California Code of Regulations › Title 22 - Social Security › Division 1 - Employment Development Department › Subdivision 1 - Director of Employment Development › Division 1 - Unemployment and Disability Compensation › Part 2 - Disability Compensation › Chapter 6 - VOLUNTARY PLANS › Section 3254-3 - Termination of Coverage Under a Voluntary Plan

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Coverage under a voluntary plan may be
						terminated prior to commencement of a period of disability by any one of the
						following conditions:
(1) Termination of the
						voluntary plan by the director in accordance with the provisions of Section
						3262 of the code and Section
						3262-1 of these
						regulations.
(2) Withdrawal of the
						voluntary plan by the employer or a majority of its employees in accordance
						with the provisions of subdivision (g) of Section
						3254 or subdivision (g) of Section
						3255 of the code.
(3) Cancellation of the voluntary plan by an
						admitted disability insurer in accordance with the provisions of Section
						3262-2 of these
						regulations.
(4) Withdrawal from
						the voluntary plan by a covered employee in accordance with the provisions of
						subdivision (g) of Section
						3254-2 of these regulations or
						subdivision (a) of Section
						3271 of the code and subdivision
						(b) of Section
						3271-1 of these
						regulations.
(5) Termination of the
						employer-employee relationship. Except when subdivision (b) of this section
						applies, "termination of the employer-employee relationship" means that
						employment ceases with no mutual expectation or intention to continue the
						working relationship. Reasons for termination of the employer-employee
						relationship include, but are not limited to, separation, dismissal,
						resignation, and retirement.
EXAMPLE 1. Separation. A, an operating engineer, leaves
						  work at the close of the shift on Friday when A and other members of A's crew
						  are informed by the employer that their services are no longer needed because
						  the job is in the course of being completed. For any new projects the employer
						  will request a general union dispatch of union members. A is paid in full on
						  that day. On Sunday A is in an automobile accident. A files a disability claim
						  with the voluntary plan.
A's disability and inability to perform regular or
						  customary work is not in dispute. However, the employer had terminated the
						  employment relationship with A prior to commencement of the period of
						  disability, and disability benefits are payable from the Disability Fund rather
						  than under the voluntary plan.
EXAMPLE 2. Dismissal. Given a written notice of
						  dismissal in the middle of B's shift, effective immediately, because B objected
						  to performing a "rush job" and because B had consistently taken too much time
						  to perform assignments. B's request to retain B's job is rejected. On the next
						  day B files a disability claim with the voluntary plan for indefinite
						  complaints and nervous instability.
The employer terminated the employment relationship
						  with B on a day when B would have continued to perform regular or customary
						  work had B not been dismissed. If B establishes a disability and inability to
						  perform regular or customary work, disability benefits are payable from the
						  Disability Fund rather than under the voluntary plan.
EXAMPLE 3. Resignation. C is employed full time and
						  also enrolled in several courses at a local university. C voluntarily resigns
						  C's employment to concentrate on C's education with a full program of study.
						  During the period of employment C was under frequent medical treatment for
						  infectious eczematoid dermatitis but lost no time from work. Within two weeks
						  of terminating employment C's condition worsens and C withdraws from school for
						  intensive treatment in a hospital. C files a disability claim with the
						  voluntary plan.
C's disability and inability to perform regular or
						  customary work is not in dispute. However, C voluntarily terminated the
						  employment relationship with the voluntary plan employer prior to commencement
						  of the period of disability. If C can establish an attachment to the labor
						  market, disability benefits are payable from the Disability Fund rather than
						  under the voluntary plan.
EXAMPLE 4. Retirement. D, a janitor, seventy years of
						  age, retires because D wishes to take a well-earned rest and because D feels
						  the job is getting too heavy for D's age. D has not seen a doctor for
						  approximately one year prior to the termination of employment. D plans to seek
						  lighter work. Within two weeks of terminating employment D contracts pneumonia
						  and files a disability claim with the voluntary plan.
D's disability and inability to perform regular or
						  customary work is not in dispute. However, D voluntarily retired and terminated
						  the employment relationship prior to commencement of the period of disability.
						  If D can establish that D remains attached to the labor market, disability
						  benefits are payable from the Disability Fund rather than under the voluntary
						  plan.
(6) Leave of absence
						without pay or a layoff without pay if the leave or layoff extends for a period
						of fifteen (15) full days before the period of disability commences. Except
						when subdivision (b) of this section applies, "leave of absence" and "layoff"
						mean that something other than a permanent termination of the employment
						relationship is indicated at the time an individual's work comes to an end, or
						the employment ceases because of factors beyond the employee's or the
						employer's control. A leave of absence from work is granted by the employer for
						many reasons. Reasons for a layoff include the following:
(A) Temporary disciplinary action.
