What is short-term disability (STD) coverage?

Short-term disability coverage (STD) offers wage replacement to persons who experience wage loss due to a disability. STD coverage lasts for up to one year.

What is long-term disability (LTD) coverage?

Long-term disability (LTD) coverage offers wage replacement to persons who experience wage loss due to a disability. LTD coverage lasts for at least one year.

How do you get STD and LTD coverage?

You can get STD and LTD coverage either through a group or individually. Group coverage can be offered by an employer, a professional group, or association. You can buy individual coverage directly from an insurance broker based on medical underwriting.

Are STD and LTD public benefits?

No. STD and LTD insurance are not government benefits and are not connected to any public benefit program. They are private insurance that you get through a private company.

To find out if you have STD or LTD coverage through your employer, talk to your Human Resources person. To sign up for an individual policy, contact an insurance company or insurance agent.

If you are looking for information about Social Security benefits for people with disabilities, see DB101's Social Security Disability Insurance (SSDI) article and DB101's Supplemental Security Income (SSI) article.

Who is eligible for STD and LTD coverage?

If you get disability coverage through your employer, you may have to work for the employer for a specified period of time – known as a service wait – before you become eligible for benefits. If you get disability insurance coverage from a professional group or association, you may have to be a member of the group or association for a set period of time before you become eligible for benefits.

You may buy individual policies directly from an insurance agent based upon medical underwriting. Individual policies are usually available if you have not had any medical treatment for a potentially disabling condition during the past 10 years. Medical treatment includes prescription medications and physician consultations.

How soon will I be eligible to enroll in benefits from STD or LTD coverage?

If you have employer-sponsored disability income insurance coverage, you must meet the active work requirement in order to be eligible to enroll in benefits. If you get disability income insurance coverage through a professional group or association, you must meet their specific requirements to be eligible to enroll in coverage.

How much income replacement will I get from STD or LTD coverage?

STD and LTD coverage means you will get a monthly income replacement that is either a percentage of your pre-disability earnings or a specified dollar amount.

Why should I enroll in group STD or LTD coverage during the initial enrollment period?

The initial enrollment period is the best time to enroll if you have a pre-existing condition. During the initial enrollment period, your medical history is usually not subject to medical underwriting. However, pre-existing condition exclusions may limit or delay the use of coverage.

What is a pre-existing condition exclusionary period in STD or LTD coverage?

A pre-existing condition is any medical condition for which you got “medical care” before the coverage effective date. STD and LTD plans may have pre-existing conditions exclusionary periods. During this period of time, your prior medical condition(s) will not be covered by the policy. However, after the pre-existing exclusionary period expires, the condition becomes covered under disability income insurance coverage.

How do I meet the requirements for a pre-existing condition exclusionary period for group coverage?

To meet the requirements for the pre-existing conditions exclusionary period for STD or LTD coverage:

Once the exclusionary period has passed, you will then be covered for any pre-existing disability.

How long does a pre-existing condition exclusionary period last in STD and LTD coverage?

In short-term disability coverage, a pre-existing condition exclusionary period usually lasts between 6 and 12 months. In long-term disability coverage, a pre-existing exclusionary period usually lasts between 12 and 24 months, or 1 to 2 years.

Do STD and LTD coverage offer health coverage too?

No. Disability income insurance coverage only offers wage replacement. In employer-sponsored coverage, the employer may use your eligibility for STD or LTD to determine continued eligibility for other benefits, such as health and life coverage.

Who pays for STD and LTD coverage?

If you have individual STD and LTD coverage, you will be responsible for all costs, which can vary depending on your health and the plan you choose.

For group STD and LTD coverage, you may be responsible for no cost, a percentage of the cost, or a set premium. With employer-sponsored coverage, you may be responsible for the amount that is above what the employer chooses to pay. The insurance company and your employer agree on the amounts that your employer and you will pay. Your employer can explain these benefits details.

How long does STD coverage last?

STD coverage can last up to 12 months.

How long does LTD coverage last?

LTD coverage can last from one year to age of retirement – usually 65. However, consult the summary plan description to confirm the number of years covered by the insurance policy.

How do I stay enrolled and eligible for STD or LTD coverage?

Enrollment and eligibility requirements depend on the type of short-term disability coverage you have -- group (employer, professional group, association) or individual. For example, if you have employer-sponsored disability insurance coverage, you will need to meet the active work requirements, which means you have to work a minimum number of hours per week. If you are unable to meet the active work requirements due to a disability and you have passed the service wait and pre-existing condition exclusionary periods, insurance coverage may be used to replace a portion of your wages.

If you have insurance coverage through a professional group or association, you will need to keep your membership to continue eligibility for benefits. For individual coverage you have to continue paying your monthly premium.

Does what I have in the bank or what I own affect my eligibility for STD coverage?

No. There are no asset restrictions for STD coverage.

What is the difference between private disability insurance, like STD and LTD coverage, and public disability programs, such as Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI)?

Private disability insurance coverage is offered through individual or group (employer, professional group, or association) plans. Private coverage does not have income and assets restrictions. Coverage varies between insurance policies.

State and federal wage replacement programs, like Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), are public benefits. To be eligible for public income replacement, a person does not have to belong to a group but must meet other specific requirements.

Can I keep my group STD or LTD coverage if I no longer belong to the group that offered the benefits?

Yes. Some group STD and LTD plans are portable, if you are not disabled when you leave the group. A portable plan lets you stay covered under the plan, even if you leave your employer. You would be responsible for paying your premium. Be sure to check your summary plan description to see if the plan is portable. If your STD or LTD policy is not portable, you must re-enroll during the initial enrollment period, and complete the service wait and pre-existing condition exclusionary period again.

What else should I know about STD and LTD coverage?

If you reduce hours or leave work due to a disability, you may be eligible to get partial benefits if this provision is included in your policy. Check the summary plan description for details. Also, you may want to consider consulting a benefits planner about Social Security disability programs, such as Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).