What Does Short Term Disability Insurance Cover?

Short Term Disability Insurance

Short-term disability is a type of insurance benefit that provides some compensation or income replacement for work-related injuries or illnesses that cause you to be unable to work for a limited period of time.

“Non -employment-related” is an important phrase to note there. Injuries that occur while you are at that time will usually be covered by workers ’compensation, rather than short-term disability.

Who Provides Short-Term Disability Insurance?

Your employer may offer a short-term disability plan as a benefit. However, most of the time, companies don’t have to. In fact, there are only five states (California, Hawaii, New Jersey, New York, and Rhode Island) where it is mandated that employers offer short-term disability plans to their employees.

Many employers choose to offer these disability benefits because they receive a federal tax deduction for doing so.

If your company offers short-term disability, it can be structured in two ways:

Self-funded or self-managed: Your employer provides and finances these benefits themselves.

Insurance: Your employer works with an insurance company to provide this benefit.

“It can be purchased by visiting an insurance agent in your state that is licensed to sell disability insurance,” explains Joseph McDonald, a partner at McDonald’s and McDonald’s, an Ohio-based law practice that specializes in disability insurance. “The biggest barrier to getting private coverage is cost. Buy around to get the best deals.”

What counts as a “Person with a Disability”?

There is no standard definition for a disability that applies across the board here.

“These are all plans or specifics,” said Chicago -based attorney Michael Bartolic, whose firm focuses on employee benefits and deferred compensation. “As a general observation, it is any type of injury or illness that renders a person unable to do their job.”

That could include things like childbirth, major surgery with a long recovery period, illnesses that require frequent treatment, or injuries sustained in some type of accident. Bartolic explains that the best thing to do is check your plan documents, as the definition of disability should be clearly stated there.

Is Mental Health Covered With Short-Term Disability?

What if it’s not something physical that takes you away from your job demands? What if you are struggling with depression or some mental health problem that makes it almost impossible to fulfill your work responsibilities?

Mental health can be covered by many short-term disability plans (again, it’s important to check your own plan documents). However, you need to have proof that this is an issue that you have been struggling with for some time.

“You need to talk to a psychiatrist before your vacation,” McDonald said. “There has to be a solid foundation of what the problem is.”

How Much Time Do You Get With Short Term Disability?

While I may sound like a broken record, concerns like, “How long is a short-term disability?” This is another aspect that can vary depending on your own plans.

“By definition, it’s short-term, but it can range in duration. I’ve seen at least 30 days and over a year,” Bartolic said, pointing to the maximum benefit period that can be seen in his own practice. “It depends on the overall structure of disability benefits through the employer.”

Your time also depends on your specific health problem. “The medical field has guidelines on how long recovery takes,” Bartolic explained. That provides a roadmap for the employer or your business plan to establish a reasonable amount of time for you to get out of work.

What if you are still not ready to go back to work?

If you suffer a short-term disability, your benefits will end when your pre-determined time period is over or when you return to work — whichever is earlier. But what if you’ve reaped your short-term disability benefits and you’re still unable to return to the office?

Let’s go back to our example of losing a job for major back surgery. Your doctor determines that you need six months to fully recover, and your short-term disability plan approves you for that period.

However, you have some very important complications with your surgery and recovery. As the end of those six months goes on, it’s clear that you can’t afford to sit at a desk for eight hours every day — this is a problem that will plague you longer, maybe even forever. How about now? Are you just lucky?

If you have a long-term disability benefit, it should be easy enough to switch to that benefit if you meet the new definition of disability for your long-term plan. The definition of disability under a long-term plan is typically different from the definition for short-term disability.

“Some insurance companies require new documents from claimants and new medical records before they will start paying long-term disability benefits,” McDonald said.

If it turns out that your disability will result in you being unable to perform some or all of the duties of any occupation (including unskilled, inactive work), the insurer who pays your long-term disability benefits will usually recommend that you apply for Social Security Disability, which can be a very long process, ”McDonald added.

How Much Can You Get Paid When You Take A Short-Term Disability?

When you take advantage of your short-term disability benefits, your time is paid — but that doesn’t necessarily mean you’ll get your full paycheck.

The amount you will earn depends on your specific plan. Some plans offer full salary replacement, but most do not. Instead, they offer a percentage of compensation (usually 50% to 60% of your weekly income) with a dollar amount cap.

“There are also programs that give you different amounts based on your longevity with the company,” McDonald said. “If you’ve been there for 10 years and have a disability period of 26 weeks, you probably get three months at 100% and then three months at 50%.”

