Short-Term Disability Insurance Plans

Workers go to work daily hoping to perform their duty and return home. However, an illness or accidental injury might keep a person from working for a short period. When this happens, the worker may not get paid when away from work, especially when the injury or illness is not work-related. 

Being unable to work might leave you strained for cash, especially if you have little or no savings. Hence, we always advise workers and employers to buy a short-term disability insurance plan. We provided vital information on this type of disability insurance policy in this article.

What Is Short-Term Disability Insurance?

A short-term disability insurance policy replaces the income of injured workers for the period they cannot work. The insurance provider pays the policyholder a percentage of their income before the disability every week. The payment covers accidental injuries and illnesses excluded from workers’ compensation insurance.

What Qualifies for Short-Term Disability? 

To qualify for short-term disability insurance payments, the policyholder must establish one of the following:

• Accidental injury 
• Illness (excluding a pre-existing health condition)
• Pregnancy 

The illness or accidental injury must not result from adverse conditions at the workplace or from performing a work function. If it does, short-term disability insurance will not cover it. 

How Does Short-Term Disability Work? 

The content of a short-term disability insurance policy varies from one insurer to the next. The standard options are:

• Voluntary (the employee buys and pays for the insurance plan)
• Traditional (employer pays the premium)
• Core buy-up (employees can purchase more coverage for themselves)
• Contributory (both the employees and their employer pay for the policy)

As mentioned, under short-term disability insurance, disabled employees will receive a percentage of their pre-disability weekly wage. This typically ranges between 40% to 70%, and most short-term disability payments can last up to 13 weeks or 52 weeks. 

Also, the injured worker starts receiving benefits eight days after filing a claim. If you want it earlier, for example, on the first day of the injury or illness, it must be stipulated in the insurance contract.

Finally, note that short-term disability insurance benefits may be taxable based on how the premiums are paid. For instance, if you pay premiums with pre-tax dollars, then the benefits you receive when disabled will get taxed. 

At Goldstein Healthcare, we make it easy for employees and employers to buy a disability insurance policy and access disability benefits. When you contact us, our insurance experts will present different plans based on your unique needs. Get a free quote today.