What is TDI?
The Hawaii Temporary Disability Insurance Law was enacted in 1969, which requires employers to provide partial “wage replacement” insurance coverage to their eligible employees for non-work related sickness or injury (including pregnancy). This means that if an employee is unable to work because of an off the job sickness or injury and that employee meets the qualifying conditions of the law, the disabled employee will be paid disability or sick leave benefits to partially replace the wages lost. TDI does not include medical care.
To be eligible for TDI benefits, an employee must have at least 14 weeks of Hawaii employment during each of which the employee was paid for 20 hours or more and earned not less then $400 in the 52 weeks preceding the first day of disability. The 14 weeks need not to be consecutive nor with only one employer. The employee must also be in current employment to be eligible.
Some employees are excluded from coverage such as the employees of the federal government, certain domestic workers, insurance agents and real estate salespersons paid solely on a commission basis, individuals under 18 years old in the delivery or distribution of newspapers, certain family employees, student nurses, interns and workers in other categories specifically excluded by the law.
Contact us on how we can help you establish your TDI plan.
An employer may adopt one or more of the following methods of providing TDI benefits:
- By purchasing insurance, called an “insured” plan from an authorized insurance carrier.
- By adopting a sick leave policy, called a “self insured” plan, which must be approved by the state. As a self-insurer. The employer, must show proof of financial solvency and ability to pay benefits by:
- Furnishing the state with the latest audited financial statements for review. Following the initial approval, the audited financial statements must be submitted annually for continued approval of the self-insured plan,
- Depositing Securities, or
- Posting surety bonds in an amount determined pursuant to sections 12-11-69 and 12-11-70, Hawaii Administrative rules.
- By a collective bargaining agreement that contains sick leave benefits at least as favorable as required by the TDI law. All self-insured plans must be submitted to the State for review and approval before being put into effect.
As for the benefits, the employers plan determines how much benefit the employee will receive each week, how long the employee will be paid and whether the employee has to serve a waiting period.
- If the employer has a statutory plan, the employee is entitled to disability benefits from the eighth day of disability for a maximum of 26 weeks, at 58% of the employee’s average weekly wages up to the maximum weekly benefit annually set forth by the state.
- If the employer has a sick leave plan which differs from the statutory benefits and has been approved by the state as an equivalent or better than statutory plan, your weekly benefit amount, duration of payments, and whether or not a waiting period is required will be determined by the plan.
As for the cost of providing TDI coverage, the employer may pay for the entire cost or share the cost equally with the eligible employees for coverage.
The law requires that a claim be filed within 90 days from the date of disability. If claim filed after 90 days, the employee may lose part of the benefits unless good cause can be shown. If claim filed more then 26 weeks after disability, the employee will not be entitled to any benefits. To avoid partial or complete loss of benefits, file the claim within 90 days.
An employer or insurance carrier is required to send the employee written notice if the claim is denied. If the employee disagrees with the denial, the employee may appeal by explaining why he or she disagrees on the notice and send two copies to the state. The employee has 20 calendar days from the mailing date of the denial notice to appeal.