Picture this: You’ve been dealing with chronic back pain for years, and you’ve finally decided to go in for surgery to get it taken care of.
Your doctor is honest: The recovery is going to be pretty brutal. It’s going to take a long time (we’re talking several months) for you to feel remotely back to normal. Sitting at your desk five days a week is going to be next to impossible while you’re bouncing back.
Your mind is already cranking through all of the numbers to figure out how much money you’ll lose out on. How are you supposed to cover your expenses when you’re physically unable to work for that period of time?
This is one of many situations when it’s helpful to understand whether or not you have a short-term disability benefit—as well as how it works.
- What Is Short-Term Disability?
- Who Provides Short-Term Disability Insurance?
- What Counts as a “Disability”?
- Is Mental Health Covered With Short-Term Disability?
- How Much Time Off Do You Get With Short-Term Disability?
- What If You’re Still Not Ready to Go Back to Work?
- How Much Will You Get Paid When You Take Short-Term Disability?
- How Often Will You Receive Payments?
- How Do You File for Short-Term Disability?
- How Much Paperwork Is Involved?
- What Evidence Do You Have to Provide to Collect Short-Term Disability?
- Does Maternity Leave Count as Short-Term Disability?
- Is Your Job Protected While You Take Short-Term Disability?
- What’s it Like to Return to Work After Short-Term Disability?
- What Are Your Options If Your Short-Term Disability Claim Was Denied?
- Seriously, Do You Really Need to Understand Your Short-Term Disability Benefits?
1. What Is Short-Term Disability?
Short-term disability is a type of insurance benefit that provides some compensation or income replacement for non-job-related injuries or illnesses that render you unable to work for a limited time period.
2. Who Provides Short-Term Disability Insurance?
Your employer might offer you a short-term disability plan as a benefit. However, the vast majority of the time, companies aren’t required to. In fact, there are only five states (California, Hawaii, New Jersey, New York, and Rhode Island) where it’s mandated that employers offer a short-term disability plan to their employees.
Many employers choose to offer this disability benefit anyway, as they receive a federal tax deduction for doing so.
If your company offers short-term disability, it can be structured in two ways:
Self-funded or self-administered: Your employer provides and funds this benefit themselves.
Insurance: Your employer works with an insurance company to provide this benefit.
What if your employer doesn’t offer short-term disability, but you want it anyway? You can purchase insurance for disability privately, but for a pretty high price. The cost can vary based on your age and your level of benefits, but some estimates state that you should expect to pay between one and three percent of your annual gross income. So, if you’re earning a $50,000 salary, purchasing your own short-term disability policy could cost between $500 and $1,500 each year.
“It can be purchased by visiting an insurance agent in your state who is licensed to sell disability insurance,” explains Joseph McDonald, a partner at McDonald and McDonald, an Ohio-based law practice specializing in disability insurance. “The biggest barrier to securing private coverage is cost. Shop around to get the best deal.”
3. What Counts as a “Disability”?
There isn’t one standard definition for a disability that applies across the board here.
“It’s all plan- or policy-specific,” says Chicago-based attorney Michael Bartolic, whose firm focuses on employee benefits and deferred compensation. “As a general observation, it’s any sort of injury or illness that renders one unable to do their job.”
That could include things like childbirth, a major surgery with a long recovery period, an illness that requires frequent treatment, or an injury sustained in some sort of accident. Bartolic explains that the best thing to do is to check your plan documents, as the definition of disability should be clearly spelled out there.
4. Is Mental Health Covered With Short-Term Disability?
What if it’s not something physical that takes you away from the demands of your job? What if you’re struggling with depression or some other mental health issue that makes it nearly impossible to fulfill your work responsibilities?
Mental health can be covered by many short-term disability plans (again, it’s important to check your own plan documents). However, you’re going to need to have proof that this is an issue you’ve been struggling with for some time.
5. How Much Time Off Do You Get With Short-Term Disability?
While I might sound like a broken record, a concern like, “How long is short-term disability?” is another aspect that can vary depending on your own plan.
“By definition, it’s short-term, but it can range in duration. I’ve seen [coverage] be as short as 30 days and as long as one year,” Bartolic says, pointing to the maximum covered benefit periods he’s seen in his own practice. “It depends on the overall structure of the disability benefits through the employer.”
Your time off also depends on your specific health problem. “The medical field has guidelines as to how long recovery should take,” explains Bartolic. That provides a roadmap for your employer or plan provider to establish a reasonable amount of time for you to be out of work.
What if things are really serious and you’re not looking at a few weeks or even months away from the job—but much longer? That would fall under a long-term disability benefit, if your employer offers such a thing.
As the names imply, short-term disability is used to cover injuries or illnesses that persist for a shorter amount of time (usually less than six months or one year, depending on your plan). In contrast, long-term disability comes into play for any issues that will take you out of work for longer than that.
