Short-Term Disability Insurance (STD)
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The Basics
Short-Term Disability (STD) is private insurance that replaces some of your income if an injury or illness prevents you from working. While you are away from work, it pays you a certain percentage of your income for a set period of time. Some employers provide group STD policies as part of their benefits packages. If your employer doesn’t offer STD, or you want additional coverage, you can buy an individual policy from an insurance agent.
Every STD policy has different features. Your Human Resources department (or your insurance agent if you have an individual policy) is usually the best source of information about your specific plan.
Short-Term Disability (STD) Insurance is not a government benefit, and it is not connected to any public benefit program. It is private insurance coverage that you get through a private company. To find out if you have STD coverage through your employer, talk to your Human Resources person.
There is a totally separate public benefit program that also helps people who become disabled for up to a year. It is called State Disability Insurance (SDI). It covers most people in California who are working. If you become disabled and are unable to do your job, you may be able to get SDI benefits, whether or not you also get STD. To learn more about SDI, read DB101's SDI article.
Note: If you are looking for information about Social Security benefits for people with disabilities, see DB101's Social Security Disability Insurance (SSDI) article and DB101's Supplemental Security Income (SSI) article.
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Long-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. LTD may continue for years.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Short-Term Disability Insurance (STD)
- The Basics
- How Does STD Insurance Work?
- How Do I Get STD Insurance?
- Other Information
- Example
- FAQs
- Pitfalls
- Resources
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How Does STD Insurance Work?
Group versus Individual Coverage
Some people have Short-Term Disability (STD) insurance through an employer, union, or other professional organization. This type of policy is known as group coverage. You can also purchase individual coverage directly from an insurance company or agent.
The General Design of an STD Policy
Most STD policies have the same general design. You, or your employer, pay a monthly premium to be covered. When an illness or injury prevents you from working, you apply for a benefit by speaking with your Human Resources representative or your insurance agent. Most STD policies require a document from your doctor that explains your condition and estimates how long you’ll be gone from your job. There will probably be a waiting period between the date you leave work and the date when you actually receive your benefits. Many policies also require you to use some or all of your sick days before the policy begins to pay. Once the waiting period is over, you will generally receive a set percentage of the wages you received before you were disabled. For example, if you were paid $500 per week, and your policy pays 50% of pre-disability earnings, you’ll get a benefit of $250 per week. Short-term policies generally last between 9 weeks and 52 weeks, after which time your benefit will end. You may then have the option of moving to a Long-Term Disability policy or applying for Social Security Disability Insurance.
Differences Between Policies
While all STD policies share these general features, each has different specifics.
- Definition of Disability: Some STD policies define a disability in terms of an inability to work at your own job. These are known as “own occupation” definitions of disability. Other policies define disability as an inability to work in any job, known as an “any occupation” definition. Generally, policies with the “any occupation” definition are cheaper.
- Service Wait: Some employers will only offer STD policies after you’ve worked for them for a set period of time, for example, one year. Some policies also pay higher benefits for people who have worked for longer periods. Also known as a minimum service requirement.
- Waiting Period: Waiting periods can be up to 180 days. Generally, policies with longer waiting periods are cheaper. Many plans have different waiting periods for different types of disabilities. For example, a plan may have a 7 day waiting period for illnesses and no waiting period for accidents.
- Benefit Rates: Benefit rates vary, but are generally between 40% and 70% of your pre-disability earnings. You will probably pay a higher premium for a higher rate. Some policies also change rates during the benefit period. For example, your policy may pay 80% for the first three weeks of disability and then 50% for the remainder of your benefit period.
- Partial Disability: Some plans allow you to return to work part-time while continuing your benefits. This is usually referred to as a “residual” or “loss of earnings” benefit. For example, if you worked 8 hours per day before your disability, and you are able to return to work 4 hours a day, the STD policy may replace some of your income for the remaining 4 hours.
- Benefit Periods: Policies may allow you to return to work on a trial basis. For example, your policy may give you a two week trial period. If you go back to work for less than two weeks and then find that you can’t do your job because of your disability, the policy would allow you to continue your benefits as if you hadn’t returned to work. If you are able to stay at work for more than those 2 weeks, and then you find that the same disability prevents you from doing your job, you may have to re-apply and go through another waiting period, or, you may no longer be eligible to receive a benefit based on that disability.
- Transition to Long-Term Disability Insurance: Some STD plans automatically transition to an LTD plan if you are still disabled after the benefit period ends.
- Changes to your premium: If you sign up for a “non-cancelable” policy, the insurance company cannot change your premiums or benefits. If you sign up for a “guaranteed renewable” policy, the company is allowed to change your premiums, but only if they are changing it for an entire group of policyholders.
- Exceptions: Many policies will not cover disabilities caused by suicide attempts, drug abuse, war, or attempts to commit a crime. Pre-existing conditions are also frequently excluded (see below). On-the-job injuries, which are covered by workers’ compensation insurance, are also not covered.
Learn more
