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Disability Insurance: Short Term

Short Term Disability Features To Note

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Each Short Term Disability plan will have slightly different benefits and provisions. If you don't have one, ask your employer for a Summary Plan Description of the Short Term Disability plan.

While these plans vary, following is a list of basic features to note:


Check to see whether the type of employee you are is covered. For instance, is the plan limited to full time employees, but not to part time employees? How are the different types of employee defined?

Do you have to work for the employer for a certain period of time before you become eligible for Short Term Disability?

Benefit Payment

Most plans pay a percentage of your gross pay, such as 60% of your salary. There is, often a maximum payment dollar amount. For example, the benefit may be something like 60% of gross weekly earnings to a maximum payment of $400 per week.

Or the benefit may be a certain percentage for one period of time, and then another percentage for another period of time. For example, 45% of gross weekly earnings for the first month, then 60% for the remaining period of time.

Some employers divide the total group of employees into classes and pay a fixed amount for each class. For example: Employees earning between $400 and 499 per week will receive a benefit of $300 per week, while employees who earn between $500 and $750 per week will receive a benefit of $350. per week.

The reason employers pay less than full salary is to encourage people to go back to work.

Waiting Period

A waiting period is the period between the time when you leave work and when benefits start.

The waiting period for short term disability benefits is usually one week. If you become hospitalized or are injured in an accident, there is usually no waiting period.

Many employers will "dove-tail" short term disability with a program that pays full salary and benefits when a person is sick (Sick Leave). For example, a plan may provide that "the waiting period is one week or the expiration of sick leave, whichever is greater." This type of provision forces you to use up sick leave before being eligible for short term disability.

Maximum Benefit Period

Short-term disability plans will only pay for a limited period of time, usually no more than 13, 26 or 52 weeks per each disability period.

The maximum benefit period is often set to match the waiting period for the employer's Long Term Disability Plan or Social Security Disability Insurance (SSDI).

To learn more, see: Long Term Disability Insurance.

Pre-Existing Conditions Provision

Many short-term disability plans will not pay if the need for time off work is due to a medical condition that was treated before the employee becomes insured under the plan. .

Work Related Injury or Illness

Generally short-term disability plans only cover disabilities that are not work related since those disabilities are covered by Workers Compensation Insurance. However, some employers will also cover work related disabilities as a supplement to Workers Compensation benefits.

To learn more, see: Workers Compensation Insurance.

Disability Period

Short-term disability plans usually cover more than one period of disability. If you become disabled and then go back to work, and become disabled again, the short-term plan will generally picks up again the second time.

If this becomes relevant to you, check to see how long you are required to work after a disabling experience before you are eligible to receive short-term disability income again.

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