Short Disability Insurance: Employer-sponsored disability insurance coverage is an important benefit for employees, providing income replacement to enable disabled employees to pay bills. Disability insurance is designed to replace a percentage of pre-disability income if an employee is unable to work due to illness or injury for a specified period of time. (Employers may offer short-term disability coverage, long-term disability coverage, or integrate both short- and long-term disability coverage.)
Short-Term Disability Coverage Short-term disability (STD) coverage provides disabled employees with a specified percentage of pre-disability income (typically 60 percent), once sick leave is exhausted. The duration of STD coverage can vary. Conditions that trigger payment of short-term disability benefits, such as pregnancies, strains, and sprains, usually resolve quickly and the employee is frequently able to return to work before benefits are exhausted.