Short Term Disability Insurance and Benefits Completely Explained, Part 2

(Note: the following is geared towards the State of California. Your state will likely have something very similar, but be sure to check your state regulations and your policy's terms and conditions.)

As readers of my blog and website, most people know that I like to keep things light and fun. Unfortunately, the subject doesn't really have a light side and it's certainly not fun. I mean who really wants to talk about getting injured, right? So I apologize to this article is a little bit dry and boring, but I think that you'll find it very informative.

Continued from part 1

It's important to know that if you have individual short term disability coverage that you are responsible for all of the costs... not your employer. Your employer is not required to offer short term group disability because it protects you from off the clock injuries and illnesses. However, since your coverage is offered by your employer, your premium payments will be deducted from your paycheck on a pretax basis and will therefore save you a great deal of money versus purchasing it on your own. So, be grateful that your employer is offering short term group disability insurance even though they don't have to.

On the other hand, if you have group short term disability coverage, you may be responsible to pay nothing, to pay a percentage of the cost or to pay a set premium. Concerning employer-sponsored short term group disability coverage, you will be responsible for paying the amount above what you're employer has chosen to pay and is determined by agreements between the insurance company and your employer. For an explanation of your benefit details, your employer, human resources department or personnel staff can explain these benefit details.

What kind of requirements, do I need to meet for enrollment and eligibility?

The type of short term disability coverage do you have, whether it's a group or individual determines their requirements for enrollment and eligibility. If your short term disability coverage is set up through your employer, there are active work requirements that need to be met, including working a minimum number of hours per week. Disability coverage can be used to replace part of your income if you suffer from a disability that makes it impossible for you to work as long as you met the service wait and pre-existing condition exclusionary periods. You will also be required to retain membership to continue to be eligible for benefits through a professional group or association.

What restrictions are there with the short term disability coverage?

When it comes to disability coverage, a lot of people believe that there are restrictions based on their income. This is not really true. The amount money you make does not determine whether or not you can purchase disability coverage. However, many insurance policies determine the amount of money that you can receive per month by setting the top dollar amount paid out along with the percentage amount to be paid.

For instance, if you earn $5,000 per month, your insurance policy might state that you can only receive a maximum of 70% which would equate to $3500 per month. Another policy might state that you can receive 60% of your income up to a certain amount, for example, $2000 per month. And yet another policy might state that they will cover the difference between 70% of your income minus what the state will pay. For example, if you qualify for California disability insurance, you can receive 55% of your income up to $500 per week. If you are paid $1000 per week by your employer normally, this type of policy will pay $200 per week (70% times $1000 -$500 equals $200.) This is why it's very important to know how much your particular, short term disability policy will pay in case you are disabled. If it is not enough for you to cover your expenses, you should seriously consider purchasing supplemental disability insurance from a company such as Aflac.

What's the difference between private short term disability coverage and federal and state programs?

Now, many people wonder what the differences between private disability coverage and state and federal disability programs such as Supplemental Security Income (SSI) and Social Security Disability are. Well, private disability coverage does not restrict based upon income or assets and coverage varies between insurance policies. In addition, instead of providing California State Disability (SDI), some employers provide short term disability coverage instead. On the other hand, state and federal income programs such as Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) are public benefits and to be eligible to receive benefits, you must meet specific requirements but you do not have to belong to a group or association. Furthermore, as long as you are legally authorized to work in California, whether you are a US citizen or not, you can qualify for disability insurance.

What happens if I am laid off or fired?

Next, there are many group, short term disability plans (such as with Aflac) that can be carried with you when you leave your job, your association or your group as long as you keep making your premium payments. Not all plans are like this, so be sure to check your plan to see if it is portable. On the other hand, if the short term disability policy does not allow you to take it with you, you must reenroll and a new program during the initial enrollment and then complete both these service wait, and pre-existing condition exclusionary once again. Because of this, it's highly suggested that if you can transfer your short term group disability plan when you leave your job or group that you continue to stay with the short term group disability plan that you are a qualified for.

How long does short term disability last?

Disabilities that last longer than 12 months are considered long-term disabilities and since some short term disabilities turned into long-term disabilities, it's very important that you make sure that you are covered with long term group disability insurance as well. It's better to have it and not needed it down to need it and not have it. In addition, there are many additional disability benefits programs provided by the state of California (SDI), or the Social Security Administration (SSDI) that may be possibly available to you depending on what benefits your employer provides and depending upon your work history. Also, you might be eligible for continuous private health coverage through COBRA, OBRA, Cal-COBRA or HIPAA. And in a few instances, you might be eligible for Medi-Cal (Medicaid) or for Medicare after waiting periods have been met. However

Finally, if you leave work or have to reduce your hours because you are ill or suffer from an injury, you might be eligible for a partial benefits if your policy states this so be sure to check your policy description for details. And because of all the confusion that can result from trying to understand policies, you should consider speaking with a counselor concerning State Disability Insurance (SDI), Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).

Short Term Disability Insurance and Benefits Completely Explained, Part 1

Click here for California state disability details

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