Cocoon pay program explainer - estimation pay method

You may receive follow-up questions from a state program or private insurance carrier because employees generally cannot receive more than 100% of their normal wages during a medical disability or family leave benefit period.

If you indicated on a claim form that you are continuing to receive pay while on leave — such as pay from your employer — the state or carrier may ask for more details about:

This is expected. Initial claim applications often provide limited options to describe employer-provided leave pay, so these follow-ups help the state or carrier determine whether your benefit should be approved and whether any benefits should be offset by employer pay.

In Cocoon’s estimation pay method, your employer pay is generally top-up pay. This means your employer is paying the difference between your normal wages and the benefits Cocoon estimates you are eligible to receive from applicable state and/or private insurance programs.

Throughout your leave, Cocoon calculates employer-provided leave pay using the estimation method.

Under this method, Cocoon estimates the benefits you may be eligible to receive from applicable state and private insurance programs. Your employer then provides top-up pay based on those estimates, with the goal of helping you receive up to your normal gross pay across all sources.

For example, if Cocoon estimates that 60% of your normal pay will come from state and/or insurance benefits, your employer may provide the remaining 40% as top-up pay.*

Cocoon’s estimation model uses available information such as:

While Cocoon applies employer top-up pay through payroll, state and private benefit payments usually take time to process. It can often take several weeks for claims to be finalized, approved, and paid by the state or carrier. Because of this, you may receive only partial pay from your employer while your claims are still being processed.

Once your claims are approved, the state or carrier may pay benefits for covered dates that have already passed. These payments may be issued as:

Cocoon does not control when state or private carriers issue payments. Cocoon’s dashboard may show estimated benefit amounts or deductions by pay period, but those amounts are not always a prediction of exactly when an outside provider will pay you. Instead, Cocoon uses those estimates to calculate employer top-up pay and help your employer avoid overpaying or underpaying during your leave.⁠

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*Percentage figures may vary based on program benefit maximums, your current salary, your employer’s leave policy, and the specific benefits available for your leave. For more information about the amounts expected from each source, please review the Your Payments section in your Cocoon dashboard.

Once you begin receiving benefit payments from a state program or private insurance carrier, you can use Cocoon’s Benefit Verification Tool to confirm whether the amount you received matches Cocoon’s estimate.

You can access the Benefit Verification Tool here: https://dashboard.meetcocoon.com/pay/verify

When you submit benefit payment documentation, Cocoon reviews the information and may update the benefit rate used in your pay calculations. If the rate paid by the state or carrier is different from Cocoon’s estimate, Cocoon may adjust future pay calculations accordingly.⁠

Benefit verification helps Cocoon improve payroll accuracy going forward, but it does not change when a state or carrier chooses to issue payments.

When a state or private carrier asks what type of pay you are receiving while on leave, you can generally describe it as top-up pay or pay from an employer salary supplement program.

This means your employer estimates the benefits you are eligible to receive from state and/or private insurance programs, then pays the difference between your regular wages and those estimated benefits.

The suggested language below may help you respond to common California EDD forms or follow-up questions. This is general guidance only.

I am paid my regular salary minus expected SDI during leave as top-up pay. I have a wage loss. Combined, my employer top-up pay and SDI do not exceed my regular pay. SDI should be approved.

Please be advised that my employer, [EMPLOYER NAME], has a salary supplement program. My employer estimates the disability benefits that I am eligible to receive from the state and/or private disability insurance carrier during my leave. My employer then calculates the difference between my regular wages and my estimated disability benefit, and my employer pays me that amount as top-up pay.

When combined with my state and/or private disability benefits, my employer’s payments during my leave do not exceed 100% of the regular wages I would have been paid had I been working during my leave period.

Without this employer pay program, I would experience a significant loss of pay during my leave. Please approve my SDI claim for benefits.

