Protecting Your Team During Life’s Unexpected Moments
Group short-term disability (STD) insurance is an employee benefit that provides a portion of an employee’s income if they are temporarily unable to work due to a qualifying medical condition. It is designed to offer financial security during recovery from illness, injury, or childbirth.
How Group Short-Term Disability Works
Offered by employers as part of a benefits package, group STD insurance typically covers a percentage of an employee’s wages—commonly between 40% and 70%—for a limited period, often up to 3 or 6 months, depending on the plan.
Coverage usually begins after a short waiting, or elimination, period—often 7 to 14 days—after the employee becomes disabled and is unable to work.
Commonly Covered Conditions
- Recovery from surgery
- Pregnancy and childbirth
- Accidental injuries
- Illnesses that prevent short-term work
Key Features of Group STD Plans
- Guaranteed Issue: Many plans don’t require medical underwriting.
- Lower Cost: Group pricing helps keep premiums affordable.
- Flexible Funding: Plans can be employer-paid, employee-paid (voluntary), or shared.
- Tax Implications: If the employer pays the premium, benefits may be taxable to the employee. If the employee pays, benefits are generally tax-free.
Why Employers Offer It
Providing short-term disability coverage helps attract and retain talent, improves financial well-being for employees, and reinforces a culture of care. It also helps reduce the financial pressure employees may face during recovery, allowing them to return to work more focused and productive.
Important Considerations
Group STD is a short-term solution. It’s often paired with a long-term disability plan to provide extended income protection. Employers should evaluate waiting periods, benefit durations, and how STD integrates with paid leave or workers’ compensation programs.