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How Temporary Disability Benefits Work in the U.S.

Financial stability can be hard to maintain, especially if Paid Family Leave and temporary disability benefits are unavailable. Sometimes a disability comes out of the blue without notice. Not only will you be faced with a potentially lengthy period of unemployment, but the long-term effects of complex mental health conditions can be debilitating and downright life-altering.

However, short-term and long-term disability insurance like Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) cover wage loss or loss of earning capacity. In this post, we will explore what temporary disability benefits are and how they work to help casualties or patients who cannot work due to a chronic health condition, physical injury, or traumatic incident.

Can you get benefits with a short-term disability?

Lenient eligibility requirements make it possible to claim short-term disability benefits. The disability payments indemnify employees who lose wages due to an illness or injury outside work. Income taxes are not withheld from the benefits. But the amount paid out is less than the gross wages that someone at a full-time job would use. Some states, such as Rhode Island, New York, Hawaii, and Puerto Rico, have laws that require employers to extend the temporary disability insurance program to individuals with short-term disabilities who the Federal government does not cover.

How do you apply for SSD with a short-term disability?

There are various ways that individuals can apply for disability benefits. The procedure for submitting a request differs from scenario to scenario. Here are the methods that you can use to enroll in Social Security Disability with a short-term disability:

  • Apply online with the Social Security Administration (SSA) at https://secure.ssa.gov/iClaim/dib
  • Fill out a form and mail it to SSA from the U.S.
  • Call 1-800-772-1213 to apply over the phone
  • Apply in person at a local social security office (https://secure.ssa.gov/ICON/main.jsp)
  • Get in touch with the nearest Federal Benefits Unit if you’re outside the U.S. and its territories (https://www.ssa.gov/foreign/foreign.htm)

What qualifies as a short-term disability?

Non-occupational injuries, major surgery, chronic conditions, and illnesses expected to improve in more than a month but less than one year qualify as a short-term disability. However, your doctor or a Qualified Medical Examiner (QME) determines the severity of your illness and recommends a period of recovery or restricted activity. The employer, SSA, and the insurance provider then use the medical specialist’s evaluation to learn about the disability rating, or “partial disability” status. On the other hand, workers’ compensation covers any bodily harm or physical impairment on the job.

Reduced capacity to work or inability to perform specific tasks that arise as a result of disruptive or distressing health events falls into two categories:

  1. Temporary total disability (TTD)—When a staff member is unable to work at all
  2. Temporary partial disability (TPD)—When an employee can only work part-time or with limited duties.

What are some examples of temporary total disability?

Unexpected circumstances may hinder an individual’s ability to work for a short time. During this period of anguish and suffering where employment TTD benefits and Paid Family Leave are a cash flow solution, the full recovery of the ill or injured worker becomes the foremost priority before resuming the regular work schedule or performing any job duties again. Significant factors that can cause temporary total disability sustained at work include:

  • Fractures or broken bones
  • Cuts, burns, or other physical wounds
  • Sprains or strains
  • Pregnancy
  • Back problems
  • Dislocations
  • Shock or trauma
  • Surgery
  • Visual disorders
  • COVID, quarantine, or isolation

For more information, check out this article on what qualifies for short-term disability.

How do you know if you’re eligible for temporary SSD?

When it comes to working while collecting Social Security Disability Insurance benefits, the SSA is quite rigorous. As an independent Federal agency that administers the disability program, the SSA is responsible for ensuring that each applicant meets the following three eligibility criteria:

  1. You anticipate that your affliction or physical disorder will last 12 months on the minimum
  2. You are not likely to ever be able to return to your previous line of work or carry out any prior duties
  3. Your disability prevents you from pursuing other employment opportunities or adapting to other work

To put it another way, a short-lived infirmity or injury that leads to a sense of normalcy after just a few months or less than a year will disqualify you under the SSA’s definition and, therefore, the rules of disability. As such, beneficiaries can safely return to work during a trial work period. This is an opportunity to earn from a substantial gainful activity without jeopardizing their SSD benefits. $2460/month is the maximum amount that a statutorily blind person can make during this time before losing protection. Non-blind individuals can earn up to $1470/month.

How do you know when you’ve been approved for short-term disability insurance?

After filing a claim with the insurer or the state and successfully undergoing a review for short-term disability, you are officially eligible to aid in rehabilitating your physical or mental health. It is important to note that the latency period can vary by insurer. Within 14-45 days, a standard insurance company will notify you of their decision to approve you for a three- to six-month temporary disability insurance policy. It takes five months to obtain a confirmation for Social Security Disability Insurance (SSDI) from the government. Regardless of how long the disability lasts, you are entitled to pay the premiums, and the insurer is responsible for covering all TTD benefits due to you.

How much cash assistance can you receive on short-term disability insurance?

Taking advantage of short-term disability insurance gives you a cash benefit depending on your longevity with the company. Your employer-sponsored plan typically pays 50% to 60% of your weekly wages, so you can use the money to get back on your feet. Remember that you can alternatively get your entire paycheck from another broker or protection policy to make up the difference. And where the state mandates short-term disability insurance, authorities may regulate the percentage of your salary they can pay.

How long does short-term disability insurance last?

A range of payouts available to the policyholder in case of an agonizing accident or disease will have a duration. This works out to a full year at most, but some policies have a six-month payout window, while others offer disability coverage for up to three months. While some income safeguard packages will have a decreasing payout after a certain period, others will have a steadying reimbursement that does not change in the face of a set time frame. There’s no sweet spot in between. So to avoid surprises, it’s recommended that an active employee purchasing these offerings as an individual must carefully go through the fine print of the insurance contract.

What to keep in mind before applying for temporary SSD

1. Absence of concrete medical evidence

Insufficient medical proof related to an injury is one of the primary reasons for rejecting a temporary SSD application. Your physician should investigate your injuries or medical conditions and provide objective evidence of how the predicament affects your ability to work. Only then will a flexible time be granted to you based on the signed medical records and the Disability Determination Service office’s determination.

2. Appeal your previously denied request

When subsequent denial is likely, you should take a declined claim for temporary SSD seriously. The scrutinizing agent may turn down the application based on the prior SSD rejection, even though you applied again. Instead, pursue the appeal process by requesting a reconsidered decision after submitting detailed arguments against the original claim denial.

3. Failure to follow doctor’s treatment plan

Not complying with your doctor’s recommended course of treatment may lead the Social Security Administration to consider the claim of temporary disability a significant flaw. Through continuous assessment and therapy, the examiner will accurately assess the likelihood of your recovery and how your ailment prohibits you from working.

4. Long-term or active Social Security taxpayer

Your work history is vital information that can help you get SSDI benefits. If you have worked in a job that has paid contributions to the Social Security system for at least 5 of the last ten years, your case will stand a chance to be approved. This is based on a work credit system that qualifies you for short-term and long-term disability benefit payments.