About Private Short Term Disability Insurance

Short-term disability insurance provides financial assistance while an insured worker recovers from a disability medical condition. The two most prevalent sources for short-term disability are state-operated worker compensation programs and private insurer plans. Depending on what state you live and what program you have, short-term disability can pay while you are being assessed for your disability or may pay a lump sum for back benefits after determining your impairment. The payment will cover the period between the onset of your condition and the date of final determination.

Workers' Compensation

• Workers' compensation programs are state-run agencies protecting workers from loss of income resulting from on-the-job injuries. The one major difference between different programs is whether benefits are paid if the worker is injured or only paid if the worker is injured on the job. Some programs only provide benefits for job-related injuries while others insure workers if they cannot work no matter the reason. Although state-operated, worker compensation programs are considered private because they are wholly funded by worker contributions and not funds from the general treasury.

Private Insurance

• Private insurance will also provide short-term benefits for workers unable to earn an income. Programs vary but most only pay benefits after any paid medical leave is exhausted. If a worker has three weeks medical leave and is unable to work for 12 weeks, then benefits are available for nine weeks.

  Of course, the one advantage of private insurance programs is covered workers can purchase programs as extensive or basic as is affordable. With higher premiums, workers can be insured for short terms because of medical issues with family members, and secure additional coverage for outstanding loan payments and mortgage insurance programs.

Qualifying

• The most stringent requirement for short-term disability insurance is the worker or insured dependants must be unable to earn any income. This is determined by extensive medical documentation. All short-term disability insurance claims are determined based on medical evidence of the worker's condition. Just saying your back hurts is not sufficient. A physician's report, imaging studies and a full range of motion study will be used to assess whether or not short-term disability is warranted.

Payments

• Short-term disability payments can be either regularly scheduled (weekly, monthly, etc.) or a lump sum payment. Many insurers will pay a lump sum if the determination was made after the condition improved to the point the worker could resume earning an income. If, though, there was appreciable time when no income was earned then benefits for that period can be paid.

Social Security

• One quick note about Social Security disability---there are no Social Security short-term disability programs. The first requirement for receiving any disability benefits from Social Security is the disabling condition must last 12 months. Usually, a year without the ability to work exceeds the proscribed definition of "short-term" disability.