6. What If You’re Still Not Ready to Go Back to Work?
If you’re on short-term disability, your benefits will end when your predetermined time period is over or when you return to work—whichever comes first. But what if you’ve already maxed out your short-term disability benefits and you still can’t head back into the office?
Let’s return to our example of missing out on work for major back surgery. Your doctor determined that you’d need six months to fully recover, and your short-term disability plan approved you for that amount of time.
However, you had some pretty significant complications with your surgery and your recovery. As the end of those six months draw near, it’s evident that you aren’t physically capable of sitting at a desk for eight hours each day—this is a problem that will plague you for a lot longer, perhaps even permanently. Now what? Are you just out of luck?
If you have long-term disability benefits, it should be straightforward enough to transition into those benefits if you meet the new definition of disability for your long-term plan. The definition for disability under a long-term plan is typically subtly different than the definition for short-term disability.
“Some insurers require new paperwork from the claimant and new medical records before they will begin paying a long-term disability benefit,” says McDonald.
If it’s evident that your disability will render you unable to perform some or all of the duties of any sort of occupation (including unskilled, sedentary work), “the insurer paying your long-term disability benefit is typically going to recommend that you apply for Social Security disability, which can be a very lengthy process,” McDonald adds.
7. How Much Will You Get Paid When You Take Short-Term Disability?
When you take advantage of your short-term disability benefit, your time off is paid—but that doesn’t necessarily mean you’ll be getting your full paycheck.
The amount you’ll earn is dependent on your specific plan. Some plans offer full salary replacement, but most don’t. Instead, they offer a percentage of compensation (usually 50% to 60% of your weekly earnings) with a dollar amount cap.
“There are also programs that award you different amounts based on your longevity with the company,” says McDonald. “If you are there for 10 years and have a 26-week disability period, you might get three months at 100% and then three months at 50%.”
8. How Often Will You Receive Payments?
This is another area that can vary. Fortunately, your payment questions should be answered clearly within your plan documents.
Be aware that if your employer works with an insurer to offer short-term disability benefits, then payments will usually be administered through the insurance company. That means they might arrive on a schedule different from the payroll timing you’re used to (so you shouldn’t expect a deposit on your standard payday).
Meaghan Tiernan, a senior copywriter for a marketing agency in San Francisco, used her short-term disability for maternity leave. She was given a debit card that her short-term disability payments were added to.
“I think it was one lump sum every two weeks on an regular basis,” she explains. “They even include weekends, so it was typically every 14 days that I was paid. Then you’d have to transfer the funds from that debit card to your bank account if that was your preference.”
9. How Do You File for Short-Term Disability?
If you believe that you’ll need to take advantage of your short-term disability benefit, your first step is to make sure that your illness or injury is well-documented, as you’ll have to provide some medical evidence or backing.
“Consult with your doctor and find out what you’re up against first. Make sure you speak honestly about your symptoms and the things that you are experiencing. That medical record will be reviewed by an insurance company, so start out with a strong pronouncement of, ‘Hey, I’m having this problem,’” advises McDonald.
Then, approach your HR department to begin the process of filing a claim (which usually involves a fairly standard form). Don’t have an HR department? Connect with your manager or consult your plan documents to understand exactly what you need to do to submit your claim.
Be aware that short-term disability plans have a requirement for how many days you need to be out of work before you can claim disability—it’s called an elimination period. “The reason is that they don’t want to invoke short-term disability for something that could be covered by sick days,” says Bartolic.
10. How Much Paperwork Is Involved?
The exact paperwork you’ll be required to complete is again dependent on your specific plan. But the process typically begins with a relatively straightforward claim form that requires some information from you (about things like your medical condition and your contact details), your employer (about things like your job duties and salary), and validation from your doctor that your condition prevents you from working.
Fortunately, if you find yourself confused about any of the documents or applications, you can ask for help—whether it’s from your company’s own HR department or even people at your doctor’s office.
“I actually found the team at my physician’s office to be extremely helpful,” says Tiernan, who admits her own leave process was slightly more complicated, as she took advantage of both short-term disability and FMLA for the birth of her child (to learn more about the differences between FMLA and short-term disability, read this).
“They have a whole team dedicated entirely to filling out forms and navigating this process, so I was on the phone with them a lot. They helped me figure out the best forms to fill out, what the dates would be, and any follow-ups that I needed. They even spoke to my HR team directly here at the office.”
11. What Evidence Do You Have to Provide to Collect Short-Term Disability?
Your physician will need to sign off on your claim form before you even submit your application, to vouch for the fact that your injury or illness prevents you from working.