I am paid my regular salary minus expected PFL during leave as top-up pay. I have a wage loss. Combined, my employer top-up pay and PFL do not exceed my regular pay. PFL should be approved.

Please be advised that my employer, [EMPLOYER NAME], has a salary supplement program. My employer estimates the paid family leave benefits that I am eligible to receive from the state during my leave. My employer then calculates the difference between my regular wages and my estimated paid family leave benefit, and my employer pays me that amount as top-up pay.

When combined with my state paid family leave benefit, my employer’s payments during my leave do not exceed 100% of the regular wages I would have been paid had I been working during my leave period.

Without this employer pay program, I would experience a significant loss of pay during my leave. Please approve my PFL claim for benefits.

If California EDD asks you to report payments from your employer for a claim certification period, EDD is generally asking for employer-paid wages or employer leave pay for that period — not SDI payments you received from the state.

For Cocoon’s estimation pay method, this is typically the amount your employer paid as top-up pay for the relevant dates. Internally, Cocoon calculates this as employer leave pay after estimated benefit deductions. In simple terms:

Leave Pay - Benefit Deductions = Total Employer Pay

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If you are unsure what amount applies to a specific date range, contact Cocoon Support so we can help review the relevant pay information.⁠

You may receive a denial related to continued pay if the state or carrier believes you received wages that make you ineligible, or if calls, forms, or other requests for information were not answered in time.

If you believe the denial was based on a misunderstanding of your employer’s top-up pay program, you may be able to request reconsideration or file an appeal. The language below may help you explain the pay program.

I request reconsideration and appeal my benefit determination.

My employer has a salary supplement program that provides top-up pay during my paid leave. The pay program is administered through Cocoon, my employer’s leave administrator. Despite receiving employer pay, I have experienced a wage loss and am eligible for paid leave benefits. This statement clarifies my employer pay program to establish my eligibility for benefits.

Cocoon estimates the benefits that I am eligible to receive from the state and/or applicable private insurance carrier during my leave. Cocoon then calculates the difference between my regular wages and my estimated benefit, and my employer pays me that amount as top-up pay.

When combined with my state and/or private benefits, my employer’s payments during my leave do not exceed 100% of the regular wages I would have been paid had I been working during my leave period.

Without this employer pay program, I would experience a significant loss of pay during my leave.

Please reverse the determination and approve my benefit application.

Please reconsider the determination. I receive top-up pay during leave. I have a wage loss. My total employer pay and state benefit do not exceed my regular weekly wage under UIC section 2656. My claim should be approved.

I appeal the determination. I receive top-up pay during leave. I have a wage loss. My total employer pay and state benefit do not exceed my regular weekly wage under UIC section 2656. My claim should be approved.

Your employer paycheck may be lower because Cocoon is estimating that you will receive benefits from state and/or private insurance programs. Your employer is providing top-up pay based on those estimates, rather than paying your full wages separately from those benefits.

This helps prevent your total pay from exceeding 100% of your normal wages once benefit payments are issued.

Cocoon estimates benefits based on available program and policy information. State and private carriers may ultimately pay a different amount or use a different payment cadence.

If the amount you actually receive is different from Cocoon’s estimate, submit a benefit verification request so Cocoon can review your documentation and update calculations if needed.⁠

State and private carriers may take several weeks to approve and begin paying claims. Once approved, they may issue a lump sum covering prior approved dates. Future payments may then continue weekly, biweekly, or on another schedule set by the state or carrier.

No. Cocoon does not control when state or private insurance programs approve or issue benefit payments. Cocoon uses estimates to calculate employer top-up pay and can update those estimates when you submit verified benefit payment information.

In most cases, Cocoon does not pause the estimation method while claims are pending. Cocoon applies estimates when your leave begins based on the assumption that eligible claims will be approved, which helps reduce the chance of a larger overpayment or balance later in your leave.⁠

⁠​If you are experiencing claim delays or a denial, Cocoon Support can help provide general guidance on next steps.