A group of small-business leaders armed with a fresh list of recommendations to boost economic development in Rhode Island said the state’s mandatory Temporary Disability Insurance could be one element among many making the state’s business climate unattractive.
But Laura Hart, spokeswoman for the R.I. Department of Labor and Training, says Temporary Disability Insurance, or TDI, paid by employees means companies don’t have to cover the expense, so it can viewed as a plus for business owners. Rhode Island was the first state in the nation to launch a TDI program in 1942, Hart said.
Even though the mandatory insurance for off-the-job illnesses or injuries has a long history, it’s time to re-examine the value of the state-run program, said Ken Block, president of Warwick-based Simpatico Software Systems and a member of the Smaller Business Association of New England, or SBANE.
“We’re looking at all the major Department of Labor and Training programs and in our initial research, we determined Rhode Island is one of only a few states that mandate Temporary Disability Insurance,” said Block, who wants to see the program’s costs to workers compared to what other states offer.
A working group of SBANE members developed an economic-recovery plan for Rhode Island and has been making the rounds to present it to state leaders. The “low-hanging fruit” to improve the state’s business climate, including regulations often under the radar such as TDI, is among initial suggestions in a five-year plan, Block said.
“We need systemwide changes if we want businesses to come set up shop here,” he said.
Even though TDI may be a small factor hampering the state’s ability to attract business, Block said the mandate hits hard on middle-class employees who have it deducted from their paychecks.
“Many states leave it to the employee to choose and they have a marketplace to choose from,” said Block about disability insurance for injuries outside the workplace. Workers’ compensation covers on-the-job injuries.
Other states that have TDI programs include New York, New Jersey, California and Hawaii, as well as the Commonwealth of Puerto Rico, Hart said.
“One of the reasons so few states have it is the initial cost of implementing the program,” said Raymond Filippone, assistant director of income support for the Department of Labor and Training.