Short-Term Disability Insurance (STD)


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.

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