Long-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. LTD may continue for years.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Short-Term Disability Insurance (STD)
- The Basics
- How Does STD Insurance Work?
- How Do I Get STD Insurance?
- Other Information
- Example
- FAQs
- Pitfalls
- Resources
Try It
How Do I Get STD Insurance?
Disability Coverage through California State Disability Insurance
In California, most employees are covered by the State Disability Insurance program (SDI), which provides partial wage replacement. The SDI program is funded through employee payroll deductions. If your employer participates, they may offer additional coverage if you pay a premium.
Signing up for a Group Plan: Avoiding Medical Underwriting
If your employer does not participate in SDI, it may offer a voluntary plan, which is an STD policy like the ones described above. Your employer will allow you to sign up for the plan during an initial enrollment period. During this period, the insurance company cannot deny you coverage based upon a pre-existing condition, so it’s very important to sign up then. You may be required to work for a certain period of time before a pre-existing condition is covered (an exclusionary period), but you will still be able to sign up for the plan.
If you don’t sign up during initial enrollment, you’ll have to undergo medical underwriting. The insurance company will review your medical records to find out if you have pre-existing condition or are getting treatments for a potentially disabling condition. Treatments can include advice from a doctor or a medication. If the insurance company finds that you do have a health condition or have had treatments, the insurance company can deny you coverage, exclude conditions from being covered, or have an exclusionary period for your conditions.
Signing up for an Individual Policy
If you work for an employer that doesn’t offer any STD plan, you may want to consider buying an individual policy. You will have to undergo medical underwriting (see above) to get individual coverage. When shopping for individual policies, look for reputable companies and be sure to read all of the details of your policy. You can find ratings of insurance providers at the following websites:
When you are Injured
Once you have your policy and are injured, be sure to speak with your HR manager or insurance agent as soon as possible to begin the application process.
Learn more
Long-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. LTD may continue for years.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Short-Term Disability Insurance (STD)
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Other Information
- STD benefits are taxable, but you may be able to avoid paying taxes on benefits by paying taxes on the premiums. Contact your income tax professional for more information.
- STD policies will subtract any assistance you’re getting from other insurance programs. So, for example, if your benefit is $500 a month and you begin to receive an SSDI check for $100 a month, your STD benefit will be reduced to $400 a month.
- Some employers require that you participate in their retirement fund in order to be eligible for STD benefits.
Learn more
Long-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. LTD may continue for years.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Short-Term Disability Insurance (STD)
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Example
Kathy's Story
Kathy had just started a new job. She decided to ask her Human Resources (HR) representative about what benefits she was eligible for and how to sign up for them. Kathy's employer did not participate in the State Disability Insurance, program, but did offer Short-Term Disability group coverage. The HR person Kathy spoke with told her that the initial enrollment period lasted for another month. Kathy had a back injury and realized that she could sign up for disability insurance without medical underwriting if she signed up during this period. She still had to disclose her condition, and she would have a 6 month exclusionary period, but they could not deny her coverage. She signed the papers the next day. Her policy had a one year minimum service requirement, which meant that she would not be eligible for a benefit until she had worked at the company for a full year. For back injuries, she would have to wait an additional 6 months to be covered.
Two years later, Kathy re-injured her back. She went to the doctor, who told her that she would not be able to work for at least 3 months. Kathy immediately notified the HR representative, who gave her the forms that she would need to have her doctor fill out. Kathy faxed the signed forms to her office. There was a seven day waiting period on her policy, which meant that she would receive her benefit a week after she left work.
After the waiting period, Kathy began to receive a weekly disability check. She had earned $400 a week before her injury, and her policy paid 70% of pre-disability earnings. That meant her check would be for $280 a week until she returned to work or her policy ended. Three months later, Kathy and her doctor decided that she was well enough to return to work. She notified her company and went back to work the following week. Her benefit check stopped.
Kathy was able to work for 4 days before she realized that she was in too much pain. She worried that she wouldn't be able to go back on her disability benefits, so she spoke again with her Human Resources department. They told her that as long as she hadn't completed 2 full weeks of work, she could go back on benefits as if she hadn't returned to work at all. Kathy decided to go back on the disability benefit.
Two months later, Kathy felt completely healed, but decided to take it easy. She remembered that her policy allowed her to return to work part-time, and would pay 70% of her income for the hours that she couldn't work. She decided to work for 4 hours a day. Before her injury, she had worked 8 hours a day, 5 days a week, for $10 an hour. That came to $400 a week. By returning to work half the time, she would make $200 in wages, and the insurance would pay $140 (70% of $200) for the hours she was missing. After a month, Kathy and her doctor agreed that she could return to work full time. She again alerted her HR department, stopped receiving her check, and returned to work full time.
Learn more
Long-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. LTD may continue for years.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Short-Term Disability Insurance (STD)
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Frequently Asked Questions
What is Short-Term Disability (STD) coverage?

