Short Term Disability Policy

Paula_AZ · April 2003

Hello, All
Our short term disability policy is about 15 years old and STINKS with a capital S!
It is provided at no cost to the EE, and allows for up to 26 weeks of 66 2/3 salary, not to exceed $200. Yes, that's right, it caps at $200! It's just about enough to pay for doctor co-oays and prescriptions, with little left over for living expenses.
There is a 90-day employment requirement, a 1-day waiting period for "accidents", 8-day waiting period for "illness". The employee must return to work for 2 weeks full-time before he/she can qualify for another STD period.
We currently have an employee out from an emergency surgery for a blood clot in her leg. Since the terms "accident" and "illness" are not well-defined, we could not figure out which one this incident fell under. And since the owner of our company was appalled to see the cap was only $200, he authorized me to continue her at full salary for 4 weeks. We are meeting next week to discuss changes to this laughable policy.
As I am new to the company, I really want to WOW the owner with a comprehensive policy that supports the employee but doesn't hurt the company too much financially. Unfortunately, I have very little experience with these types of policies.
Anyone care to share your policy with me? My email address is [email]paula.harmon@dhscorp.com[/email]. Any responses will be GREATLY appreciated!

Brad Forrister · April 2003

I'm unclear - is this an insurance policy, with the company paying the premiums and the employees getting the benefits, or is it a company policy on what it's going to do out of its own pocket for disabled employees?

Brad Forrister
Director of Publishing
M. Lee Smith Publishers

Paula_AZ · April 2003

I apologize for the confusion. Actually, we are the insurance company, so our company policy may very well be the insurance policy and it's just written however we want it. Our business is self-funded health insurance - we have one company that handles the underwriting, another that oversees care management (mostly case management and utilization review nurses), and another that handles prescription benefits. Since the employees don't actually enroll when they are hired, my guess is that it's handled as a company policy. Clear as mud, right?

LindaS · April 2003

Our STD policy (for non-exempt employees) is covered as part of our health insurance and as such the premium the employees pay has it included. Our plan is as follows:

Payment is made from day one for accident and after a seven day waiting period for illness. If an employee is hospitalized they are paid from the first day regardless of illness or accident. If the employee becomes hospitalized during the 7 day wait under illness, payment reverts back to the first day and is paid. The employee is paid a set dollar amount (currently $255.00) per week for up to 26 weeks in a year.

Our exempt employees have a "salary continuation" policy wherein an employee who is unable to work, due to either illness or accident, continues to receive their full salary for up to three months. If, after the three months, the employee is still unable to return to work they begin receiving 60% of their salary for another three months. If they are still unable to return after that time, they must apply for LTD.

Hope this helps.

crawfod · April 2003

STD plans I am familiar with generally require 6 months employment, have waiting periods ranging from one week to 30 days from the date of disability, and pay 60% of the base salary for approximately 6 months with caps that usually only affect the highest paid employees, and then the employee switches over to LTD coverage, which pays the same percentage but on a monthly basis instead of weekly. Naturally medical verification of the disability is required in the beginning and to continue benefits. My current employer has sick leave, which cannot be taken in conjunction with STD, so since that sick leave pays 100% of their salary, most employees use that and rarely need STD. So we are paying premiums for a benefit with little use. Of course, with limited use our premiums are low, but I am still exploring other options to help people through this time. There are a number of insurance companies that should be able to give you quotes on their plans, and you can probably fine tune it to your wants.

Short Term Disability Policy

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