Short-Term Disability Benefits – Compare Options
We don’t know what the future hold for us. Although all people hope for the best in their lives, accidents may happen. These types of events can leave a person unable to work and sustain themselves and their family. This is a worrying situation. However, a person can reduce the financial risk of this occurrence with short-term disability benefits. This way, they can rest assure they will have an income in case they are unable to work.
Understanding Short-Term Disability Benefits
Simply put, short-term disability benefits refers to the money a worker will receive in case they suffer from an injury or illness that qualifies for them. In this specific case, pregnancy is also covered under short-term disability benefits. The funds received will be a percentage of the worker’s salary. These funds can be used to purchase everyday items or expenses such as food, utilities, housing, etc.
According to Unum, a disability insurer that offers its services to one third of Fortune 500 companies, the top reasons for disability claims in 2014 were:
- Pregnancy (28%)
- Injury (11%)
- Joint Disorders (7%)
- Digestive Conditions (7%)
- Cancer (7%)
How Do Short-Term Disability Benefits Work?
Basically, either a worker or an employer will pay for a short-term disability insurance. In most cases it is the employer who pays for it. There are different short-term disability benefits plans, each one with its own specific rules and conditions. As a rule of thumb, most plans will have the following general requirements:
- Employees should be full-time workers (work over 30 hours a week)
- Employee should have worked for a specified amount of time before benefiting from the plan
In case you get injured and can’t continue working as you had (plus, you have a short-term disability benefits insurance and comply with the requirements), you must wait for a period of time called the elimination period before starting to receive the funds. Usually, the elimination period lasts between one and 14 days after the person gets injured or becomes ill. In general, elimination periods for illnesses last longer than the injuries. It is important to make a claim as soon as your doctor classifies you as unfit for work or disabled. This will ensure that you won’t wait longer than necessary when it comes to receiving short-term disability benefits.
If a person qualifies for short-term disability benefits, they will receive a percentage of their salary. Here is a list of the benefits’ features:
- Payments are usually between 50 and 70% of the weekly salary and are made on a weekly basis.
- Payment duration lasts between 10 and 26 weeks.
- Certain plans may have a “cap” which dictates the maximum amount you can receive each month.
Note that being “disabled” means that a person is unable to perform any normal job duties and is undergoing on-going medical care.
Who Is Suitable for Short-Term Disability Benefits?
Anyone who is working and can be labeled as “disabled” by the definition mentioned in the previous section. Remember that the person should remain “disable” during the elimination period to qualify for them. If you are unsure about your situation and qualifying, contact your states Department of Labor to discuss your specific circumstances
Who Isn’t Suitable for Short-Term Disability Benefits?
Cases in which a person isn’t suitable for short-term disability benefits include:
- Person is not covered by a short-term disability insurance plan
- Person is not considered “disabled”
- Person doesn’t meet all requirements of the short-term disability plan they have (time working for a company, etc.)
- Person doesn’t remain disable during the elimination period.
- Disability isn’t covered by the plan (usually, war-related disabilities, disabilities coming from committing criminal acts, etc. are not covered)
Short-Term Disability Benefits Options
Below is a list of the main short-term disability options available to employees:
Private Disability Insurance – This refers to insurance that is paid by private parties (individual or employer). There are various subtypes of this insurance type including:
- Private Insurance Purchased By Individual – In this case, it is the individual the one who pays for the short-term disability insurance. It is also purchased from private insurance companies that offer this service. Group discounts may be available if more than one individual decides to purchase it as a group.
- Private Insurance Purchased By Employer – This accounts for short-term disability insurance purchased by the employer to protect his employees in the case of disability. For this purpose, the employer will purchase the insurance from private companies that offer this specific type of insurance. This one is also known as group short-term disability insurance and is the most common of them all. It also makes part of the “worker’s compensation” disability insurance and businesses are required to have them in most states.
- Key Person Disability Insurance – This type of insurance is meant to protect the employer in case an employee suffers from disability. In this case, the employer will receive an agreed amount of money if this happens. This money should be used to find and pay for a replacement for the time being.
- Business Overhead Expense Disability – This type of insurance also protects the employer and it covers a business’s overhead costs such as rent, mortgage, utilities, leasing, etc. in case the business owner becomes disabled.
Government Sponsored Programs – The government doesn’t have a short-term disability insurance, per se. However, the Office for Worker’s Compensation Programs does have some programs that are similar to it. These include the Coal Mine Worker’s Compensation, Federal Employees’ Compensation, and the Worker’s Compensation Programs among others.
Short-Term Disability Benefits Qualification
To quality for short-term disability benefits, the person must comply with the following requirements:
- Be covered by a short-term disability insurance (your own or through your employer)
- Comply with the requirements of his short-term disability insurance policy
- Become disabled (not be able to do any form of paid work and be under regular medical care)
- Remain disable during the elimination period
- Type of disability should qualify for benefits
Where to Apply for Short-Term Disability Benefits
Application for short-term disability benefits should be done either online or at the offices of your current short-term disability insurance provider. They will ask you to fill a form that you should fill thoroughly.
Three statements should be provided
- The first one is the doctor’s statement that should detail the reason and length of absence.
- The second one is the employee’s statement explaining why you can’t continue working.
- The third one is the employer’s statement that acts as a testament in regards to the job description and the duties that the employee is meant to perform.
The insurance company will then verify the statements. If approved, you will be entitled to short-term disability benefits. If not, you have the right to appeal the decision within the deadline including reason and evidence on why you should receive the benefits.
Other Financial Assistance during Your Period of Unemployment
In many cases the application process of collecting benefits can be slow and held up for various reasons. If you are in a situation where finances are tight and you need help, there are assistance options available.
Especially if you are a low income earner – Some these programs include:
- Help with utility bills to keep the lights on and water running in your home
- Help with rent should you have no income coming in and little to no savings
- Self-Sufficiency Grants to help with cash flow for various important household needs.
In addition, there are community action agencies and financial counselors who can provide free assistance across most financial and general living needs. They have internal resources to assist or can connect you with other local or national services who can assist in cases where they are unable to.