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History of Disability Income Plan of North Carolina Employer Reimbursements

​Employers participating in the Disability Income Plan of North Carolina (DIPNC) may have questions about the recent legislation regarding short-term disability benefits that begin on or after July 1, 2019. After that date, employers will no longer be reimbursed for the second six months of short term disability benefits.

Please see the summary below and this chart for an analysis of the DIPNC employer reimbursements for costs incurred during the second six months of the short‐term disability benefit period as provided for in G.S. 135‐105(d). This analysis is unaudited and provided for informational and budget planning purposes only and is based solely on data transmitted by employing agencies to the Retirement Systems Division during fiscal years 2014 through 2018.

In Session Law 2018‐52, the Financial Accountability, Integrity, and Recovery Act, the General Assembly amended the state’s short‐term disability employer reimbursment policy. Currently, employers are reimbursed for the cost of providing the disability income payments and health insurance premiums to eligible employees from the DIPNC trust fund during the second six months of the short‐term disability benefit period. This legislative change halts those reimbursements of employers for short‐term disability benefits that begin on or after July 1, 2019.

The actuarial note filed with the legislation indicated that it may be possible to reduce the DIPNC employer contribution rate beginning in FY 2020 to adjust for the elimination of the reimbursements. The employer contribution rate for DIPNC is typically set in the state budget bill each year.

 

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