Group short-term disability insurance policies are taken out by an employer and offered to employees. Short-term disability insurance provides covered employees with income in the event of a non-work related disability (work-related injuries are covered under legally required Worker's Compensation insurance.) Maternity is covered under most plans as a short-term disability. In a typical plan, benefits are paid at 60% of the employee's gross income. Payments begin on day one for an injury and day 8 for an illness. Payments are made typically for 13 weeks.

Cost

Monthly premium rates for short-term disability are quoted per $10 of weekly benefit. For example, ten (10) covered employees each making $1,000 per week would result in a potential weekly benefit of $6,000 (assuming a 60% benefit level). A rate of $0.15 per $10 of weekly benefit would yield a monthly premium of $90.00 ($6,000 divided by 10 times $0.15).

Employer Premium Contribution

Most employers pay 100% of the premiums for group short-term disability plans. Voluntary (Employee-Paid) Disability insurance is available for groups with five (5) or more employees.

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