The Long and Short of Short- and Long-Term Disability Benefits

Ever wonder how your organization’s disability benefits stack up to others? We thought so!

For the following analysis, we’ve recomputed and condensed some disability benefits benchmarking data from our 2014 Employee Benefits Survey to share the long and short of short-term disability (STD) and long-term disability (LTD) benefits.

1-15_long-and-short-term-disability-benefits

STD

About four in five organizations participating in the survey offer STD benefits, and about 40% of organizations not offering STD benefits are based in states that provide temporary STD benefits. Here are the details on STD:

  • Eligibility—2.3 months is the average service period required for eligibility, and 34% of organizations offer immediate eligibility.
  • Waiting periods—7.4 days is the average elimination/waiting period for benefits and 14% of organizations have no waiting periods for benefits.
  • Benefit formula—56% of organizations base their benefit formula on a fixed percent of earnings and the average percent of earnings used in calculations is 65%.
  • Duration—26 weeks is the most common benefits duration.
  • Funding—43% of organizations fully insure STD, 48% completely self-fund, and 9% self-fund with some stop-loss coverage.

 [Related: Overview of Disability Plans E-Learning Course]

LTD

About three in five organizations participating in the survey offer LTD benefits. Here are the details on LTD:

  • Eligibility—2.2 months is the average service period required for eligibility, and 37% of organizations offer immediate eligibility for LTD benefits.
  • Waiting periods—4.1 months is the average elimination/waiting period for benefits, and 9% of organizations have no waiting periods for LTD benefits.
  • Benefit formula—82% of organizations base their LTD benefit formula on a fixed percent of earnings, and the average percent of earnings used in calculations is 60%.
  • Duration—The age of 65 or retirement is the most common LTD benefits duration.
  • Funding—80% of organizations fully insure LTD, 13% completely self-fund, and 7% self-fund with some stop-loss coverage.
  • Continued benefits—62% of organizations continue health care benefits for some period of LTD leave, and 14% continue health care benefits for the entire leave period.

 

LTD STD
Find more information in the Employee Benefits Survey 2014. And stay tuned for more special reports from the Employee Benefits Survey here on the Word on Benefits.

Neil Mrkvicka
Neil Mrkvicka
Senior Research Analyst at the International Foundation

Comments (2)

  1. Colleen Martin

    Was there any information on Offsets for LTD? and the average time before an Offset?

    Reply
  2. Frances Mackovjak

    We do not offer LTD, but according to our STD plan document, an employee need only return to work for 2 weeks before they are eligible again for another new bucket of 26 weeks! What are you seeing out there?

    Reply

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