Short Term Disability

What Is Short Term Disability?

Let's quickly review what Short Term Disability (STD) insurance is. STD pays a percentage of your salary if you become temporarily disabled due to sickness or injury, and cannot perform you job duties. Group STD policies are "Guarantee Issue," so no medical exam is necessary to buy the coverage.

A typical STD policy will pay an employee between 50% to 70% of base salary — and in some cases employers will choose to subsidize a portion of the insured amount. Coverage usually begins after an "elimination period" of up to 14 days — during this period the employee is expected to use sick, personal, or vacation days.

STD benefits, which usually expire after 3 to 6 months, tend to have a maximum benefit amount per week (referred to as a "cap"). The good news is that the insurance benefit can be paid tax free if the employee pays for the policy premium and the policy premium is paid with after tax dollars. If either the employer pays for the policy premium, or if the premium is paid with pre-tax dollars, the STD benefits will be taxable to the employee.

Why It's Important

One specific reason why STD insurance is so important to ad agencies is that it covers pregnancies — which are consistently the most common STD claim filed by our clients.

Several U.S. states require their own STD coverage. While some states require the policy to be purchased through the state, other states allow providers such as the 4A's insurance partners to offer the policy. For example, California requires polices to be purchased through the state, while New York does not. For more information on U.S. state-mandated STD coverage, give us a call and we can walk you through the particulars.

So what makes our STD insurance unique?

  • Our STD insurance doesn't have a pre-existing condition exclusion
  • We offer 100% contributory polices