Ultimate Guide To Short-Term Disability Insurance: 7 Common Questions Answered

Written by Brandon Wright

Applied Business Solutions

April 11, 2023

Throughout your working life, situations arise that make it impossible for you to continue to work. When these situations come up, short term disability insurance is exceptionally valuable. Even though the coverage only means you get a percentage of your gross pay, the payments can help provide financial stability until you are capable of going back to work.

Short term disability (STD) insurance is often available as part of an employer benefits package at work, but may also be purchased as an individual. Below is a look at some of the most common questions about short term disability.

How do you know if you are eligible for short term disability?

You may be eligible for short term disability benefits if a doctor or medical professional finds that they cannot perform typical work duties due to an injury, illness, or medical condition. A few examples of conditions that may qualify you for short-term disability include:

  • Injuries that did not occur on the job
  • Medically necessary surgery
  • Illness
  • Pregnancy

Other things can affect whether you qualify for STD as well. For example, an employer-provided plan may state that coverage only begins after you have been employed for a certain number of months or if you work full-time hours. Your eligibility may even be affected if you miss payments for your plan due to time off of work.

How much are short-term disability payments?

A few factors determine how much your payments will be with STD. In general terms, you can expect payments to be around 50 to 60 percent of your gross income but can be as much as 80 percent. The actual amount can vary depending on the coverage you have. Some states also have higher short-term disability benefit limits and requirements than others.

When do short term disability payments begin?

Short-term disability payments begin anywhere between 1 and 14 days after the onset of the condition. However, most policies do have a brief waiting-period before payments begin. For example, you may have to wait a full week after a doctor advises you to take a leave before STD coverage starts. Therefore, it can be helpful if you have vacation time or personal time to use until your STD payments kick in.

How is short term disability different from worker’s compensation?

Short-term disability and worker’s compensation are indeed similar on a surface level. Both offer compensation when you are unable to work. However, the two benefits completely differ otherwise. In short, STD is designed to offer coverage when you have an illness or injury that is not the result of or related to the job. By contrast, worker’s compensation covers you if you have to be off of work due to an illness or injury that happened at work. Further, worker’s comp is only available through an employer.

How do pre-existing conditions affect short term disability?

In the event you have a pre-existing condition when you sign up for coverage, you may not be eligible for STD benefits. For example, if you are already pregnant when you enroll in short-term disability coverage, you may not be covered when you have to take maternity leave. However, the exact terms regarding pre-existing conditions can vary depending on the policy carrier.

How long will short term disability payments last?

Short-term disability benefits duration may vary depending on the plan you have and the state where you live. Most policies offer payments for up to three to six months, but some may offer longer coverage of up to a year. Usually, if you use all the STD coverage, you will have the option of transitioning to long-term disability benefits if you have opted for coverage. Keep in mind, however, that long-term disability payments can be less of a percentage of your gross pay.

Can short term disability claims be denied?

Short term disability claims can be denied for several reasons. Most claims denials will be related to a non-covered condition. For example, some plans cover certain illnesses while others don’t. Another reason that a claim may be denied is if your doctor does not clearly state how your illness or injury limits your ability to perform your job. Pre-existing conditions may also lead to a denial. This is why it is important to fully understand the terms of your coverage before filing a claim.

Find Out More About Short Term Disability Insurance

At Applied Business Solutions, we can help you navigate through finding adequate short-term disability insurance. Reach out to us to start a discussion about which plans and coverage options may work best for you.

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