Group Short Term Disability

"Our human resource department is very busy with many issues, including union negotiations. Having BenefitsMart, who knows our company's needs, has been priceless."

Marsha Meltzer
Human Resource Manager
Madico, Inc.

Losing the ability to work can be devastating to a family’s emotional and financial well being. The exposure of disability, with its accompanying loss of income often is neglected by families in their financial planning and is not dealt with sufficiently by employee benefit plans.

The possibility of losing earnings due to an accident or illness is significant. In 1987, 32 million persons, 13.5 percent of the U.S. civilian non-institutional population, suffered a limitation of activity because of one or more chronic conditions. *(1989 source book of Health Insurance Data. Short-Term disability occurs more frequently than long-term disabilities LTD). For example, one to two employees will file claim for LTD out of 300-employee company, but 20 employees or more might file for a short-term disability claim.

Short-term disability income benefits apply to cases in which the injured or ill worker is unable to perform the duties of his or her current position. Benefits may be paid for as short as one week or may continue for as long as 52 weeks. Income replacement for short-term disability is available from four major sources: (1) self–funded sick leave plans in which company funds for the plan on their own; (2) Insured income replacement plans in which company insures the STD plan with an insurance company; (3) State-mandated plans which are found in California, Hawaii, New York, New Jersey, Rhode Island, and Puerto Rico.

The plan design has specific descriptions for qualifying for the benefit. An employee must be unable to work and be off the job, usually for the elimination period due to illness or an accident. Waiting periods vary and can be attained to company’s needs. The intent for the waiting periods is to discourage staying off the job. A common benefit for the income is stated in terms of hundreds of dollars per week or, a percentage of salary with a maximum for per week.

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