Although workers compensation insurance claims are reportedly on a decline in recent years, some fraud exists. Can an injured employee double dip benefits on claims payable through accident insurance or short-term disability (STD) insurance coverage?
You may provide as a standard benefit a short-term and long-term disability benefit as part of an overall health insurance benefit package. Indeed, many employers offer this coverage. It’s a valuable tool for attracting and recruiting top-tier employees for certain fields as well as providing a meaningful income replacement benefit in the event of a disability. This is particularly the case in a situation that is short-term in nature, and one where the employee is expected to recover and return to work.
The Basics Of Short-Term Disability Benefits
Short-term disability insurance is a workplace benefit used to provide replacement of income loss due to an injury or illness that may not be the result of the workplace. The purpose of this coverage is to provide certain benefits to the injured employee for a short period of time. It provides your employees with a short-term replacement of loss income for a period of up to 52 weeks in some instances, although 90 days (13 weeks) may be more typical. It provides income in times when the employee is unable to work in such instances as childbirth. And it provides coverage for injuries which may be either acute or chronic in nature, but where the employee is expected to return to work in a short period of time.
A disability expected to last more than 90 days in many policy designs switch to a long-term disability benefit. The amount of benefit payable can vary, depending on the insurance company. Anywhere from 40 percent to 67 percent of an employee’s weekly compensation is paid to replace the lost income due to the disability.
Short-Term Disability Vs. Workers Compensation Insurance
One of the chief differences you will find between short-term disability insurance and workers compensation insurance is voluntary benefit versus mandatory requirement. You, as an employer, choose to include short-term disability benefits for your employees. But you are also required by the state to carry workers compensation insurance.
The place where the injury or illness occurs is another important difference between short-disability and workers compensation. On-the-job injuries are provided for under workers compensation insurance, but not under short-term disability.
Having short-term disability in place for your employees may serve as a recruiting tool. But it is not as a substitute for workers compensation insurance coverage.