What Every Worker Needs to Know About Disability Benefits
By Tom Breedlove of Breedlove & Associates
Disability benefits are short-term financial benefits provided to employees that are unable to work due to non-occupational illness or injury. (Note: If the injury or illness is work-related, the benefits fall under workers’ compensation coverage). An employee would qualify to collect disability benefits for maternity leave, a ski accident, etc.
Three states – California, New Jersey and Rhode Island – assess disability taxes as part of the payroll process. Two other states – New York and Hawaii – pay for disability benefits by requiring a disability insurance policy. In the other 45 states, disability is an optional insurance policy. It is relatively inexpensive and can be purchased by employer or employee.
The advantage of disability, like most insurance policies, is peace of mind. Let’s say you go skiing one weekend and hurt your knee. The doctor prescribes surgery and 3 weeks of rest. What do you about income while you can’t work? Does the family help you out or do they spend their money on a temporary nanny?
With disability coverage, neither party has to face this dilemma. You’ll get 50-100% of your compensation for up to 14 weeks (benefits vary by state/policy) so you get the income you need while your employer can spend their money on a temporary replacement.