Take Time to Review Short-Term Disability Benefits

As part of your benefit plan offerings, your short-term disability (STD) plan may not be the most exciting of all the benefits offered at your company, but it sure is important to your employees—the majority of whom may not have even $1,000 saved for emergencies. While STD benefits may not be top of mind for most workers, knowing they would be protected when needed is reassuring.

Employees want to know two things about their STD benefit: How much will it pay me and how long will it pay me. As the plan sponsor, however, there are more details to know about your plan. I’ll bet you haven’t reviewed your plan or thought about it a long time. Am I right? Well, I encourage you to pull out your plan document right now and check out some of the benchmarking statistics below.

[Related: Ancillary Benefit Plans, March 14-15, 2018, Las Vegas, Nevada]

Take a look at how your STD plan stacks up, according to data from the International Foundation of Employee Benefit Plans Employee Benefits Survey 2016 and Sagewell Partners 2015 Employee Benefits Benchmark Survey.

Employers Offering:  78.2%1 of employers offer an STD plan

Funding:  53.6%2 of employers pay for STD plan

  • 46.4%2 of employers offer a plan paid by employees either partially or completely
  • 36.7%1 of plans are fully insured
  • 56.2%1 of plans are completely self funded

Eligibility: The majority of employers—39.2%1—have immediate eligibility

Elimination Period:  73.7%1 of employers have the same elimination period for accidents and illnesses

  • Elimination Period for accidents: 37%2 of employers have a 7-day elimination period
  • Elimination Period for illness: 41.8%1 of employers have a 7-day elimination period

Duration: 55.5% of employers have a plan that will pay up to 26 weeks

Percentage of Salary Paid: 47.2%1 of plans pay at 60% of earnings

[Related: Overview of Disability Plans e-learning course]

What else do you need to consider with your STD plan?  Your plan should coordinate with sick pay plans, PTO banks, salary continuation plans, FMLA leave and long-term disability plans to provide the best protection for employees who find themselves unable to work due to accidents or illnesses. And, like all your plans, remember that employee communication of the plan is part of the puzzle!

International Foundation of Employee Benefit Plans, Employee Benefits Survey 2016
Sagewell Partners, 2015 Employee Benefits Benchmark Survey

Anne Newhouse
Anne Newhouse, CEBS
Information/Research Specialist at the International Foundation of Employee Benefit Plans

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