Federal Law In a number of states, employers are required to contribute to temporary disability insurance programs. Some states permit insurance companies to provide the coverage, while others require that coverage be provided by the state and paid for through payroll taxes. Each state's plan and administration is handled differently, including eligibility requirements, benefit amounts, and the duration of benefits. Unlike workers' compensation benefits, which employees collect as a result of a work-related injury or illness, disability insurance generally provides benefits to employees who are prevented from working due to an off-the-job injury or illness, including pregnancy or childbirth. Although some employers offer short- and long-term disability plans to their employees as fringe benefits, employers outside the few states with mandated disability programs are not required to do so.