Imagine this scenario, an unwed middle-aged lady, Sandy, being the sole caretaker for her 85-year-old mother. Sandy still worked full time and would help her mom in the evenings and weekends. Unfortunately, Sandy was in a serious car accident and would be out of work for at least 8 weeks. She now faced the challenge of paying her bills while out of work and finding someone to help her mom until Sandy could get back on her feet.

There are only so many ways you can plan for the unexpected.  Short-term disability insurance is one.  Yet many people may not know exactly what short-term disability is or how it can benefit someone who has experienced an unexpected illness or injury that may prevent them from being able to work for an extended period of time.  There are also the planned events, such as surgery to correct a chronic health issue for which you will need some income to help cover the procedure and other expenses incurred during your time away from your job.  It is estimated that on a yearly basis, an average of 5.6 percent of workers in America will have a need for short-term disability.  Here is an overview of what short-term disability insurance is and what it can and cannot do for you during the unplanned and most likely unwanted downtime you hope you never have.

The short-term disability is used for non-work-related illnesses or injuries, as opposed to a worker’s compensation policy, paid for by the employer, that provides income replacement for a work-related injury.  As the name suggests, the short-term disability is active for a limited period of time, is often offered as part of a benefits package, and may be purchased on your own through a private insurance agent if your employer is not mandated to offer it.  Currently, there are only five states where it is mandatory for employers to offer this type of coverage to their employees.  These states are California, New York, New Jersey, Hawaii, and Rhode Island.  Of note, the income replacement from a short-term disability insurance policy will seldom cover 100% of your income but typically will cover anywhere from 40% to 70% of your income depending on the policy terms.

The time covered by short-term disability can range from 30 days to sometimes up to a year depending on the policy, but it is important to know that your job is not guaranteed should you need to use short-term disability.  It may be possible to transition to a long-term disability plan once short-term benefits are used up and you are not ready to return to work.  Another important thing to know is what the elimination period is for the policy.  Employers do not want to start paying for an illness or injury that could possibly be covered by an employee’s “sick days” fund, therefore there is an elimination period associated with the policy, which means that the policy may dictate how many days you would have to be off work with the disability before a claim could be filed.

Fortunately, there are many conditions that qualify for a short-term disability that even include many mental health issues.  As mentioned earlier, if there is a need to be off work for a planned procedure that will render you unable to return to work for a while, you will want to be sure your policy covers that issue and time needed to recover when planning for your care needs.  There may be limits to what one employer covers versus another, and conditions that are covered should also be part of your consideration when choosing a plan should you decide to purchase your own policy.  Unfortunately, pre-existing conditions are not covered by short-term disability, nor can benefits be used to take time off from work to care for other family members who are sick or injured.   In general, the short-term disability plan, when you are informed and knowledgeable of how it works, can be a benefit that may provide some peace of mind should an unexpected health crisis happen.

We help people of all ages plan for the unexpected so that their wishes will be carried out. Through the use of legal documents like a living trust, power of attorney, and health care directives, we make sure your home, your savings, and your family are taken care of if the unexpected happens. If you’d like to discuss ways we can help, please  contact  our office at 973-226-0050.

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