covered by it receive their disability benefits under the voluntary plan and are exempted from paying contributions to the State fund. On June 30, 1948, there were over 10,000 employers with approved voluntary private plans in effect in California (5 percent of the covered employers), which covered about 765,000 workers or 32 percent of the total number covered by the unemployment insurance and disability
Benefits under the State-operated systems in California and Rhode Island (which has no provision for the substitution of private voluntary plans for the State system) are financed exclusively by employee contributions of 1 percent of wages up to $3,000. In New Jersey, benefits under the State-operated system are financed by an employee contribution of 0.75 percent and an employer contribution of 0.25 percent. The current contribution rate for the railroad temporary disability insurance system and unemployment insurance is 0.5 percent levied on employers. In all four laws, the weekly benefit amount is determined according to a schedule and related to previous wages; in Rhode Island the amount ranges from $6.75 to $18; in California from $10 to $25; in New Jersey from $9 to $22; and under
the railroad system the amount for a 2-week period ranges from $17.50 to $50. The maximum duration of benefits ranges from 3 to 20 weeks in Rhode Island, from 10 to 26 weeks in California, and from 10 to 26 weeks in New Jersey, depending on the amount of base-period wages. The railroad system provides a uniform potential duration of 26 weeks.
The New Jersey law actually provides three systems, one for workers unemployed when they get sick, one for those who are employed and not covered by private plans, and a third for those covered by private plans. For those employed at the time the disability begins, the weekly benefit amount is computed for the period of disability, and the maximum and minimum benefits mentioned above apply to any 12-month period. The individual is considered disabled when he is unable to perform the duties of his current job. The worker who is unemployed when he becomes disabled, however, must be unable to perform any work for remuneration if he is to be eligible for disability benefits
. Moreover, he must have established a benefit year by a claim for unemployment benefits and must have served the 1-week unemployment insurance waiting period.
Disability due to pregnancy is treated quite differently under the four laws. "Rhode Island considers pregnancy a disability whenever a woman is not working during pregnancy; maximum benefits for any one pregnancy, however, are limited to 15 weeks, except for unusual complications, and may be less, depending upon the amount of baseperiod wages. Under the New Jersey law, on the other hand, no payments are made for periods of disability due to pregnancy. California will pay for periods of disability lasting more than 4 weeks after the termination of pregnancy. The railroad act provides separate maternity benefits which are in addition to the ordinary duration of benefits; the maternity benefits are paid for 16 weeks, beginning 8 weeks prior to the anticipated date of confinement.
Temporary disability insurance is intended to protect against wage loss due to nonoccupational disability and is not a replacement for workmen's compensation, which continues to bear the costs of workconnected injury and disease. The existing laws provide for varying methods of coordination between the two programs. Rhode Island is the most liberal, permitting the payment of both types of benefits up to a weekly total of 90 percent of the weekly wage rate before the disability.
In June 1948, about 5.5 million workers (of the 34.3 million workers covered by unemployment insurance laws) were covered under the 4 existing laws for temporary disability insurance, 4.2 million of them under the 3 laws which had been paying benefits for at least 12 months on June 30, 1948.
During the year ended June 30, 1948, more than 50.3 million dollars was paid in temporary disability insurance benefits, with 50,700 disabled workers receiving benefits in an average week. Of the total benefit expenditures, 26.6 million dollars was paid to railroad workers-0.56 percent of taxable railroad wages. The California State plan paid out 19.4 million dollars—0.41 percent of the wages taxed under the State plan; an additional 56,000 spells of disability were compensated by approved private plans. Rhode Island benefits were 4.3 million dollars-0.78 percent of taxable wages. (See appendix
IV-D, table J, for summary of operations of California, Rhode Island, and railroad programs.)
During the year, there were three railroad sickness beneficiaries for every four unemployment insurance beneficiaries in the same period. In Rhode Island, there were two temporary disability insurance beneficiaries in an average week for each five unemployment insurance beneficiaries, while under the California State plan, disability accounted for only one beneficiary in an average week for every seven beneficiaries for unemployment insurance. These variations can be explained in terms of variations in the unemployment rates and in the characteristics of the covered groups, as well as differences in statutory provisions. Unemployment has been very low in the railroad industry during the past few years, while the ratios of insured unemployment to covered workers in California and Rhode Island have been among the highest in the country. Moreover, the average age of railroad workers is much higher than the average age of workers covered by a State law. The high proportion of women in the Rhode Island covered group, combined with the provision for benefits in cases of pregnancy, increased the number of Rhode Island beneficiaries.
Various methods have been suggested by interested groups to provide temporary disability insurance for workers in all States. posals differ on such points as whether the program should be established by State legislation, Federal legislation, or a combination of both. Further, the various proposals differ in respect to the administrative agency that would be responsible for the program. Among these proposals are those that would (1) integrate temporary disability insurance and unemployment insurance, (2) integrate temporary disability insurance and permanent and total disability insurance with old-age and survivors insurance, (3) provide only for State-supervised private plans, and (4) integrate temporary disability insurance with medical care insurance.
