Must Short-Term Disability (STD) Leave Include STD payments?

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We are self-funded on our STD plan.  Our STD benefit offers up to 60% of pay, to a maximum of $5,000/month.  The actual payment figure is reduced by any other supplemental income (annual leave or WC) that the employee is receiving during the leave period.

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I am now faced with a scenario that has not arisen since we instituted our STD policy.  Back Story: Generally, employees (ee) that apply for STD have little or no supplemental income coming to them (they’ve used all their annual in a relatively short time, or their case does not qualify for WC payments)  so classifying them as STD eligible and paying up to 60 % is generally a non-issue.

 

However, as we speak, one ee whose case is a bit different. This ee has 200 hours of leave that must be exhausted before STD payments kick in. Foreseeably, her annual leave may not run out before she is eligible to return to work, and she will not receive STD payments.  However, if 90 days out (the time frame through which she can be STD eligible), she still cannot return and her leave payments run out, she will most likely wish to apply for Long-Term Disability (LTD).  The thing is that our insurance company that administers LTD will not classify her as LTD eligible without having been on STD.  

 

My question is, could we classify her status as STD without providing STD payments, as she has enough annual leave to pay her 100%? If not, what is the way out of this pickle?

 

By the way, she has already been designated for FMLA, for those of you wondering why I did not speak to that.

TXHRGuy

Ask your LTD provider IMO.

You don't want to designate STD eligible and then do anything that isn't within your STD policy.  Going forward, you may want to consider making it possible to designate someone STD eligible but unpaid because the benefit is offset by supplemental income.  It sounds like not being able to designate is the root of the problem.  That and whatever HRforME says. [^o)]