Supplemental short term disability insurance is an important benefit for growing families. At the same time it may be the most difficult to understand, and purchase.
It is difficult to understand because there are many flavors of disability insurance. Each flavor has exceptions and limitations. The biggest limiting factor is finding and purchasing policies that work for maternity leave – those covering normal childbirth. Understand how supplemental short term disability works to fill these holes, and discover the simple solution to a big problem many overlook.
- Maternity leave income
- Covering pregnancy complications
- Accidents and illnesses
- State mandated programs
Supplemental Disability Fills Maternity Holes
Supplemental short term disability benefits are designed to fill holes. The policies make up one very important component of supplemental health insurance for growing families – replacing mom’s income during her maternity leave, and in case of pregnancy complications, or postpartum disorders.
This is an important but often misunderstood income security program. Understand precisely how the policies work based upon the objective of the coverage. There are many income security programs, and they all have holes that supplemental short term disability insurance helps to fill.
Supplemental short term disability for maternity leave covers mom’s recovery from normal childbirth. Normal childbirth is often a planned medical event. The benefits paid to the policyholder for this planned medical event can be several multiples of the premiums paid by the policyholder.
As a result these policies are sold through only one channel –at the work site. If you want a policy covering recovery from normal childbirth it must be offered by an employer. There are two basic types of options for employees: group employee plans, and individual employee programs.
Group Employee Plans
Group short term disability is great to have as an employee benefit, but is scarce. The employer owns the policy, and often pays the premium on behalf of employees. The option is scarce because there is a direct cost to employers. There are group plans that are 100% employee paid, but frequently have significant participation requirements.
Individual Employee Plans
Supplemental short term disability employee benefits programs can be 100% employee paid. There is no direct cost to employers to allow employees to enjoy maternity leave income. The policies are employee-owned so they can keep the coverage wherever they work. Participation requirements are much lower (only three participating employees), so the option is widely accessible.
That is why we state that paid maternity leave exists in the U.S.A. Many women enjoy maternity leave income while recovering from normal childbirth. They bought a policy at work and paid for it themselves. More employers should be making this coverage available, and more employees should be asking for the option.
You can get a short term disability quote to estimate premium costs and compare them with projected benefits for maternity leave. Determine whether asking your employer to make an option available is worth the security of maternity leave income.
Complications of pregnancy are very common. Mom may need to leave work prior to delivery when her doctor orders bed rest. Postpartum disorders may delay her recovery from childbirth.
Supplemental short term disability can be purchased as individual policies. Individual short term disability policies can be purchased through employers or directly. Policies purchased directly will not cover recovery from normal childbirth, but may cover complications of pregnancy and other medical conditions.
Applying for benefits after delivery is straightforward. There is often an express pregnancy claim form for normal childbirth. Women experiencing complications during pregnancy may need to provide additional medical details.
Supplemental Disability Fills Other Holes
Supplemental short term disability insurance also fills two very large holes in other income security programs: long elimination periods, and strict eligibility criteria. Temporary disabilities are far more common than permanent disabilities, yet many people find it far easier to find coverage for permanent conditions. Common accidents and illnesses trigger the need for this type of coverage.
Long Elimination Periods
Long term disability insurance makes benefit payments for disabling conditions – often up to age 65. But many of these policies come with very long elimination periods. The elimination period is the length of time you are disabled before payments begin.
The longer elimination periods are needed to keep the premium costs affordable. But if a family is living check to check they may lose everything before payments begin.
Strict Eligibility Criteria
Social Security Disability is available across the U.S. The program is designed to provide income security for permanent disabilities; those expected to last one year or more, or to result in death. There is an “any occupation” disability definition that is very strict, making it difficult to qualify.
Many disability attorneys make a comfortable living helping people dispute denied Social Security Disability claims. Supplemental short term disability insurance uses an “own occupation” disability definition that makes it far easier to qualify.
Off the Job Accidents
Workers compensation is geared to provide income security for workers who get injured at the worksite. This program is mandatory in all fifty states. But off the job accidents are more frequent, and leave families exposed. Supplemental short term disability insurance helps close this gap.
State Mandated Disability Programs
Supplemental short term disability insurance plugs the holes in state mandated temporary disability programs. There are two holes to fill: availability, benefit amounts and duration.
State disability programs have very limited availability. Only five states require employers and employees to participate. That means forty five states have nothing.
The states that do require a program have limited benefits. Some limit the monthly replacement amount to only 55%, while one limits the weekly benefit amount to a paltry $170 per week. Four states limit the length of time payments are made to only six months. Benefit amounts are sometimes taxable.
Supplemental short term disability insurance helps fill all these holes.