Short-term disability insurance protects business owners and their disabled employees.
Nixon & Lindstrom Insurance has a wealth of experience helping businesses large and small in Springfield and southwest Missouri select short-term disability insurance plans with competitive rates. Our agents work with a number of leading insurance carriers, including Mutual of Omaha, MetLife and UNUM. Request a quote today for detailed short-term disability plans and pricing.
Short-term disability insurance replaces lost income for employees who become temporarily disabled. If a sudden and unexpected illness or disability renders an employee unable to work, the loss of income could be devastating.
With short-term disability insurance, the employee receives a portion or all of their lost wages while disabled. Depending on the policy, a disabled employee will typically receive the replacement income for three to six months after a seven- to 14-day elimination period. Some policies will pay out the benefits for a year or more, but most employees need long-term disability coverage.
Employers may choose to pay all or a portion of the cost of coverage or make the benefit voluntary, shifting the cost to employees who elect short-term disability insurance.
Short-term disability insurance is intended to protect business owners and their disabled employees. In addition to replacing lost income for ill or injured employees who are temporarily unable to work, short-term disability insurance benefits employers. By assisting employees through their time of hardship, employers provide financial stability and increase the chances of workers returning in a timely fashion.
While employers usually shoulder the cost of providing short-term disability coverage, the insurance company pays out benefits to eligible employees. Being able to financially assist disabled employees without having to assume the full cost is another advantage of these plans. Only a handful of states legally require companies to offer short-term disability insurance. Many employers, however, offer these plans for the aforementioned reasons and because they receive a federal tax deduction.
In a competitive job market, an employee benefits package that includes disability insurance can be a useful tool to help small and large businesses recruit and retain quality employees. If your business employs laborers who perform dangerous or high-risk work, short-term disability insurance is a wise investment.
When considering the lost productivity from an injured employee and costs associated with turnover if he or she doesn’t return, short-term disability insurance may be well worth the cost. According to the U.S. Bureau of Labor Statistics, 42% of private industry workers and 26% of state and local government workers had access to short-term disability insurance plans in 2018.
The employer cost of offering short-term disability insurance depends on industry, geographic location, plan design, amount of covered payroll, number of employees and other factors. However, according to BLS data, most U.S. employers offering disability insurance pay the full cost of coverage for employees. In 2018, employers paid the full cost of short-term disability coverage for 85% of private industry workers and 87% of state and local government workers.
If your business is ready to extend short-term disability insurance to employees, contact Nixon & Lindstrom to start comparing plan options. Whether you’re a small or large business, our experienced agents can help you decide which plan is a good fit and roll it out to your team.