Short Term Disability Insurance 101

Disability Insurance, Insurance

If you find yourself disabled for a short time, your employer may offer short-term disability insurance as part of your benefits package to help you retain some income while you recover. There will be a threshold employment requirement (a certain time of service and employment status) to be eligible. Typically, the range of benefits is between 50-75% of salary for between 10-26 weeks, depending on the program.

Unfortunately, if your employer does not offer this benefit, your governmental disability benefit options are pretty limited. Social Security disability payments from the federal government are not available if you are disabled for less than one year. Most state programs do not offer an alternative, either – however, there are five states where short-term disability insurance is mandated.

  • California – The California program covers the longest period of time – up to a full year of benefits, and potentially longer if you are able to resume part-time work and receive partial benefits during that time. You must have earned at least $300 in wages in a prior one-year base period and State Disability Insurance (SDI) taxes must have been withheld on those wages.

    You must file a claim with the Employment Development Department within seven weeks including a medical certificate of disability, and complete a seven-day waiting period after filing the claim. If you are declared eligible, benefits are usually paid every two weeks at 55% of your salary during the highest paying quarter of the base period.

    California’s law also covers some pregnancy and childbirth situations separately from maternity leave and the FMLA (Family Medical Leave Act).

  • Hawaii – Hawaii’s program covers 26 weeks of benefits with qualifications of at least 20 hours of work per week for at least 14 weeks with a minimum salary of $400 per week. It excludes federal government employees along with some domestic employees. Commission-only real estate and insurance agents are also excluded. Benefits are usually 58% of salary.

    Hawaii’s program is mandated insurance purchased through the employer and not a state fund, so your claim must be filed through the employer.

  • New Jersey – Benefits are available for 26 weeks in New Jersey with either 20 weeks of employment at $145 minimum per week in the previous year, or $7,300 total in the year regardless of the total weeks employed. You must have been employed at least two weeks before the disability occurred. Benefits are two-thirds of average weekly salary over a qualifying eight-week period, up to an adjusting benefit cap set by state law ($595 in 2014).

    Claims must be made through the state Disability Insurance Office.

  • New York – New York benefits cover 26 weeks, with pregnancy disability included. You must have worked at least four weeks for the employer. This may include domestic and personal employees working in a private home. Employers are allowed to collect up to 60 cents per week from employees to cover this benefit.

    Claims must be made within 30 days of the disability, and benefits are up to 50% of weekly wages below a state-set cap (currently $170).

  • Rhode Island – Rhode Island’s program covers up to 30 weeks. Qualifications are through a rather complex formula based on total wages defined either by a quarter or by a year.

    Claims are filed through the state Temporary Disability Insurance program and benefits are based on earnings over a quarter, bracketed by minimum and maximum payment amounts that periodically change. Check the state website for the current brackets and qualifications.

If you live outside one of those states, check with your state Department of Labor or similar organization to see if any state-based assistance is available. For example, Maryland has a Temporary Disability Assistance Program that offers some assistance with housing and medical issues, as well as providing some cash.

Otherwise, assuming the disability was not the fault of the employer (which would be a Worker’s Compensation issue), you are dependent on whatever benefit program the employer offers.

We hope that you will never have to consider short-term disability benefits or disability benefits of any kind – but if you do need them, it is important to know where they are available, and who provides them.

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