An Overview of Short-Term Disability Insurance

Learn when you should be approved for short-term disability insurance benefits and how to appeal if you're denied.

Short-term disability insurance provides cash benefits for workers who are temporarily unable to work due to illness, injury, or pregnancy. Short-term disability (STD, or sometimes SDI) insurance typically pays about 60% of an employee's regular wages for a period ranging from three to six months. There is generally a waiting period (known as an "elimination period") of a week or so between the occurrence of disability and the beginning of benefits. For employees with both short-term and long-term disability coverage, short-term benefits usually last for until the waiting period of the long-term disability policy is over.

In a few states—California, New York, New Jersey, Rhode Island, and Hawaii—employers are required by law to provide to short-term disability (SDI) or temporary disability (TDI) benefits, or the states administer the programs themselves. In states where SDI/TDI is not mandatory, many employers choose to provide private disability insurance coverage as a benefit of employment, either paying the premiums entirely themselves or with the help of employee contributions. Individuals who don't have short-term insurance provided by their employer or their state sometimes choose to purchase coverage from insurance companies in the open market.

Filing a Short-Term Disability Claim

The first step is to getting short-term disability benefits is to obtain a copy of the claim form from your employer's human resources department or your own insurance carrier (if you purchased coverage for yourself). This form will ask for your date last worked, a description of your medical condition, some personal information, and your contact details.

Next, you'll have to request that your employer and physician complete their portions of the claim form. Your employer will provide information about your job description, salary, and history with the company, while your doctor will generally be required to certify that your medical condition prevents you from working. After you submit the claim form, the insurance company's claims administrator will request your medical records and review them to make sure they are consistent with your allegations of disability.

Is My Condition Covered by Short-Term Disability Insurance?

If you've just started your job and need to file a short-term disability insurance claim, check the terms of your policy to see whether your overage has started yet. Many plans require that you've worked a certain amount of time (six months is common) before coverage begins. Moreover, most employers require that you exhaust your paid sick leave before you are eligible for STD benefits.

If your illness or injury happened at work or was related to your job, you should file for workers' compensation benefits, not short-term disability benefits. But if your condition is non-work-related and prevents you from performing the material duties of your job, you'll likely by eligible for STD benefits.

Most surgeries, other than those for purely cosmetic reasons, are covered by short-term disability insurance as long as your doctor certifies they are "medically necessary." (Organ donation is the lone exception to the "medically necessary" provision.) Bariatric (weight-loss) surgery is often covered by STD insurance, but not always, so check the terms of your plan.

Many prescription medications can cause side effects that also give rise to a successful STD claim.

Pregnant women are generally eligible for a few weeks to several months of short-term disability benefits, covering the end stages of pregnancy and a period of recovery after delivery. However, because pregnancy is considered a pre-existing condition, coverage typically doesn't begin until nine months after your policy goes into effect (disability insurance policies, unlike health insurance policies, are allowed to impose waiting periods on pre-existing conditions).

Filing an Appeal

If your initial claim for short-term disability benefits is denied, you should seriously consider filing an appeal, either on your own or preferably with the help of a long-term disability attorney. The instructions and deadlines for appealing your denial are usually contained in your denial letter, along with an explanation of why your claim was denied. In general, short-term claims are less likely to be denied than those for long-term disability insurance or Social Security disability; nonetheless short-term disability denials are not uncommon.

When filing your appeal, it's important to collect as much medical evidence as possible to strengthen your case. Supplementing your claim file with additional doctors' opinions and medical records can greatly increase your chances of winning your appeal. Even written statements from friends, family members, and (perhaps most importantly) co-workers who have observed your struggles can be beneficial. An experienced disability attorney will not only handle the paperwork and deadlines associated with your appeal, but he or she will also understand what sorts of evidence will persuade the insurance company that you're unable to work.

Getting Longer-Term Benefits

If your short-term disability payments expire (because you've received them for the maximum period of time), and you're still unable to work, your attorney can assist you in filing an application for long-term disability benefits, Social Security disability, or other benefits to which you may be entitled.

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