A Deeper Dive into Short-Term Disability & How it Works – Part 2

Most people don’t think about their insurance policies until something happens, and they need coverage. If you are in a minor car accident and get whiplash, or fall while hiking and break an ankle, deeming you unable to work, you will suddenly need to study the fine print of your employee benefits plan to learn about Short-Term Disability (STD).

What are the steps for Short-Term Disability claims and payments?

If you sustain an injury or have an illness, your Short-Term Disability claim will be based on whether your injury or illness symptoms prevent you from working.

STD claims begin with meeting the waiting period requirements outlined in your plan. You can find out what waiting period requirements you must satisfy in your plan booklet or by contacting your plan administrator. STD benefits can start at various times depending on the disability and plan design.

The second step in your STD claim involves the completion of these three documents:

  1. Physician’s Statement – Medical confirmation and details of the diagnosis and treatment from a physician. A claim from an undiagnosed or untreated applicant will not be honoured. Remember, your employer is not privy to Physician’s Statements; claimants should send this form directly to the insurer or the third-party administrator, such as Health Risk Services, who manages the plan.
  2. Employer Statement – Specific information is provided by your employer about your position, such as your salary, hours worked, duties and responsibilities.
  3. Employee Statement – This form must be completed by the employee/claimant with details of the disability, claim specifics, contact details, and any additional information the insurer needs.

These forms can be obtained from your plan administrator; the accurate completion of these documents is imperative to the claims process. Once submitted, your claim will be assessed, and you may be required to provide additional information during this process.

Once your STD claim is approved, you will receive weekly payments up to the number of months specified in your plan design. Typically, STD claims are paid up to 17 weeks (119 days); if your recovery demands a longer period of time, it will need to be integrated with Long-Term Disability.

Taxable or tax-free payments?

The answer to this question lies in the fact of who pays the premiums for your STD coverage. If your salary is deducted for 100% of your STD premium, your payments will be tax-free. If your employer pays for the entire premium or a portion of it, it is considered a taxable benefit and is subject to tax deductions.

What type of Short-Term Disability do you have?

There are two types of Short-Term Disability Plans – Employer-Funded Plans and Group Insurance Plans.

Some employers pay for their employees’ STD coverage directly through an Employer-Funded Plan rather than working with an insurance company. In this scenario, the employer works with a third-party administrator, such as Health Risk Services, to manage the plan and adjudicate and pay claims.  

Group Insurance Plans work directly with an insurance company that will handle, adjudicate, and pay the claims.

Why is a comprehensive Short-Term Disability Recovery Plan needed?

For you and your employer, recovering and getting back to work is the top priority. With the help of your physician and your employer, a Recovery Plan should be created stipulating the parameters for your return to work. This plan can include modified duties, additional aids, working from home, or a gradual return to work schedule. An effective Return-to-Work Plan is beneficial to everyone involved as it promotes normalcy and retention for the employee while relieving the insurer from extended disability payments.

The main concern about Short-Term Disability is how long it will last. Your physician should be able to provide you with a fairly accurate expectation of how long your recovery will take. If your recovery is longer than the STD period, the need to integrate Long Term Disability coverage is required. If a claim is elevated to an LTD status, employees should work closely with their employer and plan administrator to ensure the right steps are taken.

HRS can create Short-Term Disability programs that will enhance an employer’s benefits program by providing customized and fully adjudicated programs. Making sure employees have access to STD coverage gives them the financial security, support, and care they need. You can rest assured that HRS will walk you through any claims process from start to finish; we know disability intimately and all that it entails!

To schedule your Complimentary Consultation with Health Risk Services, please call 403-236-9430 OR email: info@healthrisk.ca

Stay tuned for the introduction of our TOTALHealth™ program! To be launched in 2023.