DE 8714CC - Employment Development Department

DISABILITY INSURANCE ELECTIVE COVERAGE PROGRAM (DIEC)California’s Disability Insurance Elective Coverage (DIEC)program provides benefi ts to eligible business ownersand self-employed individuals suffering a loss of incomewhen they are unable to perform their usual work due toillness, injury, or pregnancy.BackgroundThe DIEC program was created by the California StateLegislature in 1962. California became the only state tooffer a state-sponsored disability insurance program tobusiness owners and self-employed individuals on anelective basis.Today this program serves as a safety net to thosesmall business owners, entrepreneurs, or self-employedindividuals who make up a large portion of companiesdoing business in California.Who Can Elect to be Covered by DIEC?Any self-employed individual who receives the majorpart of his or her income from the trade, business, oroccupation in which he or she is self-employed may electto be covered by DIEC.Individual proprietors and general partners are eligible toapply for coverage. It is not required that all active generalpartners be included in the election. A general partnershipalso includes a husband and wife co-ownership in whichboth spouses are active in the operation and managementof the business. Limited partners and corporate officersare not eligible since they are considered to be employeessubject to the mandatory provisions of the CaliforniaUnemployment Insurance Code (CUIC).Major RequirementsThere are major requirements that must be met in orderto participate in the DIEC program:• Must own a business or be self-employed.• Must have a minimum income of $4,600 annually.• Must possess a valid active license, if required by theoccupation.• Must be able to perform all normal duties on a fulltimebasis at the time the application is submitted.• Must derive the major portion of income from thetrade, business, or occupation.• The business cannot be seasonal.• Must remain enrolled in the DIEC program fortwo complete calendar years unless an individualdiscontinues their business or moves out ofCalifornia.Eligibility and BenefitsDIEC benefits are payable when a participant cannotwork due to illness, injury, or pregnancy. Benefi ts arepayable for a maximum of 39 weeks.To receive benefi t payments, applications for electivecoverage must be approved before individuals becomedisabled. Also, individuals must:• File a claim in accordance with regulations.• Serve a 7-day nonpayable waiting period.• Have paid contributions for at least one quarterduring the 12-month base period of the claim.Generally, a minimum of 6 months must elapse fromthe effective date of coverage before a valid claimmay be fi led based solely on this election.• Submit to a reasonable medical examination,if required.• File a certifi cate of disability signed by a dulyauthorized medical or religious practitioner.Claims are filed by mail and benefi ts are generally paidevery two weeks.P.O. Box 826880 • Sacramento CA 94280-0001DE 8714CC Rev. 19 (12-11) (INTERNET) Page 1 of 2 CU

What is the Cost?Premiums are based on net profit reported on InternalRevenue Service (IRS) Schedule SE. Each quarter,one-fourth of this amount is reported as “wages.” Premiumsare calculated at a percentage of these “quarterly wages.”If the participant becomes disabled for a portion of thequarter, premiums may be reduced.The DIEC rate is evaluated and computed on or beforeNovember 30 of each calendar year to ensure programsolvency.The state makes no revenue on this plan. Therefore,premiums are based on benefits paid and administrativecosts.DisqualificationsThe DIEC program is committed to program integrity andwill take all possible measures to detect and deter fraudand protect benefi ts.No disability insurance payments can be made to personswho willfully make false statements or withhold materialfacts to gain benefi ts.A disabled participant is also ineligible for disabilitybenefits:• If coverage has been terminated prior to becomingdisabled (there is no vested interest).• When in legal custody as the result of a conviction,or when confi ned by a court order.AppealsAll participants have the right of appeal to animpartial Administrative Law Judge (ALJ) concerningdeterminations of eligibility or benefit amounts. Furtherappeal from an ALJ’s decision may be fi led with theUnemployment Insurance Appeals Board, or the Boardmay set aside the ALJ’s decision on its own motion.Decisions of the Board may be reviewed by the courts.Social SecurityIf a person is permanently disabled, he or she shouldcontact the Social Security Administration for informationabout benefi ts under its programs. For additionalinformation, call the Social Security Administration at1-800-772-1213.Paid Family LeavePersons covered by DIEC are also automatically coveredby Paid Family Leave (PFL) insurance. PFL benefi ts areavailable to persons who take time off work to care for aseriously ill child, spouse, parent, or domestic partner or tobond with a new child. (Please see the Paid Family LeaveFact Sheet, DE 8714CF, for further information.)For More InformationFor additional information on the DIEC program, visitEDD’s Internet site at www.edd.ca.gov, contactyour nearest Disability Insurance offi ce, listed under“Employment Development Department” in the StateGovernment section of your telephone directory or callthe DIEC Unit at 916-654-6288.• If the participant is no longer in business.• If a quarterly contribution return is delinquent.The EDD is an equal opportunity employer/program. Auxiliary aids andservices are available upon request to individuals with disabilities.DE 8714CC Rev. 19 (12-11) (INTERNET) Page 2 of 2