Short-term disability coverage provides wage replacement to individuals who experience wage loss due to a disability. STD coverage lasts for up to one year.
How do you obtain STD coverage?

Short-term disability coverage can be obtained either through a group or individually. Group coverage can be offered by an employer, professional group or association. Individual coverage can be purchased directly from an insurance broker based upon medical underwriting.
Is Short-Term Disability (STD) Insurance a public benefit?

No. Short-Term Disability (STD) Insurance is not a government benefit and is not connected to any public benefit program. It is private insurance that you get through a private company.
To find out if you have STD coverage through your employer, talk to your Human Resources person. To sign up for an individual policy, contact an insurance company or insurance agent.
If you are looking for information about public cash benefits for people with disabilities, see:
Who is eligible for STD coverage?

If short-term disability coverage is offered from an employer, the individual must work for a specified period of time - known as a service wait - prior to becoming eligible for benefits. For professional or association-affiliated STD coverage, the individual must be a member of the group for a set period of time. Individual policies may be purchased directly from an insurance broker based upon medical underwriting. Individual policies are usually available if you have not had any medical treatment for a potentially disabling medical condition during the past 10 years. Medical treatment includes prescription medications and physician consultations.
How soon will I be eligible to enroll in benefits from STD coverage?

If you have employer-sponsored STD coverage, you must meet the active work requirement in order to be eligible to enroll in benefits. For professional or association-affiliated STD coverage, you must meet their specific requirements to be eligible to enroll in coverage. See the summary plan description for further details.
How much income replacement will I receive from STD coverage?

Short-term disability coverage provides monthly income replacement that is either a percentage of gross pre-disability earnings or a specified dollar amount. Benefit variations do exist, so be sure to check the summary plan description for details.
Why should I enroll in group STD coverage during the initial enrollment period?

The initial enrollment period is the best time to enroll if you have a pre-existing condition. During the initial enrollment period, your medical history is not subject to medical underwriting. However, pre-existing condition exclusions may limit or delay the use of coverage.
What is a pre-existing condition exclusionary period in STD coverage?

