Short-Term Disability Insurance
...Why Should Your Business Offer
Short-Term Disability Insurance?
1. Protect Employees' Finances.
In the event an employee has a covered illness, injury or pregnancy and is unable to work, having short-term disability insurance can help protect the employee's finances. Typically, short-term disability policies offer benefits up to 13 or 26 weeks and pay 60% of weekly earnings. Many employees rely on every paycheck to cover essential expenses. Without short-term disability insurance, they could suffer financial hardship. Offering short-term disability insurance can make a huge difference for employees in case pregnancy, injury or illness causes them to miss work.
2. It is Very Affordable and is a Valuable Benefit for Employees!
Typically, short-term disability insurance is an employer-sponsored benefit, meaning the employer pays the premiums to provide coverage to their employees. The cost of short-term disability insurance can vary depending on several factors, such as the size of the employer's workforce, the industry they operate in and the level of benefits offered. The premiums can range from a few dollars to several hundred dollars per employee per year, depending on the factors mentioned above. Some employers choose to share the cost of premiums with their employees or they offer it as a voluntary benefit in which the employee pays the full monthly premium.
Examples of How Short-Term Disability Insurance Helps Employees.
Let's say Jill is an employee who makes $1,000 per week. Jill takes time off from work due to a pregnancy and delivery. Jill's employer offers short-term disability insurance that provides income replacement for up to six weeks following a vaginal delivery or eight weeks following a cesarean delivery, paying 60% of the employee's usual weekly earnings. Jill is enrolled in her employer's short-term disability plan and files a claim with the insurer. If approved, Jill will receive $600 (60% of her usual weekly income) per week for the designated time period, providing financial support during her recovery and bonding time with her new child. Please note that the short-term disability benefit can be taxable or tax-free to employees (depending on how the employer set up the plan).
Example 2
Let's say Joe is an employee who makes $1,000 per week. Joe gets in a car accident and sustains injuries that prevent him from working for eight weeks. Joe's employer offers short-term disability insurance that provides 60% income replacement for up to 13 weeks. Joe is enrolled in his employer's short-term disability plan and files a claim with the insurer. If approved, Joe will receive $600 (60% of his usual weekly income) per week for the eight weeks he is unable to work, providing financial security during his recovery period. Please note that the short-term disability benefit can be taxable or tax-free to employees (depending on how the employer set up the plan).
Example 1
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