What Is Short-Term Disability? How It Works, How to Apply, and What Qualifies

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An unexpected medical procedure could force you to miss work for a few weeks or months. However, if you qualify for short-term disability insurance, you may still receive a portion of your pay while you recover.

Short-term medical disability insurance offers coverage for serious illnesses and injuries. It can help people avoid major financial problems and have time to recover from a temporary disability. This article breaks down how short-term disability works and how it differs from the Family and Medical Leave Act (FMLA).

What is short-term disability?

Short-term disability insurance provides financial assistance by replacing a part of your salary if you are not able to work after a qualifying temporary illness, surgery, or injury. Missing work for a less serious illness like a cold or the flu doesn't count, as these conditions typically don't prevent you from working for an extended period.

Short-term disability typically covers a period ranging from a few weeks to six months, while long-term disability insurance provides coverage over a longer period of time, such as 5 years, 10 years, or up until retirement.

Short-term disability insurance may be included in your employer's group insurance plan or purchased on your own. Before you start receiving benefits, you'll need documentation from your healthcare professional to prove that you are unable to work for a certain period.

Short-term disability is not the same as workers' compensation. Workers' compensation is solely for injuries sustained on the job.

Short-term disability vs. FMLA

The Family and Medical Leave Act (FMLA) allows eligible employees to take up to 12 weeks of unpaid medical or mental health leave a year. The FMLA applies to the following scenarios:

• Birth and care of a newborn within a year of birth

• Care of an adopted child or foster child within a year of placement

• Care for a child, spouse, or parent who has a serious health problem

• Care for a serious personal health problem

The law applies to employees of public agencies, schools, and companies with 50 or more workers. Even though the FMLA doesn't provide for paid leave, it protects your job. This is not the case with short-term disability insurance.

Another benefit is that you do not have to pay to take advantage of rights guaranteed by the FMLA. But you will need to have worked for your employer for at least 12 months.

What qualifies for short-term disability?

To use short-term disability insurance, it must be determined that you cannot perform your normal job duties. A doctor or healthcare professional must provide a signed evaluation stating this.

Your policy sets forth what illnesses and injuries qualify. Here are common ones that may qualify you if you're unable to work:

• C-section

• Injury from a major accident

• Uterine fibroid removal surgery

• Long COVID

• Childbirth

• Side effects from medications or medical procedures

• Some mental illnesses

The following are not covered:

• Cosmetic procedures

• Injury while committing a crime

• Self-inflicted injuries

Short-term disability policies usually do not cover preexisting conditions. A preexisting condition is a disease or illness that you had before you signed up for your insurance policy.

How does short-term disability work?

You may have to wait a period of time until you can enroll in a short-term disability plan at work. This could be 2 weeks or even a year. If you have to miss work because of an injury or illness and are still waiting to enroll, you may have to use your sick time or paid time off (PTO).

If you are already enrolled and need to file a short-term disability claim, reach out to your human resources department. You and your employer must complete forms that provide details about your illness or injury and why you cannot work. You will also need your healthcare professional to fill out part of the form and sign it. Make sure you send the completed forms to the insurance company in a timely manner to avoid delays in coverage.

How soon will I receive short-term disability payments?

You will not begin receiving disability payments immediately after you file a claim. There is an elimination period, which is the time between when you become ill or injured and when you start to receive your benefits. This timeframe can vary based on your policy and the procedures of your insurance provider or employer but it will typically be 7 to 14 days after you become disabled and unable to work. If you only expect to be unable to work for about a week, you may want to use your paid time off instead.

If you're purchasing your own short-term disability insurance, you should ask about the policy's elimination period. You might want to shop for another policy if the elimination period is longer than 14 days.

How much does short-term disability pay?

How much your short-term disability insurance pays depends on your policy. Generally, the range is 40% to 70% of lost wages.

You will usually get paid every 2 weeks from the insurance company. The timing may be different from your typical payroll schedule, since the insurance company controls the payments.

How long does short-term disability last?

Generally, you can receive benefits for 3 to 6 months at a time. But some policies may allow you to receive payments for up to 1 to 2 years.

What states require short-term disability for employees?

California, Hawaii, New Jersey, New York, Rhode Island, and Puerto Rico mandate that employees are offered short-term disability coverage. Specific mandates vary depending on state or territory law, as summarized in the table below.

Source: State websites

How to apply for short-term disability

Short-term disability insurance is usually part of a group plan that is provided through an employer. This type of coverage is called guaranteed issue. That means you automatically qualify for coverage without the need for underwriting. The same goes for long-term disability insurance.

To get details about your plan, contact your human resources department or check the company's benefits portal.

Short-term disability not through an employer

You can contact a private insurance broker or agent to purchase a policy on your own. However, the costs can be high. You will also go through an underwriting process, during which an insurance company evaluates your eligibility based on factors like your age and any preexisting conditions.

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