If you’re suffering from an illness or injury that causes you to become absent from work for a short period, you may apply for short-term disability insurance.
This will provide protection for your income, ensuring the financial stability of your household when you’re unable to work. Here we’ll give you all the info you need on short-term disability, highlighting how it works, its advantages, and more. Read on to find out more.
The Role of Short-Term Disability Insurance
Besides covering your income when you’re unable to work, short-term disability insurance has another crucial role: it reduces administration costs for claims that need payouts only for a short period.
Typically, this insurance plan provides coverage from the first day after the event that caused disability, up until the end on your benefit period, which can be dependent on the policy and type of illness/injury.
Disability Insurance Benefit Schedule
The benefit schedule is calculated after the percentage of your regular weekly gross income. Here, the tax status of your future benefit is also considered, unless you pay all the premiums yourself, your benefits will be taxable as income.
In this case, the plan will be based on a higher percentage of your income. Whereas with non-taxable benefits, a lower income percentage is used to calculate the benefit schedule.
Benefit Maximum
Based on the nature of the business the company/employee works in, the volume of insurance and group size, short-term disability comes with two maximum types: overall benefit and non-evidence.
The latter is the amount the insurance company gives the insured without requiring medical documentation of their health status. The overall maximum is the highest amount the insurance company provides (based on their contract) to those who qualify through medical evidence of their disability.
Benefit Period
The maximum amount you can receive short-term disability insurance (also known as benefit period) is usually around 15 weeks but can be extended to 26 weeks.
After this time, it’s determined whether the insured can resume work, or can qualify for long-term disability insurance. A person who becomes permanently disabled may be able to switch from short to long-term disability benefits seamlessly.
Short-Term Disability and Employment Insurance
Besides short-term disability, you may also qualify for Employment Insurance Sickness Benefits when you’re out of work due to an illness or injury. If you receive both, the latter will be reduced. Employment Insurance Sickness Benefits usually start payouts on the 15th day and continue for 15 weeks after the event that leads to disability.
The two benefits can be integrated, so the short-term benefit will be applied for the first 14 days, and the Employment Insurance Sickness Benefits afterward, with no overlap between them (and no reduction either).
Understanding Short-Term Disability Coverage
You may be able to get short-term disability insurance through your employer. It’s often called a group plan as it applies to a group of employees. If you do, make sure to familiarize yourself with the coverage and the benefits included in your employer’s plan.
If your employer doesn’t provide short-term disability coverage, you may still qualify for Employment Insurance Benefits.
You should also look into:
- The coverage amounts (how much you receive and how often)
- When you start receiving the benefit
- Whether the benefit is taxable
- Whether the plan covers third-party claims from medical care management services
Recovery and Treatment Timelines During Short-Term Disability
Before you make a claim on short-term disability insurance, consult with your healthcare provider about your condition. If they say that you’ll be able to return to work after a maximum of six months, you can get income coverage during this period. However, if they recommend that you remain off work longer, you should start thinking ahead for long-term disability benefits.
Applying for Short-Term Disability
The application process can vary depending on the type of coverage you have and your insurance company’s requirements. Make sure to provide accurate information and answer all your insurer’s questions honestly to save time and energy on double-checking.
You’ll also need a valid identification document (passport, driver’s license, birth certificate, etc.) Ask your healthcare provider for your clinical records and whatever other information your insurer may require of them to adjudicate your benefits claim.
Next, if you’re employed by another person or company, you’ll also need to provide their address. Other information you may need includes your bank account number for the payments and a mailing address for official communication.
Application for short-term disability benefits must be submitted within 30 days of the event that led to your absence from work. Insurers decide on whether to approve the claim or deny it within 10 business days.
Final Thoughts
Short-term disability can be a lifesaver when you’re unable to earn an income for a short period. It can cover your income for up to six months after you stop working and can be integrated with Employment Insurance Sickness Benefits for added security.
If you’re an employer or an individual looking for disability or health insurance cover, then contact Buckler Insurance today. We’ll happily go through your circumstances and ensure you get the coverage you need.