(B) Lack of work. The term "lack of work"
						indicates termination of employment because the commodity or activity provided
						by the business is no longer in sufficient demand to require the services of
						the individual, however the individual would be subject to recall if more work
						developed; or because an on-call employee who accepts temporary assignments is
						laid off at the completion of an assignment with the expectation that another
						assignment will be provided in the future.
(C) Material shortage. The term "material
						shortage" indicates the lack of some component necessary to make a final
						product, i.e., in a steel mill--lack of coal, ore, etc.; in a cannery--lack of
						the products being canned, cans, etc.; in the automotive industry--lack of
						steel, parts, etc.
(D) Season of
						activity ends. The term "season of activity ends" indicates termination of
						employment because of the seasonal nature of the work, i.e., lumbering ceases
						because of weather; canning stops because crop not in season; fishing stops
						because the fish run ends; track closes because racing seasons ends.
EXAMPLE 1. Leave of Absence. A is granted an
						  indeterminate leave of absence without pay in order to assist in the care of a
						  sick daughter and because A is "worn out" caring for the daughter while also
						  working. On the fifteenth day following the last day of work A is severely
						  injured in an automobile accident and files a disability claim with the
						  voluntary plan.
A day is defined in Section
						  125-1 of these regulations as the
						  24-hour period beginning at midnight and ending the following midnight.
						  Therefore, a disability which occurs on the 15th day after leaving work is not
						  one that occurred 15 full days after the last day worked. Disability benefits
						  are payable under the voluntary plan.
EXAMPLE 2. Layoff Due to Lack of Work. B, an
						  out-of-doors pipe tester, is laid off without pay because work was slow on
						  account of the weather. B checks with the employer several times in the
						  following week but no work was available. Subsequently B is terminated as of
						  the last day worked when B does not contact the employer for thirty days. B
						  files a disability claim with the voluntary plan because B was admitted to a
						  hospital, suffering from acute alcoholism, on the fifteenth day following the
						  last day of work.
A day is defined in Section
						  125-1 of these regulations as the
						  24-hour period beginning at midnight and ending the following midnight.
						  Therefore, a disability which occurs on the 15th day after leaving work is not
						  one that occurred 15 full days after the last day worked. Disability benefits
						  are payable under the voluntary plan.
EXAMPLE 3. Layoff on On-Call Employee. C works through
						  a temporary employment agency. For the past two years C as been working "pretty
						  steady" on assignments provided by this agency. There have been periods of
						  employment and indefinite periods of unemployment. C completes an assignment
						  and is laid off without pay until such time as another assignment may be
						  available. On the fifteenth day following the last day of work C is severely
						  injured in a motorcycle accident and files a disability claim with the
						  voluntary plan.
A day is defined in Section
						  125-1 of these regulations as the
						  24-hour period beginning at midnight and ending the following midnight.
						  Therefore, a disability which occurs on the 15th day after leaving work is not
						  one that occurred 15 full days after the last day worked. Disability benefits
						  are payable under the voluntary plan.
EXAMPLE 4. Layoff Due to Material Shortage. D, a fish
						  cannery worker, is laid off without pay because fishing has been poor. D is
						  subject to recall to work at any time until the fish packing season officially
						  ends. On the fifteenth day following the last day of work D has a congestive
						  heart failure and files a disability claim with the voluntary plan.
A day is defined in Section
						  125-1 of these regulations as the
						  24-hour period beginning at midnight and ending the following midnight.
						  Therefore, a disability which occurs on the 15th day after leaving work is not
						  one that occurred 15 full days after the last day worked. Disability benefits
						  are payable under the voluntary plan.
EXAMPLE 5. Layoff Due to End of Season. E, a laborer
						  for a fruit packing company, is laid off without pay at the close of the
						  season, and there will be no more work for E until the commencement of the next
						  season in nine months. Under the collective bargaining agreement in force
						  between E's union and the employer, E has employment rights based upon
						  seniority. E immediately seeks other work as a laborer although employment
						  opportunities are scarce in the small community. On the fifteenth day following
						  the last day of work E fractures a femur and files a disability claim with the
						  voluntary plan.
A day is defined in Section
						  125-1 of these regulations as the
						  24-hour period beginning at midnight and ending the following midnight.
						  Therefore, a disability which occurs on the 15th day after leaving work is not
						  one that occurred 15 full days after the last day worked. The employer-employee
						  relationship had been merely suspended rather than terminated. Benefits are
						  payable under the voluntary plan.