Does short-term disability insurance cover mental health issues?

There is no single correct answer. First, the coverage varies by policy type (individual, group, or state-based). Second, the coverage can also vary by reason (depression and anxiety, stress, addiction, and drug or alcohol rehab).

In general, individual policies have the most restrictive benefits, while group plans are more lenient, and state programs fall somewhere in the middle.

The bottom line is this – you must read the legal language in your short-term disability policy carefully to find a preliminary answer. Then file a mental health claim for the final ruling.

Short-Term Disability Anxiety and Depression

Most private short-term disability insurance policies do not cover any behavioral health issue. Read your policy carefully – exceptions abound. This includes anxiety, depression, bipolar disorder, eating disorders, nervous breakdowns, schizophrenia, and many other mental illnesses.

However, finding a related biological condition or working in one of two states can mean the difference between an approval or denial of your claim. The odds are low. Perhaps getting out of debt is a better alternative to lift your mood and improve your finances if you do not fall into either category.

Denials

Getting a short-term disability claim denial for anxiety and depression is the most common outcome for people with private coverage. Most private policies will contain legal language excluding benefits for any mental health issue. Your plan may contain wording similar to this.

“We will not pay benefits for losses that are caused by or are the result of your having a mental or emotional disease or disorder of any kind including psychosis and mood disorders.”

Anxiety and depression fit squarely into the mood disorder category. Therefore, expect a denial based on this reason alone.

Approvals

Getting your short-term disability claim approved for anxiety and depression is possible under two unique scenarios – despite the legal language noted above. People with private coverage must have a related biological disorder, while those with a group or state plans may have more leeway.

Private Policies

Individuals with private short-term disability can get a claim approved by showing a related physical condition. Many people with covered medical conditions suffer from depression or anxiety because of their illness and its treatment.

For example, many private plans could approve these claims.

Group Plans

People enrolled in group short-term disability plans sometimes have better approval chances for mental health issues. Insurance companies cover more lives with group coverage. Therefore, they can be more lenient. For example, we found this language from a group policy.1

“If you are Disabled due to mental illness, regardless of the cause, Disability Payments will be provided for up to two years, not to exceed the Maximum Disability Period.”

State Disability

People with state-based temporary disability plans may be able to get a claim approved for depression and anxiety without connecting to a physical disorder. However, only five states have such a program. In addition, it appears that only two of these states explicitly permit benefits for mental health issues.

  1. California SDI defines disability as “An illness or injury, either physical or mental, which prevents you from performing your regular and customary work2
  2. Hawaii SDI defines disability as “Your injury or illness is not work-related; not caused by your job and prevents you from performing your regular duty”3
  3. New Jersey DTI addresses information about claims for when you are sick, injured, or post-surgery only4
  4. New York State disability provides weekly cash benefits to replace, in part, wages lost due to injuries or illnesses that do not arise out of or in the course of employment5
  5. Rhode Island TDI encourages consultation by a qualified mental health specialist for certifications beyond 6 weeks related to behavioral health disorders (stress, anxiety/depression etc.)6
  6. Washington State TDI does not become effective until January of 2020 and does not publish information on the topic at this time

Unemployment

People in certain states may be able to collect unemployment compensation after leaving work due to a mental health issue such as depression or anxiety. However, you first must meet three universal criteria aside from losing your job.

  1. Able to work
  2. Available for duty
  3. Actively seeking new employment

At least six states permit unemployment benefits to people who voluntarily terminate their job because they are unable to work for specific reasons.

  1. Arkansas
  2. Illinois7
  3. Maine
  4. Minnesota
  5. Texas
  6. Washington

A sample of the written legal language in one state reads as follows.

“Is a person with a mental or physical disability and the employer is unable to accommodate the individual’s need to provide such assistance”

Short-Term Disability Stress Leave From Work

Short-term disability insurance may cover stress leave from work in the very limited situations noted above – either your state plan pays benefits or you can connect the emotional pressures to a physical medical condition.

Caretakers and other family members will have a more difficult time. They are not the person affected by the work-related pressures.

Stress Symptoms

Most common work-related stress symptoms do not qualify as a covered condition under short-term disability. However, when you break the signs into three categories, the possibility emerges to connect with a qualifying medical condition. The physical symptoms must prevent you from working by themselves.

