Short-Term Disability Insurance: Protecting Your Employees

When your star employee breaks their leg skiing or needs surgery, they face a double worry: recovering from their condition and paying their bills without a paycheck. Short-term disability insurance solves this problem by replacing a portion of their income while they heal. For Long Island business owners, this benefit has become a powerful tool for attracting talent and protecting your team.

What Short-Term Disability Insurance Actually Is

Think of short-term disability insurance as a financial bridge. When an employee can't work due to illness or injury, this insurance replaces part of their salary for a limited time period. Unlike workers' compensation, which only covers job-related injuries, short-term disability covers any medical condition that prevents someone from doing their job—whether it's pneumonia, a broken bone, or recovery from childbirth.

The insurance typically covers non-work-related illnesses, injuries, and medical procedures. It also covers pregnancy and childbirth, making it especially valuable for younger employees planning families.

How Short-Term Disability Works Step by Step

Here's what happens when an employee needs to use this benefit:

• Employee gets sick or injured: They visit their doctor and receive medical documentation stating they cannot work
• Waiting period: Most plans have a waiting period (typically 7-14 days) before benefits begin—think of this as a deductible, but measured in time instead of dollars
• Claim filing: The employee submits their claim with medical documentation
• Benefit payments begin: Once approved, they receive weekly payments, typically 60-70% of their regular salary
• Duration: Benefits continue for a set period, usually 3-6 months, or until they can return to work

For example, if your office manager earning $800 per week breaks their wrist and can't work, they might receive $500 per week (about 60% replacement) starting after the waiting period and continuing until they can return to work.

Why Smart Employers Offer Short-Term Disability

This benefit delivers multiple advantages for your business. First, it dramatically improves your ability to recruit quality employees. When candidates compare job offers, comprehensive benefits often tip the scales—especially for professionals with families or those approaching their peak earning years.

The benefit also reduces financial stress for recovering employees, which means they can focus on getting better instead of worrying about money. This typically leads to faster, more complete recoveries and better employee loyalty when they return.

Perhaps most importantly, it gives you a structured way to handle employee absences. Without this benefit, you might feel pressured to continue paying full salaries during extended absences, or risk losing good employees who can't afford unpaid leave.

What Your Employees Actually Receive

From your employees' perspective, short-term disability insurance provides crucial income security during vulnerable times. The benefit typically replaces most of their essential living expenses—mortgage payments, car payments, groceries—even when they can't work.

For working parents, this coverage is especially valuable during childbirth and recovery. While some states offer disability benefits, employer-provided coverage usually offers higher benefit amounts and more flexibility.

Employees also appreciate that the benefit covers common scenarios they worry about: the flu that turns into pneumonia, the minor surgery that requires weeks of recovery, or the injury that happens during weekend activities.

Key Decisions When Setting Up Coverage

You'll need to make several important choices when implementing this benefit. The waiting period affects both cost and employee experience—shorter waiting periods cost more but provide faster relief. Most employers find 7-14 day waiting periods strike the right balance.

Benefit amounts typically range from 60-70% of salary. Higher percentages cost more but provide better income replacement. Many employers also set maximum weekly benefit amounts to control costs.

You can choose between employer-paid coverage (you pay the premiums) or voluntary coverage (employees pay). Employer-paid coverage is more attractive to employees but obviously costs more. Some employers split the difference, paying for basic coverage and letting employees buy additional protection.

How Benton Oakfield Simplifies This Process

At Benton Oakfield, we handle the complexity of setting up short-term disability insurance so you don't have to become an expert in claim procedures and benefit calculations. We work with Long Island businesses every day to design coverage that fits your budget while providing meaningful protection for your employees.

More importantly, we help your employees understand exactly what coverage they have and how to use it. Many employees never fully appreciate their benefits because no one explains them clearly. Our team ensures your people know what protection they have, which increases both benefit utilization and employee satisfaction.

We also provide ongoing support when claims arise, helping both you and your employees navigate the process smoothly. Learn more about how we help Long Island businesses design comprehensive benefit packages that attract and retain great employees.

Ready to explore short-term disability options for your team? Contact our team to discuss how this benefit fits into your overall employee benefits strategy.

Compliance Note: Benefit plan rules and tax implications vary based on company size and location. This guide is for educational purposes only. Please contact your Benton Oakfield representative to discuss how this applies to your specific situation.

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