Short-term disability (STD) insurance provides temporary income replacement when an employee is unable to work due to a non-work-related illness, injury, or medical condition. Here’s how it generally works:
How Short-Term Disability Works
- Eligibility: Employees must be enrolled in a short-term disability plan, which may be fully employer-paid, contributory (shared between employer and employee), or voluntary (employee-paid). Eligibility often requires a certain length of employment and medical documentation confirming the disability
- Qualifying Conditions: Common qualifying reasons include accidents, surgeries, illnesses, pregnancy complications, mental health conditions like anxiety or depression, and other temporary medical issues. Pre-existing conditions or injuries related to illegal activities or cosmetic procedures are typically excluded
- Claim Process: When disabled, the employee files a claim with the insurance provider, submitting medical evidence to prove they cannot work. There is usually a short waiting or elimination period-often 7 to 14 days-before benefits begin
- Benefit Amount: STD typically pays 40% to 70% of the employee's pre-disability weekly earnings, with some plans offering partial disability benefits that allow part-time work while receiving full or partial pay
- Duration: Benefits last for a limited period, commonly 13, 26, or up to 52 weeks depending on the plan. Extensions may be possible with medical proof and adherence to treatment plans. After STD benefits end, employees may qualify for long-term disability or other programs like Social Security Disability Insurance (SSDI) if eligible
- Return to Work: Employees resume their job once medically cleared. Some policies include rehabilitation services and return-to-work plans to ease the transition
Key Points
Aspect| Short-Term Disability| Long-Term Disability
---|---|---
Coverage Duration| Up to 6 months (commonly 13-52 weeks)| Several years or
until retirement age
Benefit Amount| 40% to 70% of income| Typically 50% to 60% of income
Waiting Period| Short (7-14 days)| Longer (90-180 days)
Qualifying Conditions| Temporary illnesses/injuries| Severe, chronic, or
permanent disabilities
Funding| Employer-paid, employee-paid, or shared| Usually employer-paid or
employee-paid
Short-term disability insurance helps employees maintain financial stability during temporary health setbacks and assists employers by protecting their workforce and reducing productivity loss
. In summary, short-term disability insurance offers partial income replacement for a limited time when an employee cannot work due to a covered medical condition, with benefits starting shortly after the disability begins and lasting until recovery or the plan’s maximum period is reached
