What Qualifies for Short-Term Disability?
It's important to know what qualifies for short-term disability coverage in order to get the most out of your income, meet the needs of your family, and get the benefits you pay for.
Short-term disability coverage is meant to provide a percentage of your income between the time you experience an illness or injury, and the time your long-term benefits take effect. You should be aware of the following three components of short-term disability:
- Qualifying medical conditions
- Policy change eligibility periods
- Carrier coverage periods
Qualifying Medical Conditions
First, you must be unable to fulfill the basic demands of your full-time job. Next, you must have your physician provide documentation about the medical condition which prevents you from working. Lastly, you need to check your policy's coverage related to accidents, physical illness, or mental illness.
Check your policy carefully for short-term qualifying conditions due to accidents. Policies will exclude several types of accidents depending on where, when, and how they occur. Here are several categories of injuries which may not be eligible for short-term disability coverage.
- Illness or injury which occurs in the commission of an illegal act
- High-risk activities such as a car, motorcycle or other racing or taking part in professional sports
- Attempts at suicide or any other attempt to intentionally harm yourself
- Injuries due to military service or which occur during an act of war
Diseases, infections, and a variety of abnormal medical conditions qualify for short-term disability coverage:
- if they occur after your policy's effective date,
- if you experience a loss of income during your coverage period, or
- provided that your short-term disability policy does not exclude the illness.
Policies purchased through your employer consider normal labor and delivery as a qualifying illness. An individual short-term disability policy covers only pregnancy complications.
An illness resulting from an addiction to a drug prescribed by a doctor may qualify for coverage. However, you must prove that you took the prescription according to the doctor's instructions. Some side effects from prescription drugs may not be eligible for coverage.
Chronic mental illness, or episodes of severe mental illness, are not covered by short-term disability policies. You should check for individual disability policies, or look into government programs which may be other sources of coverage for mental illness.
Similar to most types of insurance coverage, there are specific enrollment periods and life events that qualify you to make changes to your policy's coverage.
You usually have the opportunity to enroll in short-term disability coverage during an annual Open Enrollment period determined by your insurance provider, and if you are using pre-tax dollars, by the IRS. Unless you experience a qualifying event, this may be the only time you can enroll.
The amount of your benefit is typically two-thirds (or 66%) of your annual income. If your income increases, you may need to increase the amount of your short-term disability coverage. Similarly, if your income decreases, you may want to decrease the amount of your coverage.
If the number of hours you work changes significantly, such as a change from full to part-time hours, you may no longer qualify for short-term disability coverage. Most insurers only offer coverage to full-time employees.
Short-Term Disability Coverage Periods
Another way to take full advantage your short-term disability coverage is to understand:
- when your policy takes effect,
- how long you will receive disability benefits, and
- what disabilities are excluded from coverage.
Waiting (or Elimination) Period
There is a waiting (or elimination) period between the occurrence of your illness or injury and when your short-term disability benefit begins. You may be able to select the waiting period when you enroll in your policy. Waiting periods may be a matter of days or weeks, or there may be no waiting period at all.
The benefit period is the amount of time you're eligible to receive benefits. You may choose the benefit period when you enroll for disability coverage. The period can be a few months or up to two years.
A pre-existing condition is considered any medical condition or treatment which occurred during the twelve months (sometimes six months) before your short-term disability coverage began. The length of time that your pre-existing condition is not covered by your disability policy depends on your insurance carrier.