How Short-Term Disability Benefits Work

Short-Term Disability

The Balance / Melissa Ling

Whether an incident takes place on the job or after hours, everyone bears some risk of becoming incapacitated, unable to work, and in need of assistance from short-term disability insurance coverage. This coverage provides financial support to replace lost income while you take time off to recuperate at home.

Key Takeaways

  • Short-term disability benefits provide financial support, if you're temporarily unable to work due to certain eligible conditions
  • Short-term disability insurance, typically, covers up to 60% of your gross weekly earnings for a period of nine to 52 weeks
  • Coverage can kick-in after an employer specified period, usually 14 days. Till then employees may have to use sick days or paid-time off
  • Short-term disability insurance can be employer-sponsored or something that employees can purchase themselves, though the latter is expensive

Why Are Short-Term Disability Benefits Important?

While becoming injured or ill does happen at home and other places, a surprising number of disabling incidents happen in the workplace in any given year, creating a substantial need for disability insurance coverage.

A 2018 report released by the union organization AFL-CIO found that each day approximately 150 American workers die on the job, and some 7.4 million to 11.1 million worker injuries take place each year, often going unreported.

According to the Council for Disability Awareness, around one-quarter of today's 20-year olds have a chance of becoming disabled at some point in their career before retirement. Some people's disabilities will require more support than the amount provided by short-term disability insurance. On average, long-term disability incidents last about 34.6 months, meaning almost three years of lost work and foregone income.

Short-Term Disability Benefits

Employer-provided short-term disability (STD) insurance pays a percentage of an employee’s salary for a specified amount of time, if they fall ill or get injured, and cannot perform the duties of their job. Generally, the benefit can pay up to 60 percent of the employee's weekly gross income.

Independently-purchased short-term liability insurance works relatively the same, offering a range of partial to full income coverage, depending on the policy level and premium you choose to pay.


Disability income may or may not be subject to income tax, depending on whether the policy was funded with pre-tax or after-tax dollars, among other considerations.

When Coverage Begins

While most employers can decide when the benefits would kick in, coverage usually starts anywhere from one to 14 days after an employee suffers a condition that leaves them unable to work.The time of coverage may vary from nine to 52 weeks from eligibility. Many times, employees are required to use sick days before short-term disability kicks in if it’s an illness that keeps them out of work for an extended period of time.

Employers often have other types of insurance that cover workplace injuries, such as workers compensation, with different rules and requirements, versus disability insurance for those injuries that occur off the job. If an employee must be out of work for longer than the short-term disability benefits coverage period, then either a long-term disability plan or permanent disability kicks in. This may happen at 10 to 53 weeks from the date of eligibility.


Determination for long-term disability is provided by the insurance company's team of doctors and insurance analysts who carefully monitor each case.

Who Pays for Short-Term Disability Coverage?

A short-term disability policy can be an employer- or employee-paid benefit. Generally, though, employers offer short-term disability coverage as a benefit.

Companies do have a choice of having employees pay for coverage, with certain tax implications. Each state sets its own requirements as to whether employers must carry short-term disability insurance and the mandated limits of basic coverage amounts. States can also dictate the amount of the weekly cash benefit limits. Group coverage for short-term disability can be attained in the following ways:

  • Contract agreement through an insurer that covers disability.
  • Through a self-funded plan agreed upon by the employer directly. (Two popular providers include Aflac and MetLife.)

Policy Terms and Responsibilities

As an employer, you can create a policy dictating that employees use sick days before going on short-term disability for an extended illness. You can also require documentation from a doctor to prove an illness or injury.

During the time that an employee misses work, the employer may also request that the employee visit an approved medical provider or an occupational medicine center for regular updates on the progress of the employee's health.

A third-party claims administrator will be in charge of managing these aspects while the employee takes time out of work. Employees must report any changes in their status immediately. These rules are in place to help prevent insurance fraud, a problem that costs employers billions of dollars annually.

Various short-term disability plans dictate different terms for qualifications. The main terms typically include:

  • Employees need to work for the employer for a certain amount of time before coverage kicks in.
  • Employees need to work full-time, usually 30 hours or more a week.

The following components may be included in a short-term disability plan benefits package:

  • Percentage of weekly salary paid out (typically up to 60 percent of weekly salary).
  • Duration of short-term disability benefits (typically between nine to 52 weeks).
  • The maximum amount of time covered under the disability program (up to 52 weeks)

It’s also important to know the rules of the states in which employees reside.


While most states do not have a mandated short-term disability requirement, The Society for Human Resource Management advises that five states including California, Hawaii, New Jersey, New York, Rhode Island, and the US territory of Puerto Rico do have mandatory coverage guidelines.

Employers may want to also consider offering a voluntary benefit option for a long-term disability program that takes over once an employee’s short-term disability ends.

Frequently Asked Questions (FAQs)

What qualifies for short-term disability?

If you are temporarily unable to work due to an accident, illness or even pregnancy, you may be eligible to receive short-term disability benefits.However, your policy will specific which conditions do not qualify you to receive short-term disability. Some exclusions to short-term disability benefits are self-inflicted injury, loss of work due to war, injuries due to a riot or protest participation, loss of license or loss of work due to jail time.

How do you apply for short-term disability?

If you're unable to work temporarily due to a condition that qualifies for short-term disability, notify your employer. For an employer-sponsored short-term disability plan, typically, you would go through the process with your HR and the group insurance company. You would be required to fill in an application form for short-term disability insurance and send that across to the insurance provider along with a doctor's certificate, medical records and any other documents that your policy requires.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. AFL-CIO. "Death on the Job: The Toll of Neglect, 2018."

  2. Council for Disability Awareness. "Chances of Disability, Me Disabled?"

  3. Aflac. "Is Short-Term Disability Taxable?"

  4. MetLife. "Short Term Disability Insurance."

  5. The Hartford. "Short-Term versus Long-Term Disability Insurance Coverage."

  6. "Temporary Disability Insurance."

  7. University of Pennsylvania Human Resources. "Short-Term Disability (STD)."

  8. Cigna. "Short-Term Disability Insurance Summary of Benefits."

  9. Society for Human Resource Management. "Which states require employers to have a short-term disability plan?"

  10. Aflac. "How Does Short-Term Disability Work?"

  11. Princeton University. "Instructions for Short-Term Temporary Disability."

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