Consider the following scenario: you’ve had an injury that renders you ineffective at work and requires you to take time off.
You require short-term disability insurance but are unsure how long it will last. We have outlined everything you need to know about short-term disability insurance and how long it will last.
Short-term disability insurance is critical because it allows you to care for yourself and protect yourself if you are unable to work due to an unforeseen sickness or injury.
But, before you purchase this insurance, you should learn more about short-term disability, including how long it lasts and the differences between long and short-term disability insurance.
Table of contents
- What is Short-Term Disability?
- What Counts as a “Disability”?
- Who Provides Short-Term Disability Insurance?
- How long is Short-Term Disability?
- What is the Difference Between short-term and long-term disability?
- What Does Disability Insurance Do?
- Is Mental Health Covered With Short-Term Disability?
- Is Your Job Protected While You Take Short-Term Disability?
- Conclusion
- References
- Recommendations
What is Short-Term Disability?
Short-term disability insurance is a sort of insurance benefit that pays some compensation or replaces income in the event of non-work-related accidents or illnesses that keep you from working for a set length of time.
It’s worth noting the word “non-job-related.” Workers’ compensation, rather than short-term disability, will often cover injuries sustained while on the job.
What Counts as a “Disability”?
There is no universally accepted definition of a disability in this country.
“It’s an entire plan- or policy-specific,” says Michael Bartolic, a Chicago-based attorney who specializes in employee benefits and deferred pay. “As a general rule, any type of injury or illness renders one unable to do their duties.”
Childbirth, major surgery with a protracted recovery period, a disease requiring frequent care, or an injury incurred in an accident are all examples.
The best thing to do, according to Bartolic, is to review your plan documentation, as the term disability should be clearly stated there.
Who Provides Short-Term Disability Insurance?
As a perk, your employer may provide you with a short-term disability plan. Companies aren’t compelled to do so in the vast majority of cases.
Just five states (California, Hawaii, New Jersey, New York, and Rhode Island) require businesses to provide their employees with a short-term disability plan.
Many businesses prefer to provide this disability benefit regardless since it provides them with a federal tax deduction.
If your firm provides t insurance, there are two options:
- Self-financed or self-administered: Your employer provides and funds this benefit themselves.
- Insurance: is provided by your employer in collaboration with an insurance company.
How long is Short-Term Disability?
Short-term disability insurance, as the name implies, is designed to protect you for a limited time following an illness or injury that prevents you from working. Short-term disability insurance normally protects you for a period of three to six months, depending on the policy.
Read this: 20 Best Stress Relief Toys that will keep you going all day at work
What is the Difference Between short-term and long-term disability?
Short-term disability (STD)
After you run out of sick leave, STD insurance compensates you for a portion of your income for a brief period (STD typically lasts less than 1 year).
STD will usually pay you after a waiting period, depending on your plan (also referred to as the elimination period in contracts).
From the date of illness or injury, this interval is usually 1-7 calendar days. STD benefits are paid weekly and typically last between 13 and 26 weeks. Work-related injuries are often not covered by STD coverage.
The following are some examples of common life events that are usually covered by STD:
- An injury that renders you unable to work
- A long-term illness
- The birth of a kid is a significant event in one’s life.
Long-term disability (LTD)
LTD insurance kicks in once your STD benefits and employer-provided sick leave have been exhausted (LTD typically lasts more than 6 months). There is typically a 90 or 180-day waiting period, which can be covered by STD insurance if you have one.
The benefit lasts for a variety of reasons, but it normally lasts until the employee returns to work, is no longer incapacitated, or reaches Social Security retirement age.
The following are some examples of common life events that are typically covered by LTD:
- Disorders of the musculoskeletal system and connective tissue (back pain, osteoarthritis)
- Cancer
- Injuries caused by chance
- Circulatory/cardiovascular diseases (heart attack, coronary artery disease)
- Mental illness
What Does Disability Insurance Do?
So, because it is designed to replace a portion of your income if you are unable to work due to serious sickness or injury, disability insurance is also known as “disability income insurance.”
Disability insurance pays you directly, allowing you to cover your expenditures with no restrictions on how you spend the money.
Disability insurance can safeguard up to 70% of your income for a period ranging from 3 months to retirement age, depending on the policy.
The duration of the benefit periods and the degree of coverage each type of policy gives are the two basic variations between long-term and short-term disability policies, while each policy is unique.
Is Mental Health Covered With Short-Term Disability?
What if it’s not something physical that gets you away from your job’s demands? What if you’re suffering from depression or another mental health problem that makes it practically difficult for you to meet your work obligations?
Many short-term disability policies cover mental health (again, it’s vital to check your plan documents). You will, however, need documentation that this is a problem you’ve been dealing with for some time.
“You should see a psychiatrist before you leave,” McDonald advises. “There should be a really good understanding of the issues.”
Is Your Job Protected While You Take Short-Term Disability?
Short-term disability, unlike a leave of absence under the Family and Medical Leave Act (FMLA), does not provide immediate employment protection.
Many individuals are astonished to learn that you can be fired from your job while on leave and that you are not guaranteed the same employment when you return.
The Americans With Disabilities Act (ADA) protects those who fit the ADA’s definition of disability and makes it significantly more difficult for employers covered by the ADA (those with 15 or more employees) to fire an employee because of their handicap.
Before firing an employee, the firm must first assess whether any accommodations could be made (without causing the company “undue hardship”) to allow the individual to perform their work satisfactorily.
To find something that works, the employer must engage with the employee to test a variety of adjustments.
Only then can the employer consider terminating the employee if there is no reasonable method to enable that person to fulfill the essential obligations of their employment.
Conclusion
I believe you will understand more about short-term disability at the end of this article.
References
- Gusto – Short-term and long-term disability
- TheMuse – How Does Short-Term Disability Work? All Your Questions, Answered
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