Short term disability: Overview, definition, and example
What is short term disability?
Short term disability refers to a type of insurance or benefit that provides income replacement for employees who are temporarily unable to work due to illness, injury, or medical conditions. The coverage typically lasts for a few weeks to a few months, depending on the policy or company plan. It’s designed to help employees maintain some income during the period they are unable to perform their regular work duties. Short term disability benefits can cover a portion of the employee's salary, allowing them to focus on recovery without the financial strain of lost wages.
For example, if an employee has a surgery and needs to take a few weeks off to recover, short term disability benefits can provide them with a portion of their income during that recovery period.
Why is short term disability important?
Short term disability is important because it helps ensure that employees can take the time they need to recover from temporary illnesses or injuries without facing financial hardship. For businesses, offering short term disability benefits can improve employee satisfaction, reduce absenteeism, and support a healthy work-life balance. It also shows that the company cares about the well-being of its employees, which can improve retention and attract new talent.
For SMBs, offering short term disability can help manage workforce continuity by ensuring that employees who need medical leave can still receive support during their recovery, while also keeping the business operations running smoothly.
Understanding short term disability through an example
Imagine an employee at your business has an accident and breaks a leg. The employee is unable to work for several weeks due to the injury. If your business provides short term disability benefits, the employee can file a claim to receive income replacement during this time, helping them manage their expenses while they recover. The employee may receive a percentage of their regular salary during the time they are off work, as specified in your company’s disability policy.
In another example, an employee is diagnosed with a medical condition that requires a few weeks of treatment. During this time, short term disability can provide a portion of their salary, allowing them to focus on their health without worrying about income loss.
An example of short term disability in action
Here’s how short term disability might be referenced in a company policy:
“Employees who are temporarily unable to work due to illness, injury, or medical conditions may be eligible for short term disability benefits, which will provide up to 60% of their regular salary for a period of up to 12 weeks, depending on the nature of the disability.”
Conclusion
Short term disability is a benefit that provides income replacement for employees who are temporarily unable to work due to illness, injury, or medical conditions. For SMBs, offering short term disability benefits can improve employee retention, support employees during challenging times, and ensure business operations continue without significant disruption. It helps balance employee well-being with the business’s need to maintain productivity.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.