  • Emotional Symptoms8
    • Easily agitated or frustrated
    • Feeling overwhelmed
    • Difficulty relaxing
    • Avoiding others
  • Physical Symptoms
    • Low energy
    • Headaches
    • Upset stomach
    • Frequent colds or infections
    • Chest pain and rapid heartbeat
  • Cognitive Symptoms
    • Racing thoughts
    • Forgetfulness and disorganization
    • Inability to focus

Unpaid Time Off

The Family Medical Leave Act (FMLA) can possibly offer unpaid time off from work for stress leave. The qualification rules are much different when compared to short-term disability. You must have a serious medical condition, work for a covered employer, and be an eligible employee.

  • Serious medical condition means “conditions or illnesses that affect an employee’s health to the extent that he or she must be absent from work on a recurring basis or for more than a few days for treatment or recovery”8
  • Covered employer includes workplaces with 50 or more employees working in a 75-mile radius
  • Eligible employees logged at least 1,250 hours during the previous 12 months and worked for the same employer for 12 consecutive months.

In other words, you must under the care of a physician or psychiatrist to help you deal with the stress and meet the employer and employee criteria – at a minimum.

Short-Term Disability for Addiction Rehabilitation

Short-term disability insurance may cover alcohol and drug rehabilitation for people addicted to either of these two substances.  If you are struggling with a substance addiction problem, getting help to kick the habit can turn your life around.

Most health insurance plans will cover the direct costs of drug and alcohol addiction. But what about the lost income while living in a treatment facility 24 hours a day, 7 days a week?

Drug Rehab

The three different short-term disability policy types show an interesting wrinkle in coverage for drug rehab. As we saw before, individual plans use the most restrictive language because they cannot pool risks the way group plans can. This pattern continues based on the origin of your drug addiction.

Individual

“We will not pay benefits for losses that are caused by or are the result of your addiction to alcohol or drugs; except for drugs taken as prescribed by your doctor”

As you can see, the individual plan has a very restrictive exclusion clause. Addictions caused by recreational substance abuse are not included.

Group

“If you are disabled due to alcoholism or drug addiction, a limited benefit of up to two years for each disability will be paid.

If drug addiction is sustained at the hands of, or while under the regular and appropriate care of a physician in the course of treatment for an injury or sickness, it will be covered the same as any other sickness.”

As you can see, the group plan also has language that is more restrictive relating to recreational substance abuse. However, it does at least provide a limited benefit.

State

We could find only two references out of five for state temporary disability programs paying for drug rehabilitation. If you work in either of these two states, you may enjoy income benefits while in the treatment facility.10,11

California

“You may qualify for up to 45 days of DI benefits if you are a resident of an approved drug-free residential rehabilitation facility. An additional 45 days may be paid if you remain a resident of the facility and your physician/practitioner continues to certify to your need for continuing resident services.”

New Jersey

“Individuals whose disabilities are caused by illegal substance abuse may be eligible for temporary disability benefits if they are no longer using illegal drugs, and if they are being treated for their disability.”

Alcohol Rehab

In general, the short-term disability coverage for alcohol rehabilitation and addiction will be more limited. As we saw from the legal language quoted above, both individual and group plans have stricter parameters for recreational use. A doctor would never prescribe alcohol to treat an illness or injury.

However, the two state programs widely opposing ways of speaking to alcohol-related disabilities.

California

“You may qualify for up to 30 days of DI benefits if you are a resident of an approved alcoholic residential rehabilitation facility. An additional 60 days may be paid if you remain a resident of the facility and your physician/practitioner continues to certify to your need for continuing resident services.”

New Jersey

“Alcoholism is a compensable disability provided the individual is under medical care since it is a disease. It is not considered to be a willfully and intentionally self-inflicted injury.”

Apparently, New Jersey is bucking the trend by placing no special restrictions on alcohol addiction recovery. They treat it the same as any other illness or injury.

Sources:

  1. NEA Member Benefits
  2. California SDI
  3. Hawaii SDI
  4. New Jersey TDI
  5. New York State Disability
  6. Rhode Island TDI
  7. Illinois Unemployment
  8. Stress Symptoms
  9. FMLA rules
  10. California SDI
  11. New Jersey TDI
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