Short Term Disability Laws and Your Business – What you Need to Know
Recent studies have found that one out of every four twenty year olds entering the workforce will become disabled for at least three months by the time they reach retirement age. That's a big percentage, and helps to explain why more employees than ever are looking at short term disability coverage as an attractive benefit. While there are some short term disability laws that affect most businesses, these regulations are much less strict than most realize. For this reason, offering short term disability is benefit that can attract and retain great employees. Here's a quick look at some things you should know about short term disability, including the laws and some basic policy rules.
First, let's look at short term disability laws. As far as what kind of short term disability coverage employers are legally required to offer, the only one is really workers compensation. This type of short term disability coverage will pay your employee's medical bills and even help them by paying a percentage of their income in the event that they become injured on the job. It is very basic short term disability insurance however, and the important thing to remember is that unlike other forms of short term disability insurance it will only cover them if their disability occurs on the jobsite.
Basic short term disability policies will cover your employees no matter where their injuries or illnesses occur, but there are other points to remember. First, no short term disability policy will pay your employees all of their income. Sixty percent is a common number for most short term disability policies to pay out, but your employees may decide to contribute to their premiums and bump up the number by perhaps another ten percent. The reason short term disability won't pay the full amount is obvious – doing so would dissuade employees from getting better and returning to work, and could increase disability fraud.
Different short term disability policies define disabled differently, so if you elect to buy one for your workers, be sure that it gives them adequate coverage. While you aren't required to offer short term disability insurance beyond workers compensation, adding a short term disability option can boost your employees' morale and motivation and can help retain your best employees and attract the best new hires on the market. However, the workers comp you're required to offer as short term disability can be very expensive and involve high down payments and other hassles and expenses.
Alternative short term disability plans such as pay as you go workers comp like that offered from Unicorn HRO will allow you to stay within the limits of short term disability laws and save money. Pay as you go workers comp allows you to make payments based on actual data instead of estimates and lets you avoid the high upfront costs normally associated with them. With this form of short term disability coverage you'll also be able to avoid costly and stressful annual audits that most companies require. For the easiest way to provide the required short term disability coverage to your employees, pay as you go workers comp is one of your best bets.