What is short-term disability insurance and how does it work?

If you have an illness or injury that makes you unable to do your job, you may qualify for short-term disability insurance. With a valid policy, a short-term disability replaces part of your income for a short period of time, usually from nine weeks to a year, when you are injured or ill and unable to work.

Let’s take a closer look at short-term disability and what you need to know about this type of insurance.

What is disability insurance?

Disability insurance pays part of your income if you have an illness or injury that prevents you from working. There are two types: a short-term disability, for health circumstances that take you away from work for a few weeks or months, and a long-term disability, which eventually covers you indefinitely.

“If you have an illness or disease and you are unable to perform material duties in your profession, then you meet the definition of disability,” said Joseph MacDonald, a partner at McDonald & McDonald, a law firm in Ohio that specializes in disability. insurance claims.

What is short-term disability insurance?

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If an illness or injury prevents you from doing your job, you may be entitled to short-term disability insurance.

Short-term disability insurance offers partial income for a period of time to workers suffering from illness or injury. The birth and the first few months of caring for the baby can also be covered by short-term disability insurance.

“Every company is different in terms of the duration of short-term disability. [It could be] from three months to six months, ”says MacDonald. “Some employers may have them longer.” Short-term disability covers 50% to 60% of a worker’s monthly income, and in most cases people with short-term disabilities can return to work, McDonald said.

When you have an accident that requires you to file a short-term disability claim, you will probably have a waiting period during which you will not receive benefits. Once approved, you will also be told how many weeks you can collect benefits before they expire.

How do you get short-term disability insurance?

Consult your employer first. You may already have short-term disability coverage as compensation for your work, and in some cases your employer pays for this coverage. Some employers may also offer the option to purchase additional supplementary insurance from places such as Aflac or Unum. If you do not have work benefits, some private insurers may also offer coverage: Mutual of Omaha, Assurity, State Farm and LifePreserve offer short-term disability insurance to individuals.

In addition, 11 states – California, Colorado, Connecticut, Hawaii, Maine, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Washington, plus the District of Columbia – offer state-sponsored short-term programs for people with disabilities. Eligibility rules, the application process, the payment of benefits and the duration of the programs vary considerably from country to country, Bradshaw said. For example, in Colorado, participants receive 60% of their income, weekly highs of $ 3,000 and a waiting period of 30 days. In California, participants receive 55% of their weekly winnings with a minimum benefit of $ 50 per week and a maximum benefit of $ 1540.

What will short-term disability insurance cost me?

Many employers offer short-term disability insurance to their employees as part of a standard benefit package. You may also have to get involved and pay for it, although this is usually a nominal amount, says MacDonald. Short-term disability insurance is also available on the private insurance market from companies at prices of $ 120 and up per year, depending on the coverage.

What types of conditions are covered by short-term disability?

A wide range of medical circumstances, including illness and injury, are covered by short-term disability insurance, said Erin Bradshaw, head of the mission at the Patient Protection Foundation. Examples include:

  • An accident outside work that has made the person incapacitated due to the recovery period
  • Surgery for a condition that will require recovery in a short period of time
  • The diagnosis of cancer with treatment will affect the ability to work

How do I use short-term disability benefits at birth?

A mother smiles at the baby on the bed while holding their legs.

Credit: Peer-reviewed / Getty Images / Prostock-Studio

The birth and the first weeks of the baby’s life can be covered by short-term disability insurance.

A short-term disability policy can be a good option to cover some lost wages during maternity leave if you are self-employed or the company does not offer paid leave.

With most short-term disability plans, your coverage begins two weeks before the baby is born and coverage ends six weeks after the baby is born. As with any such claim, your short-term disability benefit is a percentage of your income. Once the waiting period is over, you will receive a weekly or biweekly check to help you pay for your newborn care while you are recovering at home.

For example, with Unum short-term disability insurance, uncomplicated deliveries are approved for short-term disability for a period of six weeks. After a caesarean section, a benefit period of eight weeks may be approved. These benefit periods include elimination periods or waiting periods during which no benefits are paid. So, if the waiting period is one week, the short-term disability will cover five weeks of payment for a normal birth and seven weeks for a cesarean delivery.

You should also note that you may need to register for some private or additional short-term disability policies before you become pregnant to qualify for short-term disability. For example, Aflac will not pay benefits for short-term disability caused by pregnancy or childbirth during the first 10 months from the effective date of the coverage. So if you are planning a family, you will want to plan it in advance.

Do I need to see a doctor to qualify for a short-term disability?

See your doctor about your illness or injury as soon as possible – both for treatment and to create a medical record to support your application for short-term disability. “Have an in-depth conversation with a doctor about how you’re struggling and what you can’t do,” MacDonald says. “You have to have a really clear idea why you can’t work.”

Remember to keep records such as X-rays and medical reports that the short-term disability insurance company may require you to provide when you submit your application.

Where can I learn details about short-term disability policy?

To learn the specifics of short-term disability insurance, you will need to dig into the policy. “All plans for people with disabilities vary in waiting periods, disabilities covered, benefits and exemptions offered,” Bradshaw said. “Be sure to read your rules for exact details.” Exceptions to short-term disability coverage may include self-inflicted injuries and injuries that occurred during illegal activities.

To avoid delaying short-term disability benefits, provide all necessary information to the insurance company. “Understand the benefits and eligibility deadlines and provide all the necessary information [and] medical requests to avoid a break or [termination] of the benefits, ”says Bradshaw.

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