Short Term Disability: What You Need to Know

Did you know that one of every four young people might need a Short Term Disability before retiring? If you’re going through health issues that are keeping you from work, you must know how your insurance works.
In case your condition is considered a short term illness or injury, you’ll qualify for the disability insurance benefits. This way, you'll be able to protect your savings from being wasted on your bills.
If you’d like to learn more about Short Term Disability, you’ve come to the right place! We’ll provide you with what you need to know and expect. So, keep reading!

Definition of Short Term Disability

Short Term Disability, also known as STD, refers to an injury or illness that makes a person unable to work for a short time. If the situation lasts for less than six months or a year, it’s considered a temporary condition.
Consequently, Short Term Disability insurance covers these health issues. When your condition qualifies as one, you get paid a percentage of your salary to cover your monthly expenses and retain your way of life.

Conditions That Qualify as Short Term Disability

For a condition to qualify as a Short Term Disability, it must have the following aspects:
  1. A person must be unable to do his job due to a proven medical condition.
  2. The medical condition should last from weeks to months.
For specific examples of non-permanent illnesses or injuries, let’s read the following:
  • Surgery rehabilitation
  • Bone fractures
  • Pregnancy
  • Acute illness
In addition, Covid-19 has been included in the Short Term Disability insurance because, for some people, the acute persisting symptoms may last for months, leaving them unable to work. As a result, your doctor must verify your condition is holding you back from going to work and working from home.

Duration of Short Term Disability

The duration of Short Term Disability is determined based on your employment plan and health problem.
In some plans, an injury or illness that lasts less than six months is considered a short term issue. However, the duration may vary based on your employer’s plan and your condition.
For example, Short Term Disability offered by some companies in the state of California typically covers a maximum of 25 weeks.
Having said that, your employer should be able to inform you of the specific duration according to your medical condition report. That’s because it’ll give them a better idea of how long it’ll take you to recover.

Short Term Disability Coverage

Short Term Disability insurance plans allow you to choose the suitable coverage for your monthly expenses, such as:
  • Rent
  • Mortgage
  • Car loan
  • Utilities
Some Short Term Disability plans may provide 100% of your payment, while others may cover 60% to 70% of your pay.

Work Policies and Short Term Disability

Not all companies offer Short Term Disability among their employment perks. That’s why you need to check with your employer. For instance, living in the United States, you need to learn more about the states that mandates Short Term Disability benefits.
Short Term Disability insurance provides you with compensation during temporary disability that’s not job-related.
For this reason, it’s worth asking your employer about their policy regarding temporary health issues. That’s because some employers have insurance plans that fully cover your payment, whereas others have policies that require some deductions from your salary.
Finally, if your employer doesn’t offer Short Term Disability benefits, you may consider buying a private insurance policy. But this approach is pricey, as the cost ranges from one to three percent of your annual gross income. Besides, experts believe it’s not worth the cost. So, utilizing your savings will be a better option.

Payment Rates and Short Term Disability

Short Term Disability rates vary from company to another or state to another. For instance, the state insurance in California had a taxable wage base of $118,371 in 2019 and 1% of an employee contribution rate. So, the maximum weekly benefit is $1,252.
Notably, temporary disability programs are updated annually. In 2022, the state disability rates in California are as follows:
  • $145,600 taxable wage limit per year
  • 1.1% withholding rate
  • $1,540 maximum weekly benefit

Short Term Disability Application

Thankfully, the application process is short so that you can quickly get the necessary funds. Otherwise, your savings might be exhausted in under six months.
When applying for Short Term Disability, you should talk to the HR department or doctor’s office as soon as you become ill or get injured. Afterward, you get your claim document signed by your doctor. After submitting your application, and the necessary documents, you may receive your benefits after seven days.
On the other hand, you can’t apply for Short Term Disability if the duration of the health problem can be covered by sick days. You can’t also claim Short Term Disability insurance if you don’t have the necessary medical records. These records are going to be reviewed by an insurance company.
If your application didn’t qualify for Short Term Disability or you haven’t received any notice yet, you may appeal within a definite time frame.
It’s noteworthy that social security only covers total disability. According to social security rules, non-permanent conditions should be covered by insurance, compensation, savings, or investments.

Returning to Work after Short Term Disability

Unlike long-term disability, Short Term Disability doesn’t state job protection or guarantee to return to the same position. Consequently, it’s not illegal for your employer to dismiss you from your job.
Although you could return to your old job, you may still need physical and psychological support to deal with fatigue and adapt to the workflow changes.

Conclusion

Even though STD benefits can replace your paycheck, their duration is limited by your employment plan and your medically estimated recovery.
As a rule of thumb, Short Term Disability insurance covers medical conditions lasting less than six months. However, durations vary according to your employer’s plan and medical condition.
Having read our extensive guide, Short Term Disability: What You Need to Know, you must know that it’s worth your effort and time to enquire about the available plans with your employer to protect your income and keep your lifestyle.