Short-Term Disability Insurance (STD)


Ana’s Story

Ana had just started a new job. She decided to ask her Human Resources (HR) representative about the benefits she was eligible for and how to sign up for them. The HR person, James, told Ana that the employer offered Short-Term Disability (STD) group coverage and that the initial enrollment period lasted for one month.

Ana had injured her back the year before and thought maybe she wouldn’t qualify for the STD coverage. However, James told her that through the group plan, she could sign up for disability income insurance without medical underwriting, as long as she signed up during the initial enrollment period. He told her that she would still have to disclose her condition, and she would have a six-month exclusionary period, but that they would not deny her coverage.

Ana signed up for the STD plan the next day. The group policy supplied by her employer had a one-year minimum service requirement, which meant that she would not become eligible for a benefit until she had worked at the company for a full year. For back injuries, there would be an additional six-month exclusionary period, which meant she would have to wait an additional six months to be covered, because her back problems were a pre-existing condition.

Two years later, Ana re-injured her back. She went to the doctor, who told her that she would not be able to work for at least three months. Ana immediately notified James, the HR representative, who gave her some forms that her doctor needed to fill out. Ana faxed the signed forms to James. There was a seven-day waiting period on her policy, which meant that she would start getting her benefits a week after she had left work.

After the waiting period, Ana began to get weekly disability benefits. She had earned $400 a week before her injury, and her policy paid 70% of pre-disability earnings, so she would get a $280 check every week until she returned to work or her policy ended. Three months later, Ana and her doctor decided that she could go back to work. She notified her company and went back to work the following week. Her STD benefits stopped.

Ana went to work for just four days before she realized that she was in too much pain to do her job. She worried that she wouldn't be able to go back on her STD benefits, so she spoke again with her Human Resources department. James told her that the group disability plan at her job allowed a two-week trial period, which meant that as long as she hadn't been back at work for two full weeks, she could go back on STD benefits. Ana decided to go back on the disability benefit until she was really better.

Two months later, Ana felt completely healed, but her doctor recommended that she take it easy so that her back didn’t get worse again. She remembered that her policy allowed her to return to work part-time and would pay 70% of her income for the hours that she couldn't work. She decided to work for four hours a day.

Before her injury, Ana had worked eight hours a day, five days a week, for $10 an hour. That came to $400 a week. By returning to work part-time, she would make $200 in wages, and the insurance would pay $140 (70% of $200) for the hours she was missing. After a month, Ana and her doctor agreed that she could return to work full-time. She let her HR department know, stopped getting her STD benefits, and returned to work full-time.

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