If you’re an employer with a small business, you might be in need of small business health insurance for your employees. (There are many reasons to consider offering group health insurance, after all.) One benefit you can consider offering to your employees will help them if they ever need to take time off work due to illness or injury. As an employer, you can offer short-term and long-term disability insurance. What are those? We’ll explain how both of these coverages work and why you might want to consider offering them.
What is short-term disability insurance?
Short-term disability insurance will provide benefits to employees who are either ill or injured and need to take an extended leave from work. These benefits are a portion of the employee’s wages and are given so that the employee can cover their living expenses while they’re unable to work. Typically, short-term disability will pay benefits for anywhere from three months to a year after the employee has to take time off. (It all depends on the policy.)
Short-term disability insurance comes with a waiting period (also known as an elimination period.) That means that the employee has to have taken a certain amount of time off for their injury, illness, or disability before the benefits kick in. This waiting period can be a day, a week, or a different amount of time – again, it all depends on the policy. Many employers also require that employees exhaust their available sick leave before beginning to receive short-term disability benefits.
And if an employee’s injury or illness extends beyond the amount of time specified by the short-term disability insurance policy, they may be eligible to receive long-term disability insurance. (We’ll explain more about that later.)
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When can an employee become eligible for short-term disability insurance?
Typically, an employee needs to have worked for your business for a certain amount of time before they’re eligible for short-term disability insurance. They also may need to be a full-time employee or work a certain number of hours per week to be eligible for short-term disability.
How is short-term disability different than workers’ comp?
Short-term disability is different than workers’ comp insurance because workers’ comp covers on-the-job injuries or work-related illnesses that are a direct result of an employee’s job. Short-term disability insurance is for non-work-related injuries, illnesses, or disabilities that prevent employees from working. (For example, pregnancy can be covered by short-term disability insurance so that new mothers can take time off.)
What is long-term disability insurance?
Long-term disability insurance will help employees if they have an injury, illness, or disability that extends past what short-term disability will cover. It typically has a much longer elimination period – it can be three months or six months or more, depending on the policy. So – if an employee runs out of short-term disability and they still need time off to recover from their injury or illness, they can use long-term disability insurance.
Like short-term disability insurance, the benefits will be a portion of the employee’s wages. However, the long-term disability benefits will be paid out for far longer than those offered by short-term disability. Long-term disability benefits can be paid for two years, five years, ten years, or until the employee reaches age 65, depending on the policy.
The benefits of offering short-term disability and long-term disability insurance.
If you’re trying to attract and retain top-notch talent, offering group health benefits – including short-term and long-term disability insurance – can help. Offering a benefits package can really make a difference when it comes to finding the employees you need. It also shows your employees that you genuinely care about them and want them to be able to take care of their health without worrying about income.
If you’re not sure where to start with getting group health insurance for your small business, we can help. Our team of insurance professionals can help you find the benefits that are right for your business and your employees. All you have to do to get in touch is fill out our online quote form or give us a call today. We’re here to help.