If you live in one of the five states where short-term disability benefits are mandated, then the amount you will pay will be controlled as well.

How Often Do You Get Paid?

This is another area that can vary. Fortunately, your payment question should be answered clearly in your plan document.

Keep in mind that if your employer works with an insurance company to offer short-term disability benefits, then payments will usually be administered through the insurance company. This means they may arrive on a different schedule from the payroll time used for you (so you can’t expect a deposit on your normal payday).

Meaghan Tiernan, a senior copier for a marketing agency in San Francisco, uses short-term disability for maternity leave. He was given a debit card that his short-term disability payment had added to.

“I think it’s one at a time every two weeks on a regular basis,” he explained. “They also include weekends, so usually every 14 days I’m paid. Then you have to transfer the funds from that debit card to your bank account if that’s your priority.”

How Do You Eliminate Short-Term Disability?

If you believe that you need to take advantage of your short-term disability benefits, your first step is to make sure that your illness or injury is well documented, as you will need to provide evidence or medical support.

“Consult your doctor and find out what you’re up against first. Make sure you talk honestly about your symptoms and the things you’re going through. The medical record will be reviewed by the insurance company, so start with a strong statement, ‘Hey, I have this problem, ‘” advised McDonald.

Then, meet with your HR department to begin the process of filing a claim (which usually involves a fairly standard form). Don’t have an HR department? Contact your manager or refer to your plan documents to understand exactly what you need to do to submit your claim.

Keep in mind that a short-term disability plan has a requirement for how many days you need to get out of work before you can claim disability – it’s called a termination period. “The reason is that they don’t want to use a short-term disability for something that could be covered by sick days,” Bartolic said.

How Much Work Is Involved?

The exact paperwork you need to complete again depends on your specific plan. But the process usually starts with a fairly clear claim form that requires information from you (about things like your medical condition and your contact details), your employer (about things like your job and salary), and confirmation from your doctor that circumstances prevent you from working.

Fortunately, if you find yourself confused about any document or application, you can ask for help — either from your company’s HR department or the person in your doctor’s office.

“I really found the team in my doctor’s office to be very helpful,” said Tiernan, who admits the leave process itself is a little more complicated, as she leverages both short-term disability and FMLA for the birth of her child (to learn more about the differences between FMLA and short -term disability, read this).

“They have a whole team that is fully dedicated to filling out the forms and navigating the process, so I’m on the phone with them a lot. They help me figure out the best form to fill out, what dates and any follow-up I need. They also talk to the HR team. I’m here in the office. “

What Evidence Do You Need to Provide for Short-Term Disability?

Your doctor will need to sign your claim form before you submit your application, to guarantee the fact that your injury or illness is preventing you from working.

After you submit your claim, your employer or the insurance company that administers your short-term disability plan will ask you to submit your medical records so they can review them and verify that they are consistent with your disability claim. Contact your healthcare provider’s office to find out the best way to submit the record.

It can feel a little invasive to hand over personal documents of this type but know that it is a standard part of the benefits process.

Does Maternal Loss Count as Short Term Disability?

You may have heard of situations (like Tiernan, as an example only) where people use their short-term disability for pregnancy and maternity leave. Doing it is pretty common, but whether or not you can afford to do it yourself also depends on your plans.

“We actually see a lot of short-term disability policies that specifically address maternity leave,” Bartolic explained. The plan will also explain how much time is offered for maternity leave, which can vary based on things like whether the mother has a vaginal birth or a c-section.

Some employers do not exclude maternity leave from their short-term disability plans and have completely separate programs to deal with paid leave for childbirth.

Is Your Work Covered Even If You Take A Short-Term Disability?

Unlike leave without attendance you may be taken under the Family and Medical Leave Act (FMLA), short -term disability does not offer any direct employment protection. Many people are shocked to hear that you can be legally fired from your job while on vacation and that you are also not entitled to the same position when you return.

However, the Americans with Disabilities Act (ADA) protects people who meet the ADA’s definition of disability and makes it more challenging for companies covered by the ADA (those that employ 15 or more workers) to fire employees because of their disability.

Before terminating an employee, the company must first determine whether or not there are any accommodations they can make (without causing the company “undue inconvenience”) that allow the employee to perform their duties adequately.

Companies must work with employees to try several variations of accommodation in an effort to find something that works. If there is no reasonable way to enable the person to fulfill the essential responsibilities of their position, then only the employer can explain the termination of the employee.

By aamritri

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