Short term disability insurance

This insurance policy provides an insured employee a pre-determined percentage of its salary for a definite time period, while the employee is temporarily injured or sick or is pregnant and it is referred to as the short term disability insurance. While this insurance provides a sort of social security to the employees, it doesn’t come under the category of social security disability insurance.

How it is used?

Benefits of this insurance, i.e. a definite percentage of salary, can be availed after 1-14 days of medical declaration of temporary disability of the insured. But there’s a catch here; an insured employee is bound to use his entire available sick days first before starting to avail the insurance benefits. This policy/rule to use entire available sick days first is introduced in order to eliminate any difference between people availing insurance benefits due to a short term illness or a short term serious injury or pregnancy.

Short term disability insurance is paid for either by the company of insured employee or by employee itself. The former option is more frequent than the latter. However, a company can always leave it on employees to take care of their short term coverage that may come with some tax advantages. An employer has right to ask for some medical proof for said short term disability of an employee. Besides, an employer can also make an employee use his sick days first before letting the provision of short term disability kick in.

Eligibility Criteria

There are certain criteria for being eligible to this insurance cover, without which an employee can’t claim for benefits of this insurance. The two most important eligibility criteria include:

  • The insured must have worked as a full time (30 or more hrs/week) employee for the employer before the occurrence of his/her illness, injury or pregnancy.
  • The insured must have been working for employer for a considerable period of time.

Some Facts

There is a time period limit to the advantages provided by this insurance to an employee, which usually vary from 10-26 weeks. However, if an employee wants the advantages to be extended further then he or she must opt for long term disability insurance. There is one thing to remember that unlike short term disability insurance, the long-term disability insurance is much lenient with different regulations. Although, it is not necessary to have the insurance cover financed by the employer, it is imperative on the part of the employer to establish it for his employees.