Why should I consider Short-Term Disability (STD) Insurance?
Short-term disability insurance provides income replacement for non-job related injuries or illnesses that render you unable to work for a limited time period (up to 6 months). Enrolling in the City’s voluntary STD plan provides income replacement up to 66 2/3% of your base weekly salary to a maximum weekly benefit of $2,000 (reduced by any other income benefits you might receive for the same time period, such as sick pay).
What is the Waiting Period for Short-Term Disability benefits and is it work or calendar days that are counted?
The STD benefit waiting period (also known, as elimination period), is the number of calendar days before your short-term disability insurance can begin to pay benefits for time lost from work due to a disability (non-work related sickness or injury). It is best thought of as a “deductible” period for your STD policy. For example, let’s say you are enrolled in the 14-day waiting period STD plan and you are approved for disability benefits. Benefits will pay weekly from the fifteenth calendar day of disability and for your continuing period of disability up to a maximum of 26 weeks of disability.
Can I use sick pay to cover my time during the waiting period?
Yes, you can use sick then vacation pay to cover your time while you are in an STD waiting period. However, once STD benefits begin to pay (i.e., after the 14, 29 or 44 day of waiting period—depending on your plan election), you can no longer draw sick or vacation time. In other words, you cannot receive STD benefits and collect sick/vacation pay for the same calendar days/time.
Is my STD benefit payment taxable income?
No, benefit payments received for STD are not taxable income for Federal or State income tax purposes. Since you pay STD premium with after-tax dollars, your STD benefit payments are tax-free.
Are health insurance and retirement contributions deducted from my short-term disability check?
No. No healthcare premiums or retirement contributions are deducted from your short-term disability check. You will receive a direct invoice in the mail from the Payroll office for your medical, dental, vision, short-term disability and supplemental life insurance premiums. You must pay billed premiums by the specified due date. Any missed contributions to your Flexible Spending Accounts (either Health or Dependent Care) will need to be made up when you return to work. Once you return to work and start receiving a City paycheck, Employee Benefits will recalculate your FSA contributions to account for the missing contributions and you will see an increased contribution on your paycheck. You are not billed for any missed retirement contributions.