After you submit your claim, your employer or the insurance company who administers your short-term disability plan will request that you submit your medical records so that they can review them and verify that they’re consistent with your disability claim. Contact your healthcare provider’s office to find out the best way to send those records over.
12. Does Maternity Leave Count as Short-Term Disability?
You’ve probably heard of circumstances (like Tiernan’s, as just one example) where people use their short-term disability for pregnancy and maternity leave. Doing so is fairly common, but whether or not you’re able to do so yourself is also dependent on your plan.
“We actually see a lot of short-term disability policies that specifically address maternity leave,” explains Bartolic. These plans also will explain how much time off is offered for maternity leave, which can vary based on things like whether the mother had a vaginal birth or a c-section.
13. Is Your Job Protected While You Take Short-Term Disability?
Unlike a leave of absence you might take under the Family and Medical Leave Act (FMLA), short-term disability doesn’t offer any direct job protection. Many people are surprised to hear that you can legally be fired from your job while on leave, and you also aren’t entitled to the exact same position when you return.
However, the Americans With Disabilities Act (ADA) protects people who meet the ADA’s definition of disability, and makes it far more challenging for companies who are covered by ADA (those who employ 15 or more workers) to fire an employee due to their disability.
Before terminating an employee, the company must first determine whether or not there are any accommodations they could make (without causing the company “undue hardship”) that would allow the employee to adequately do their job.
The company must work with the employee to try several variations of accommodations in an effort to find something that works. If there’s no reasonable way to enable that person to fulfill the essential responsibilities of their position, only then can the employer explore termination of the employee.
14. What’s it Like to Return to Work After Short-Term Disability?
As the above answer illustrates, depending on your disability, different logistical elements obviously need to be sorted out upon your return.
But that’s not the only factor at play here—there’s also an emotional and relational element involved when you return to the office after an extended amount of time off.
“Most of it was just emotional and mental fatigue after having spent four months not really on a computer every day or using my brain in that kind of way,” says Tiernan.
“There was the expectation that I was going to be able to jump back in right away,” she adds. “Looking back, I appreciate that now because I don’t think I would’ve been able to transition as well as I had if it had been slow.”
In addition, companies aren’t stagnant and there are likely some larger changes that will happen while you’re out on your leave—including employees leaving and new team members being added. “There were shifts that occurred during my time gone, so I needed to readjust to the changes that had happened,” Tiernan adds.
15. What Are Your Options If Your Short-Term Disability Claim Was Denied?
“The first thing to do is to carefully read the correspondence that’s saying it’s not being approved,” advises Bartolic. “That will tell the person a lot, and will tell them what to do if they disagree with the decision.”
Most disability plans in America are covered under the Employee Retirement Income Security Act (ERISA), which means claims are reviewed through the lens of this federal law.
“If your plan is covered by ERISA, the law requires that the denied individual be presented with a right to appeal that decision. It’s a mandatory feature of it,” explains McDonald. “That period of appeal is 180 days. During that time, you have perhaps your single best opportunity to give evidence to the insurer or plan administrator about why they’re wrong and why you’re entitled to those benefits.”
16. Seriously, Do You Really Need to Understand Your Short-Term Disability Benefits?
Here’s the short answer: yes. While it’s not exactly a fun topic to think about, it’s important that you familiarize yourself with the details of your plan—so you don’t have to get up to speed when you actually need the benefit.
However, wading through our own plan documents is a step that most of us skip. That informational booklet is immediately relegated to our desk drawer or filing cabinet.
“Do you remember the first day you started your job? It’s kind of a firestorm—you can’t focus well or often,” says McDonald. “So we don’t spend a lot of time achieving clarity about the benefit in the beginning. We only acquire an understanding of it when we are in deep need of the benefit.”
But particularly if you have an existing problem or condition, you’re going to want to know the ins and outs of the benefit that’s available to you.
“Anybody who goes into a new job and has any kind of serious medical condition that could at some point in time render them unable to work, I think it’s a good idea to be able to see the actual short-term and long-term disability plan documents to see how they define disability and how they handle pre-existing conditions,” adds Bartolic.
Ideally, you’ll never have to take advantage of your short-term disability benefits. But in the event that the unexpected happens, you’ll be glad that you took the time to understand what’s offered to you. This explainer is a good place to start, but you also need to read through the details of your specific plan.
“Short-term disability is a great comfort when I think that most people define themselves by their jobs,” concludes McDonald. “We are wired that way and we gain some sense of identity from our work,” he adds. “Most people really don’t want to leave. Not only is there a fantastic disruption in your income, but there is really a disruption in your identity and in your ability to contribute to your family, to your organization, and to your peers.”
Your short-term disability benefit can ease at least some of these concerns. So despite the fact that curling up to read through your own plan documents might not sound like your idea of a good time, it’s still one of the smartest steps you can take.