How Does Short Term Disability Insurance Work For Health Insurance?

By Cathy Wilson Posted in Health Insurance News

Short term disability insurance is a form of insurance designed to make sure that employees receive a percentage of their income when they have to stay away from work due to a temporary disability or sickness. The insurance coverage takes effect anywhere within one day to 14 days after the employee has to stop work due to an illness or injury. A different policy is usually used to cover short term disability due to sickness. Short term disability insurance is a mandatory requirement in some states like New Jersey, Hawaii, Rhode Island and New York. In those states short term disability is required to provide benefits for up to 26 weeks. Other states do not mandate it.

Who Pays For The Short Term Disability Insurance Coverage?

The cost of the insurance coverage can generally be paid for by either the employer or the employees. It is usual practice, however, for employers to bear the cost associated with short term disability health insurance. Some employers, however can decide that the insurance cover be paid for by the employees (with tax implications). Companies can arrange for group coverage for their employees by making arrangements with an insurance company to provide coverage for its employees. Another way is by the employer creating a self-funded fund.

Some Terms of Coverage

To qualify for short term disability insurance, employees need to be employed full time (minimum of 30 hours per week). Employees must have also worked for the employer for a specified period of time to be able to benefit from the coverage. Short term disability insurance benefits usually last between 10 and 26 weeks and the percentage of weekly salary paid to the employee is usually within 50% and 70%. Employers may require their employees to first use up sick days before being covered by a short term disability cover. Doctor documentation to prove an injury or illness may also be required.

Related posts:

  1. How Does Long-term Disability Work For Health Insurance?
  2. What Does Disability Insurance For Health Care Entail?
  3. What Is A Health Reimbursement Arrangement For Health Insurance?
  4. What Are Low Cost Health Insurance Options for The Self-Employed?
  5. How Does Comprehensive Health Insurance Policy Coverage Work?

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