• California Short Term Disability
• Short Term Disability Work Laws

Any short- or long-term disability benefit provided to an employee is separate from an employer’s obligations under the federal FMLA and other state leave laws. An employee who is eligible for STD benefits while on federal FMLA leave does not receive any extra leave benefits. California requires all employers, other than public agency employers, to provide short-term disability coverage. The State Disability Insurance (SDI) program is a state-run plan administered by the Employment Development Department (EDD). The program is funded by taxes withheld from employees' wages up to the annual SDI taxable wage base. Different types of illnesses or injuries can lead to a short-term disability claim. Some of the more common reasons for filing include pregnancy, injuries and digestive and intestinal diseases. Short-term disability insurance Our short-term disability product includes features to help employees return to work. With a variety of standard and optional benefits, our plans are available with benefit.

Caring for Your Physical Health

Physical health is essential to overall wellness. We encourage employees to adopt healthy habits and behaviors that will enhance the enjoyment and quality of life. We offer employees a competitive benefits plan with incentives, healthy eating seminars, and corporate discounts on bike shares and weight-loss programs as well as free onsite fitness centers. Health management benefits are also extended to employee dependents.

Health, Dental and Vision Plans

BCBSA offers a variety of medical plans to meet our employees' needs and budgets. These include dental and vision plans, as well as a prescription drug program.

Ensuring Your Financial Health

Making good financial decisions is a key to success and stability. That's why we offer our employees a range of financial wellness programs, including online resources, discounted financial planning and financial education workshops.

Disability Insurance

Life is unpredictable. BCBSA offers the following disability insurance options to help our employees protect their financial well-being in case of an unexpected illness or injury:

• Short-term disability
• Long-term disability
• May purchase additional long-term disability coverage amounts

Life Insurance

BCBSA offers a variety of medical plans to meet our employees' needs and budgets. These include dental and vision plans, as well as a prescription drug program.

Who will protect and support your family if you are gone? Life insurance provides an answer to that question. We offer our employees the following options for life insurance coverage^*:

• Basic term life at no cost
• Buy-up options available
• Matching amount of Accidental Death and Dismemberment
• Option to purchase supplemental group universal life insurance for self and/or dependent

* Employee may need to satisfy evidence of insurability.

Business Travel Insurance

Our company-paid program provides life insurance (equal to 2x employee salary) if an employee should pass away while traveling on BCBSA business.

Maintaining General Well-Being

Having time for family, friends and activities beyond work is an important component of a rich and fulfilling life. At BCBSA, we support the social and emotional lives of our employees with the following programs.

Balancing Work and Life

We provide paid time away from the office to relax and recharge, and support our employees who welcome a new child into their family or have military commitments.

• Paid Time Off (PTO)
• Paid Holidays
• Military Leave
• Maternity/Paternity Benefit

Events and Activities

BCBSA helps support the social and emotional well-being of employees by providing opportunities to connect with peers in the workplace through corporate events and activities.

Volunteer Hours

Connecting with your community is a great way to establish social ties and enrich your life. We offer 15 volunteer hours per year for full- and part-time employees to engage in community involvement at the organization of your choice.

Transit and Parking Reimbursement Programs

To help our employees save on commuting costs, we offer the option of purchasing mass transit cards and parking passes on a pre-tax basis, through payroll deduction

Employee Assistance Program

When our employees need support in dealing with family, personal or workplace issues, our National Employee Assistance program provides confidential counseling, assessments and referrals 24 hours a day, 7 days a week. This program is also available to eligible dependents.

Fetch Pet Care

Your pet is a part of your life. Make sure they're taken care of when you're away on business, vacation, or even just during the day. This discount program offers dog walking and boarding services.

Recognizing Your Contribution

Our employees make significant contributions to our company, through their dedication to service and our company mission. To recognize employees who have gone above and beyond, we offer the following awards and recognition programs at BCBSA.

Richard L. Woolworth Customer Service Award Program

The Richard L. Woolworth Customer Service Award recognizes individual employees who have made a significant contribution to BCBSA’s success through demonstrated excellence in customer service and customer satisfaction to external customers and/or fellow BCBSA employees throughout the year.

The President’s Employee Recognition Program

The President’s Employee Recognition Award Program recognizes employees for significant performance and contributions that go above and beyond their annual goals and job responsibilities.

President’s Team Award Program

The President’s Team Award allows BCBSA leadership the opportunity to recognize the exceptional collaborative work effort of a cross-functional team. The team awards are in addition to the individual awards that are given out in each division and represent a substantial increased investment to reward exemplary teamwork across divisions.

Values Recognition Program

The Values Recognition program recognizes and rewards behaviors in our colleagues that mirror BCBSA's corporate values of commitment, integrity, collaboration, leadership and innovation, creating and maintaining a work environment that is conducive to our personal growth and development and allowing us to contribute to the organization to our greatest capability.

Supporting Your Personal and Professional Development

BCBSA is committed to creating an environment that enhances the skills and knowledge of employees and contributes to professional growth, career satisfaction, increased productivity, an engaging work environment and improved business results. We offer our employees personal and professional development opportunities at all stages of their careers.

Employee development opportunities include:

• Virtual and classroom learning
• Tuition reimbursement
• Mentoring
• External development

California Short Term Disability

January 10, 2020
2020-0060

Further Consolidated Appropriations Act, 2020 creates employee retention credits for major 2018 – 2019 disasters and extends key employment-related tax credits

On December 20, 2019, President Trump signed the Further Consolidated Appropriations Act, 2020 (P.L. 116-94 (H.R. 1865)) (Act), which includes a variety of important tax provisions such as disaster tax relief and extensions of certain employment-related tax credits, including the Work Opportunity Tax Credit (WOTC).