A pre-existing condition is any medical condition for which “medical care” was received three to six months prior to the coverage effective date. STD plans may have pre-existing conditions exclusionary periods. During this period of time, an individual's prior medical condition(s) will not be covered by the policy. However, after the pre-existing exclusionary period expires, the condition becomes covered under STD coverage.
How do I meet a pre-existing condition exclusionary period?

To meet the pre-existing conditions exclusionary period for short-term disability coverage:
- Enroll during initial enrollment;
- Continue membership in the group (employer, professional group, association); and
- Remain enrolled in coverage during both the service wait and pre-existing conditions exclusionary period.
Once the exclusionary period has passed, you will then be covered for any pre-existing disability.
How long does a pre-existing condition exclusionary period last in STD coverage?

In short-term disability coverage, a pre-existing condition exclusionary period can last between 6 to 12 months.
Does STD coverage provide health coverage too?

No. STD coverage only provides wage replacement. In employer-sponsored STD coverage, the employer may use your eligibility for STD to determine continued eligibility for other benefits such as health and life coverage.
How much does STD coverage cost and who pays for it?

If you have individual STD coverage, you will be responsible for all costs.
If you have group STD coverage, you may be responsible for no cost, a percentage of the cost, or a set premium. With employer-sponsored STD coverage, you may be responsible for the amount that is above what the employer elects to pay. This is determined by employer agreements with their insurance companies. Your employer, Human Resources Department, or personnel staff can explain these benefit details.
How long does STD coverage last?

STD coverage can last up to 12 months.
How do I stay enrolled/eligible for STD coverage?

Enrollment and eligibility requirements depend on the type of short-term disability coverage you have - group (employer, professional group, association) or individual. For example, if you have employer-sponsored STD coverage, you will need to meet the active work requirements, which entails working a minimum number of hours per week. If you are unable to meet the active work requirements due to a disability, and you have passed the service wait and pre-existing condition exclusionary periods, STD coverage may be used to replace a portion of your wages. If you have STD coverage through a professional group or association, you will need to maintain membership to continue eligibility for benefits.
Does what I have in the bank or what I own affect my eligibility for STD coverage?

No. There are no income or assets restrictions for STD coverage.
What is the difference between STD coverage and state and federal disability programs, such as Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI)?

STD coverage is private insurance offered through individual or group (employer, professional group or association) plans. STD coverage does not have income and assets restrictions. Coverage varies between insurance policies. Some employers may provide this coverage instead of California State Disability (SDI). State and federal wage replacement programs - Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) - are public benefits. To be eligible for public income replacement, an individual does not have to belong to a group but must meet specific requirements.
Are there immigration rules to qualify for STD insurance program?

No. Immigration rules that should be considered relate to your legal residency status and whether you are legally authorized to work in California.
Can I keep my group short-term disability (STD) coverage if I no longer belong to the group that provided the benefit?

Yes. Some group STD plans are portable if you are not disabled when you leave the group. Be sure to check your summary plan description to see if the plan has a portability option. If the STD policy does not allow portability, you must re-enroll during the initial enrollment period and complete both the service wait and pre-existing condition exclusionary period again.
What other benefit programs are available to me and how will they work with STD coverage?

Many additional benefits programs may be available to you depending on your work history and what benefits an employer has provided. They may include California State Disability Insurance (SDI), privately sponsored long-term disability, or Social Security Disability Insurance (SSDI). You may also be eligible to continue private health coverage continuation (COBRA, OBRA, Cal-COBRA, HIPAA). In certain circumstances, you may be eligible for Medi-Cal (Medicaid) or, after waiting periods have been satisfied, for Medicare.
What else should I know about STD coverage?

