Protection against income loss during the first 6 months of illness or injury

This note has reviewed the protection of workers against income loss during the first 6 months of illness or injury. The national income loss due to short-term sickness and disability during the first 6 months of illness, as expressed by pre-tax wages, was about $69.6 billion in 1991. Of this amount, about $46.5 billion (66.8 percent) was replaced by income-protection programs, including paid sick leave; group insurance; temporary disability insurance, under statutory State provisions; individual insurance; workers' compensation; general assistance; and the 6th month of the Social Security Disability Insurance program. In 1991, within the private sector, wage and salary workers lost $47.2 billion because of nonoccupational illnesses or injuries, of which $17.6 billion (or 37.3 percent) was replaced. Coverage against income lost because of illness in the U.S. workforce favors full-time professional and technical employees with longer service in large or medium firms, and especially favors public sector employees. The lowest level of coverage is provided to part-time employees with limited seniority who work in production and related areas in small, private establishments. About 70 percent of wage and salary workers in the private sector have some protection through their employment against earnings losses caused by short-term illness or injury; 44 percent of these workers have short-term disability insurance, and half have sick leave coverage.