Employee retention credits for certain 2018 and 2019 major disasters

Employers impacted by certain major disasters in 2018 and 2019 may be entitled to take an employee retention credit (DZ Credit) of up to $2,400 per employee if:

• Their trade or business was active at the time of the disaster, located in a qualified disaster zone and rendered inoperable as a result of the disaster
• They continued to pay to or incur wages for eligible employees (i.e., employed at the location immediately before the disaster)

Employers must claim the general business credit in the tax year qualified wages were paid to the employee. This credit equals 40% of wages (maximum of $6,000 per employee) paid to or incurred for an eligible employee:

• Beginning on the date on which the trade or business first became inoperable as a result of the disaster at the employee's principal place of employment immediately before the disaster and
• Ending on the earlier of:
• The date on which the trade or business resumed significant operations at the employee's principal place of employment or
• 150 days after the last day of the disaster incident period

The new DZ Credit is similar to the employee retention credits created by the Disaster Tax Relief and Airport and Airway Extension Act of 2017 and the Bipartisan Budget Act of 2018 in the aftermath of hurricanes Harvey, Irma, and Maria, and the 2017 California wildfires. It covers disaster zones, as determined by the President from January 1, 2018 to February 18, 2020, to warrant individual or individual and public assistance under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. Employers in the following states and U.S. territories may be eligible for the new DZ Credit: Alabama, Alaska, Arkansas, California, Florida, Georgia, Hawaii, Indiana, Iowa, Mississippi, Missouri, Nebraska, North Carolina, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Wisconsin, American Samoa, and the Northern Mariana Islands.

Extension of certain employment-related tax extenders that were set to expire on December 31, 2019

The WOTC, which was set to expire for wages paid to or incurred for individuals who began work after December 31, 2019, is extended through December 31, 2020. The WOTC provides a general business credit of up to $9,600 to employers that hire and retain individuals from certain targeted groups (e.g., long-term unemployed, veterans).

The employer-provided paid family and medical leave (PFML) credit, which was set to expire for wages paid in tax years beginning after December 31, 2019, is extended to include wages paid in tax years beginning on or before December 31, 2020. The PFML credit provides a general business credit of up to 25% of wages paid to qualifying employees taking leave for a reason covered under the federal Family and Medical Leave Act (FMLA). Employers must have a written policy in place giving all qualifying employees a minimum of 50% wage replacement for at least two weeks (pro-rated for part-time employees) in order to qualify for the PFML credit. Qualifying employees include employees who meet both of the following requirements:

• Have been employed by the employer for one year or more
• Had, for the preceding year, compensation that did not exceed 60% of the IRC Section 414(q)(1)(B)(i) threshold

The compensation threshold is $72,000 ($120,000 x 60%) for wages paid in 2018 and $75,000 ($125,000 x 60%) for wages paid in 2019. Paid leave provided under a short-term disability policy may qualify for the PFML credit if it meets the minimum requirements. See Notice 2018-71 for more details on the PFML credit.

Retroactive extension of expired tax extenders

The Act retroactively extends the Federal Empowerment Zone (FedEZ) credit that expired on December 31, 2017, to December 31, 2020. The FedEZ credit, which is up to $3,000 per employee per year, is available to businesses located in designated empowerment zones that hire and retain employees who live and work in the empowerment zone. Empowerment zones are generally distressed urban and rural areas that are designated by the federal government for revitalization through tax incentives and other assistance. The FedEZ credit is available to employers for both new hires and existing employees.

The Act also retroactively extends the Indian Employment Credit (IEC) that expired on December 31, 2017, to December 31, 2020. The IEC, which is up to $4,000 per employee per year, provides an incentive to businesses to hire certain individuals who live on or near an Indian reservation. A qualified employee for purposes of the IEC is an enrolled member of an Indian tribe, or his or her spouse, who performs substantially all of his or her services for the employer within an Indian reservation and also lives on or near that reservation. The IEC is available to employers for both new hires and existing employees.

Implications

Short Term Disability Work Laws

The Act provides an important tax credit opportunity for employers that were impacted by major disasters in 2018 and 2019. Employers with locations in Alabama, Alaska, Arkansas, California, Florida, Georgia, Hawaii, Indiana, Iowa, Mississippi, Missouri, Nebraska, North Carolina, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Wisconsin, American Samoa, and the Northern Mariana Islands should determine if they are located in a qualified disaster zone and impacted by the hurricanes, wildfires, severe storms, and other disaster incidents that took place in the last two years. To determine qualified wages paid to or incurred for employees in these locations, employers should conduct a thorough analysis on a location-by-location basis to determine when their location(s) first became inoperable and resumed significant operations. Employers may be required to file an amended return in order to claim credits associated with disaster incidents that took place in 2018.

In addition to disaster relief, retroactive extensions of the FedEZ and IEC credits present an opportunity for employers to look back at their hiring and payroll data in 2018 to capture these credits. An amended return may be required to claim the credit for wages paid in 2018. Employers should continue to screen new applicants to determine eligibility for these credits as well as the WOTC.

Finally, with regard to the PFML credit, employers should analyze the eligibility requirements to determine if wages paid under their parental and/or short-term disability policies are eligible for the credit. While the credit has been extended for wages paid in tax years beginning on or before December 31, 2020, the credit is only available for wages paid to employees on or after the later of the qualifying policy's adoption date or the policy's effective date. Therefore, employers that do not currently have a qualifying paid family and medical leave policy, but are considering amending their policy or creating a new policy altogether, should account for this limitation in determining the credit's potential benefits.

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