If you reduce hours or leave work due to a disability, you may be eligible to receive partial benefits if this provision is included in your policy. Check the summary plan description for details. Also, you may want to consider consulting a benefits planner about State Disability Insurance (SDI) or Social Security disability programs such as Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).
Learn more
Long-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. LTD may continue for years.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Short-Term Disability Insurance (STD)
Try It
Common Pitfalls
Confusing Short-Term Disability (LTD) Insurance with public disability benefits
Short-Term Disability (STD) Insurance is not a government benefit and is not connected to any public benefit program. It is private insurance that you get through a private company.
To find out if you have STD coverage through your employer, talk to your Human Resources person. To sign up for an individual policy, contact an insurance company or insurance agent.
If you are looking for information about public cash benefits for people with disabilities, see:
Not keeping good records of your condition
The more records you have of your symptoms and how your disability affects your day-to-day life, the easier it will be to get approved for SDI benefits and, if needed, make a case for continuing your benefit payments past the date your medical provider originally said you should be able to return to work. Keeping a daily journal of even minor symptoms can help quite a bit, and can jog your memory when you are talking with medical providers about your medical condition. If your disability makes you unable to keep a journal yourself, a friend or relative can do it for you.
Denial of Your Disability
It is common for individuals to have periods of time when they deny to themselves, their families, and medical provider(s) that a disabling condition exists. For some, it is an approach to coping with a new condition. During this period of time, the individual’s communication with medical providers may not accurately or fully describe the severity of a condition or how seriously it affects day to day activities.
Basing decisions on misinformation
Most of us usually rely on other people’s experiences to understand how to deal with our own situations. The problem with this is that disability and government benefits are person-centered. Benefits programs fit each person differently, based on a variety of facts and conditions, such as:
- Your work history
- How much you earn
- What you own
- What your disability is and the extent of your impairment
- How clearly you report the details of your condition to your medical provider
- How well your medical provider understands or documents these details
- What benefits an employer provides, and
- What benefits you have purchased individually.
Learn more
Long-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. LTD may continue for years.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.
Short-Term Disability Insurance (STD)
Try It
Resources
Private Insurance Resources
When purchasing an insurance policy, look for reputable companies and be sure to read all of the details of your plan. You can find ratings of insurance providers at the following websites:
America’s Health Insurance Plan, a trade association, offers a helpful Guide to Disability Income Insurance.
Getting Help with Your Benefits
If you get Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), or Childhood Disability Benefits (CDB), and you're looking for a job, a trained Benefits Planner can help you avoid problems with your job plan. If you need help or have questions about your situation, you can call the Ticket to Work Help Line at 1-866-968-7842 or 1-866-833-2967 (TTY), Monday through Friday.
View DB101's full list of experts who can help you understand different benefits.
Community-Based Organizations
Various community-based organizations guide people through state, federal, public, and private health and income programs. Some organizations may work with specific populations while others work with people with any type of disability. Here are a few examples
Goodwill Industries services range from personal evaluation and office skills training to career counseling, childcare, and transportation. Some Goodwill Industries centers also do benefits planning for people who get SSI, SSDI, and Medicare. Find locations at www.Goodwill.org, or by calling (voice) 1-800-466-3945.
The California Foundation for Independent Living Centers lists centers serving people with all disabilities. Many of these centers do benefits planning for people who get SSI, SSDI, and Medicare. If they don't offer benefits planning themselves, Independent Living Centers can refer you to local benefits planners. Find the list of independent living centers at www.CFILC.org, or by calling (voice) 1-916-325-1690 or (TTY) 1-916-325-1695.
The California Department of Public Health's Office of AIDS lists 1,300 organizations offering HIV/AIDS services throughout California. Some of these organizations provide case management, benefits planning, and benefits counseling services that can include help with public and private benefits programs. You can search the list online, or call (voice) 1-800-367-AIDS (2437) or (TTY) 1-888-225-AIDS (2437).
Disability Rights California provides representation for consumers of public programs who are disabled. Website publications include topics on health care, benefit programs, and In-Home Supportive Services.
Learn more
Long-Term Disability Insurance
Private insurance for people who paid premiums or whose employers did. LTD may continue for years.
California State Disability Insurance (SDI)
SDI helps Californians who worked, paid SDI taxes, and now can't work because of a non-job-related disability.
Social Security Disability Insurance (SSDI)
SSDI helps people with disabilities who worked and paid Social Security taxes.