The proposal to integrate temporary-disability insurance with unemployment insurance has had considerable acceptance. As has been noted above, all four of the existing temporary-disability programs are closely linked with the unemployment-insurance programs. The Congress in 1946 enacted legislation to permit employee contributions collected by the States for unemployment-insurance purposes to be used to support State temporary-disability-insurance systems. Most of the bills for temporary-disability insurance that have been introduced in State legislatures would provide for the integration of the
The proponents of this method of affording protection to workers point to the economy to be derived from using the same administrative machinery and similar substantive provisions for both programs. In general, these proponents also recognize that a temporary-disability insurance program poses some problems that are not common to unemployment insurance and would therefore require certain special provisions, procedures, and staff to meet these problems. It has been argued that, for both programs, coverage could be afforded the same workers; the same covered wages and pay rolls could be used as a basis for contributions; and even if the benefit formula were somewhat different for temporary-disability insurance, the same wage credits could serve as a basis for benefits under both programs.
Although proponents for integration of these two programs may agree on the desirability of such action, sharp differences of opinion are expressed among them on the degree of responsibility for the temporary-disability system that should be vested in the State unemployment-insurance agency. Some advocate an exclusive State system, while others advocate a State-operated system, plus substitute State-supervised private plans. As has been noted above, the first type of system has been adopted by Rhode Island, and the second by California and New Jersey. Those who advocate an exclusively Stateoperated system argue that pooling all risks on a State-wide basis results in a higher level of benefits (or lower contributions) than if the risks were shared with private plans, since the latter would not cover poor risks. Further, it is claimed that, when any private plan proves unprofitable, the group covered by such a plan is eventually turned over to the State-operated system. The proponents of an exclusively State-operated system also point out that a State agency, unlike insurance companies engaged in the business of insuring workers under a private plan, earns no profit and incurs no sales cost; so that, if the State system is permitted to insure all eligible workers, the proportion of contributions available for benefit payments is larger than under any other system. Recognition of private plans, it is argued, will also add to administrative problems because of the need for review and supervision of these plans and the need to assure continuity of coverage and prevention of duplicate payments to workers moving from one type of plan to another.
Those who favor a State-operated system plus substitute Statesupervised private plans emphasize that all eligible workers acquire protection, either under the State-operated program or under substitute private plans approved by the State supervisory agency. They claim that this type of system, whereby the employees and employer may choose between the public or private plans, provides a high degree of flexibility and avoids freezing benefits at a statutory minimum level. Workers who are now covered by generous private plans could retain that coverage if the employer agreed and the State agency approved, thereby avoiding the need to transfer many workers to a system paying lower benefits. Similarly, private plans with provisions more liberal than those offered by the State law could be adopted if employers and employees desired and were able to pay for better protection, and employers would have a more direct interest in the plan. The advocates of this type of system also claim that competition between a Stateoperated plan and private plans stimulates more economical and efficient administration of both plans.
Proponents for integration of temporary-disability insurance and unemployment insurance disagree on the role of the Federal Government in such a program. Some advocate complete federalization of both unemployment and temporary-disability insurance; others say that the program should be exclusively a State responsibility; while many other types of action advocated fall between
these two extremes. Those who favor Federal action argue that the Federal Government has as vital an interest in protecting the workers of the country against the loss of income from disability as it has in seeing that they are covered by unemployment insurance. They argue that, if workers in all States are to get this additional protection within the foreseeable future, Federal action will be needed; and they cite the delay of 37 years in obtaining workmen's compensation in all States as compared with the 2-year period required to obtain unemployment insurance on a Nation-wide basis.
A number of the alternatives for Federal action short of complete federalization are listed below:
1. The Federal Government might pay the administrative expenses of State temporary-disability-insurance systems in the same manner as it now pays such expenses for unemployment insurance.
2. The Federal Government might go further and permit the use of State accounts in the unemployment trust fund to finance State systems of temporary-disability insurance under adequate safeguards for the solvency of the funds.
3. The Federal Government might make the establishment of a disability program a condition for the continued receipt of the tax offset under the present tax on employers for unemployment insurance.
4. The Federal Government might extend the Federal-State device used in unemployment insurance by levying a Federal tax for temporary-disability insurance.
Those who advocate the integration of temporary-disability and unemployment insurance under State laws, without any Federal legislative action, claim that State-Federal programs result in at least some control over the State agencies administering the programs; that such control sometimes makes it impossible for a particular State to use the best methods of meeting problems that are peculiar to the State; and that even limited Federal responsibility sometimes stifles Staté initiative and experimentation, which are especially important in developing sound programs in a relatively new area of the social-security field.
The proposal to integrate a temporary disability program and a permanent-and-total-disability program with old-age and survivors insurance has received considerable attention in recent months. The proponents of this plan cite the economy to be obtained from using the Nation-wide old-age and survivors insurance administrative machinery for payment of benefits and collection of contributions for a disability program, and
the convenience to the public in having one field office for the filing of claims and the handling of wage questions for the three programs. They claim that only under a Federal program would workers have uniform protection against the loss of wages from illness regardless of State of residence or employment. These proponents also contend that, since temporary-disability insurance and permanent-and-total-disability insurance both need to establish disablement, the special staff and special procedures required for determining medical disability in one program could be utilized for the other. If the two disability programs were not integrated, much duplication of staff and procedures would be necessary. Furthermore, these proponents claim that, because many of the persons who will become eligible for permanent-and-total-disability benefits will first be eligible for temporary-disability benefits, a single administrative agency would be able to emphasize rehabilitation service for disabled persons at the earliest possible time instead of delaying such service until a claimant has become a beneficiary under the permanent-andtotal-disability program. Similarly, it is claimed that integration of