Short Term Disability (STD) insurance protects an employee against the loss of income during the early portion of a disability. For a STD claim to be valid, the disability must be the result of a non-occupational illness or injury. The STD benefit is typically either a flat weekly benefit or a percentage of salary. It is not intended to totally replace an employee’s income, but provide income to help meet their financial obligations until they are able to return to work.
The STD plan will have a benefit waiting or elimination period. This will be the number of days an employee must wait, typically divided between accident and illness, before the STD insurance is effective. There may be some specific provisions within a policy that allow for coverage immediately if an employee is hospitalized during the benefit waiting period or a retroactive benefit payment for the waiting period if they are disabled for more than three weeks.
The maximum duration of a STD benefit will vary based on the policy specifics. The most common duration is 13, 26 or 52 weeks.
Short Term Disability benefits are typically coordinated with worker’s compensation claims and/or Social Security payments, if appropriate. For more details on the coordination, please refer to the insurance company.
