California EDD Updates 2016 DI Fund Forecast

California State Disability Insurance Fund Forecast for 2016

The California Employment Development Department (EDD) has announced its May forecast for the 2016 Disability Insurance (DI) Fund.  The DI fund provides State Disability Insurance and Paid Family Leave benefits for California employees.   The 2016 employee contribution rate is expected to increase from 0.9% to 1.0%; the maximum weekly benefit is expected to increase from $1,104 to $1,144; and the taxable wage base from which DI contributions can be made is expected to increase from $104,378 to $108,160.

California employers may opt out of the state DI if a private plan, Voluntary Disability Insurance (VDI), is established and certain requirements are met.  Two of these requirements are that the employee cost of VDI cannot be more than what the employee pays for DI and the benefits paid by VDI must be at least equal to what DI would pay.  For more information about VDI, please contact The Larkin Company.

Once the DI changes for 2016 have been finalized, The Larkin Company will reach out to clients for whom we administer VDI to assist them in planning for 2016.