Short-Term Disability

Short-Term Disability is a type of insurance that pays a percentage of an employee’s salary for a specified amount of time, if they are ill or injured, and cannot perform the duties of their job. Coverage usually starts anywhere from one to 14 days after your employee suffers a condition that leaves them unable to work. Many times, employees are required to use sick days before short term disability kicks in, if it’s an illness that keeps them out of work for an extended period of time. This is why there is usually a different policy for short term disability for sickness versus an injury.

A short-term disability policy can be an employer or employee paid benefit (voluntary benefit). Generally, though, short term disability coverage is employer-paid. Companies do have a choice of having employees pay for coverage, with certain tax implications. Group coverage for short term disability can be attained through an insurer or through a self-funded plan set aside by the employer directly.