Short-Term and Temporary Disability Insurance: How Do They Compare?

Have you ever worried about being injured and wondered what will happen to your family if you cannot work? The good news is there are benefits out there to help if you do become disabled and cannot hold employment. Besides the Social Security Administration’s disability benefits, there are other sources of benefits that can provide a portion of your lost income if you are unable to work. Both short-term disability insurance (SDI) or temporary disability insurance (TDI) are offered by a majority of employers to help you provide for yourself and your family during this stressful period of time.

In some cases, your employer may offer both benefits. Find out more about how short-term disability insurance and temporary disability insurance differ and when you would choose which. 

What Is Short-Term Disability Insurance

Short-term disability insurance is generally provided by companies as part of their employee benefits package. If your employer does not offer short-term disability insurance, it’s possible to purchase SDI separately from your place of employment. Short-term disability is not connected with disability benefits from the Social Security Administration, such as SSDI and SSI. 

This insurance is supposed to pay you a portion of your salary if you use up all of your available sick days. This could be due to an injury, illness, surgeries, and childbirth. Employers are required by federal law to provide employees with a form of unpaid leave. Though the length of time you can receive short-term disability varies with the type of plan you or your employers have, the average time of coverage is 52 weeks. 

Short-term disability offers benefits that temporary disability insurance doesn’t:

• SDI will cover employees who are injured or sick outside of work.
• It pays a portion of the employees salary for generally up to 52 weeks.
• If not provided by employers, employees can purchase their own short-term disability outside of work. 

 SDI does have its drawbacks, such as:

• SDI does not cover any work-related illnesses or injuries 
• It does not pay the employee’s entire income.
• SDI expires after a certain period of time, depending on the plan. 
• It only goes into effect after the employee uses all of their sick time.

What Is Temporary Disability Insurance?

Another type of disability insurance, temporary disability is offered for short periods of time if mandated by your state. While TDI doesn’t cost anything, it is not intended to fully replace your income and only covers disabilities that occurred outside of work. Unlike short-term disability insurance, temporary disability is a government program similar to Social Security’s SSDI benefits.  

Temporary disability insurance will not cover work-related injuries, since those are covered by workers’ compensation benefits. However, temporary disability will cover leaves of absence due to childbirth and pregnancy. Typically, temporary disability insurance will pay up to 60 percent of your salary if you are on leave of absence from work for a period of three to six months. If your condition forces you to be unable to go back to work after that period, then it’s recommended you apply for SSDI disability benefits. 

Not all states offer temporary disability insurance. In fact, only five states and one U.S. territory offer a temporary disability insurance program: California, New Jersey, Hawaii, New York, Puerto Rico, and Rhode Island.

Benefits of temporary disability insurance include:

• Temporary disability insurance can pay typically 60 percent of your salary.
• TDI covers illnesses and injuries not suffered at work. 
• You can receive payments for a period between three to six months.
• TDI benefits can be activated before SDI benefits. 

Some cons to keep in mind about temporary disability insurance:

• Your TDI plan may not be long enough to cover the amount of time you will be unable to work.
• It does not cover work-related injuries and illnesses.
• It does not cover 100 percent of your entire salary.
• TDI benefits will expire after six months, leading you to apply for long-term disability benefits. 

What Illnesses Qualify For Short-Term Disability? 

If you become temporarily disabled for a non-work-related injury or illness, you may be eligible for short-term disability insurance. To see if your condition does qualify for short term disability, you’ll have to check your own policy’s legal language to determine whether or not your condition meets the policy’s definition of disability. You’ll also have to check to see what it says about whether or not a pre-existing condition is eligible for benefits.

While each plan has its own requirements, short-term disability insurance typically covers these conditions:

• Pregnancy & childbirth
• Cancer
• Surgeries
• Digestive problems
• Physical injuries incurred outside of the workplace
• Joint problems  

Conditions that are typically excluded from short-term disability insurance include cosmetic surgery, mental illness, and alcoholism. 

Temporary Disability And Short-Term Disability Florida Laws 

The state of Florida does not require employers to provide short-term disability insurance and is not among the five U.S. states to offer temporary disability insurance. However, you can still purchase an individual short-term disability policy.  

Florida’s individual short-term disability policies are available in two formats with similar requirements. Remember, however, that either policy must be purchased before the need to use it arrives and both policies will exclude conditions for at least twelve months. This means you cannot purchase SDI the day after you suffer an injury and expect to use it. 

Voluntary Employer Policies

Even though Florida does not require companies to provide SDI, some employers offer an optional plan that is administered by a third-party insurance company. In this case, a portion of the benefit payments may be shared by the employer but it’s important to get all the details from your benefits administrator or HR department.

Private Policies 

You can purchase your own short-term disability policy outside of your employer, just as you may pay for your own life insurance, healthcare, or any other kind of insurance policy. There are a variety of vendors for short-term disability insurance and policies can differ greatly, so be sure to read the fine print before deciding on policy.

Before making a decision, it’s always best to explore your options further by speaking with your benefits advisor, HR manager, your insurance provider, or a disability expert. Want to speak with one of our expert disability advocates? You can always contact us here.