Short Term Disability

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• Employees want and need this coverage!  Provides weekly benefits that to pay for all the necessities of life:

  • Housing

  • Food

  • Clothing

  • Bills

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• Provides a stop-gap until other income protection programs become available to employees....long-term disability, Social Security, etc.

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• Premiums can be funded several ways:

  • Employer contributions

  • Employee on a voluntary basis through payroll deductions

  • Combination from both Employer & Employee

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• HIGHLY RECOMMENDED to properly structure the premium payments so that Benefits are received on a Tax Free Basis

  • If Employer Paid - make this premium amount taxable to the employee

  • If Voluntary Basis -  use After-Tax payroll dollars to pay the premiums

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• Typically plans will cover up to $1,500 in weekly gross wages at a level of 60%.  The maximum amount of weekly benefit that can be received is usually $900 or so

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• These policies typically cover periods up to 13 weeks.

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• This makes your benefits package more effective in attracting and retaining quality employees.