(a) Before payment, benefits from a disability or health insurance policy or program are exempt without making a claim. After payment, the benefits are exempt.
§ 704.130.Benefits From Disability Or Health Insurance Policy
Title 9. Enforcement of Judgments · Division 2 · Chapter 4. Exemptions · Article 3. Exempt Property · Last amended 2000 · Last verified July 28, 2026
In one sentenceSection 704.130 exempts disability or health insurance benefits both before and after payment without a claim, except that a health care provider whose services are the basis for the benefit can reach it, and support judgments can be enforced against disability benefits through a capped assignment order.
Full Text of § 704.130
(b) Subdivision (a) does not apply to benefits that are paid or payable to cover the cost of health care if the judgment creditor is a provider of health care whose claim is the basis on which the benefits are paid or payable.
(c) During the payment of disability benefits described in subdivision (a) to a judgment debtor under a support judgment, the judgment creditor or local child support agency may seek to apply the benefit payments to satisfy the judgment by an earnings assignment order for support, as defined in Section 706.011, or any other applicable enforcement procedure, but the amount to be withheld pursuant to the earnings assignment order or other procedure shall not exceed the amount permitted to be withheld on an earnings assignment order for support under Section 706.052.
Plain-English Summary
Disability and health insurance benefits get full protection at both ends of the payment process. Before payment, benefits from a disability or health insurance policy or program are exempt without a claim, and once paid, they remain exempt.
That protection has one built-in exception. Subdivision (b) removes it when the judgment creditor is a health care provider whose own claim for payment is what the benefit was meant to cover — in other words, a provider can reach the very benefit paid to cover the treatment it billed for.
Support enforcement gets its own channel here too. A support creditor, or the local child support agency, can apply a disability benefit payment to a support judgment through an earnings assignment order for support or another applicable procedure, but the amount withheld can't exceed what could be withheld from a like amount of wages under § 706.052.
Frequently Asked Questions
Are disability insurance payments protected from creditors?
Yes, both before and after payment, without filing a claim, under § 704.130(a).
Can a doctor or hospital take the insurance benefit paid to cover their own bill?
Yes. Subdivision (b) removes the exemption when the judgment creditor is a health care provider whose claim is the basis for the benefit payment.
Can disability benefits be reached to collect child or spousal support?
Yes, through an earnings assignment order for support or another enforcement procedure, capped at the amount permitted to be withheld under § 706.052.
Amendment History
Amended by Stats 2000 ch 808 (AB 1358), s 15, eff. 9/28/2000.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 28, 2026.
· Official source
Also known as: disability insurance exemption californiahealth insurance benefits exempt from creditors