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Understanding employer-provided disability insurance

On Behalf of | Mar 22, 2024 | Employment Law -- Employee |

Employer-provided disability insurance can protect workers if an illness or injury prevents them from working. This insurance can cover both short-term and long-term claims.

Knowing the details of this coverage can help employees make informed decisions about their financial security and well-being.

Coverage basics

Disability insurance offered by employers typically covers a portion of an employee’s income if they cannot work due to a qualifying illness or injury. This coverage can help replace lost income and provide financial stability during incapacity. Some of that money can be used to cover the premiums of other types of insurance, making it easier to get the medical care needed for recovery.

Duration matters

Employers may offer both short-term and long-term disability insurance options. Short-term policies cover part of an employee’s income for a short period following the onset of a disability. This coverage usually lasts up to a few months. Long-term plans cover employees for an extended period of time, often until retirement, if the disability persists.

Qualifying disabilities

To receive these benefits, employees must meet the criteria outlined in the policy. Qualifying disabilities include illnesses or injuries that prevent employees from performing their duties. These may consist of serious diseases, injuries or mental health conditions that significantly impair the ability to work.

Waiting period

Many disability insurance policies have a waiting period, also known as an elimination period, before benefits kick in. During this time, employees may need to rely on other sources of income or savings to cover expenses until they become eligible. The length of the waiting period can vary depending on the policy and may range from a few days to several weeks.

Return-to-work programs

Some insurance plans offer return-to-work programs to help employees after a disability. These programs may include vocational rehabilitation, job training or workplace accommodations. They support employees returning to previous roles or transitioning to alternative positions.

Disability insurance through employers provides important protection for employees. By understanding the coverage, employees can make informed decisions about their financial security and well-being in the face of unexpected illness or injury.