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What Is A Short-Term Disability Insurance And How It Works?

Updated : September 11th, 2020

It is estimated that about 5% of American workers experience a short term disability due to various reasons, including pregnancy, illness, or injury. A disability may lead to a loss in income, thereby financial crisis. Fortunately, a Short-Term Disability insurance program can replace your lost income and provide you financial support while you take a break from your work to recover from illness or injury.  

What Is A Short-Term Disability Insurance?

Short-Term Disability (STD) insurance provides income replacement or compensation if you are unable to work for a limited period due to illness, injury, and childbirth. Generally, the insurance program pays 40% to 60% of your weekly gross income. 

Who Qualifies For A Short-Term Disability Insurance?

To be eligible for the Short-Term Disability insurance, you must meet several requirements. They include: 

  • You must have worked a minimum length of time before being eligible for the insurance program, i.e. 1 month or 6 months, depending on your state rules
  • The injury or illness must be non-work related
  • You must earn minimum wages if your state requires
  • Pregnant women can collect Short-Term Disability benefits for several weeks for delivery and recuperate 
  • You have to submit medical records to prove your disability
  • There is 7-days waiting period before benefits are payable. You cannot collect benefits until the 8th day of your temporary disability 
  • Benefits will not last more than 26-30 weeks ( 52 weeks in California)

States Providing A STD Insurance 

Only a few states provide Short-Term Insurance benefits. They include California, Hawaii, New Jersey, New York, and Rhode Island. A few states offer temporary disability aid to low-income families through other programs. 

For example, Maryland’s Temporary Disability Assistance Program (TDAP) offers monetary and housing and medical assistance. 

California, New Jersey, New York, and Rhode Island states have paid family leave programs, and states like D.C. are set to authorize a paid family leave program starting from July 2020.

How Does A Short-Term Disability Insurance Work?

If you are not able to work due to illness or injury for a limited time and have a Short-Term Disability policy, you can file a claim. While filing a claim, submit medical records or other information that proves you are unable to work. Once approved, the payment will be sent to you directly. Note that you use the money to pay any bills, and there are no restrictions or limitations on how the benefits must be used.

Who Pays For A Short-Term Disability Coverage?

The state or employer provides a Short-Term Disability insurance policy. Generally, employers who offer policy have a choice of having their employees pay for coverage, with tax implications. 

A Short-Term Disability policy provided by an employer pays a percentage of an employee’s wages for a limited amount of time. STD insurance policy given by employers may offer a wide range of full or partial income coverage, depending on the premium and policy level.

Each state has its own set of requirements as to whether companies must provide STD insurance. States can also decide the weekly cash benefit limits.

How To File For Short-Term Disability Insurance Program?

You can apply for Short-Term Disability either by filling a form given by your employer or 

By visiting your state’s Department of Labor and Workforce Development and filing the application form. The form will have 2 or 3 sections. After entering the necessary details in the employee section, give the form to your employer and doctor to complete the pending sections. 

Is Short-Term Disability Insurance Taxable?  

STD insurance may or may not be taxed. If you are paid with pre-tax dollars, the benefits will be considered a part of your income, and you would be liable to pay taxes. But if you are paid with after-tax dollars, you need not pay taxes on the benefits. 

Final Words  

Short-Term Disability insurance can provide you financial security when you are unable to earn income to support you and to your family. If you are injured or pregnant, and qualify for the insurance program, then hurry up and submit an STD insurance application. 


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  1. So I have been getting ue for 6 months and on Oct 21 I had a fact finding issue found and cleared after taking a month, I got put on hold I got nothing no benefits nothing because I am on hold until cleared up and it was another month later in my favor, I’ve been without payment since Oct 21 since then I have been on HOLD, I am beyond pissed, I call every Fri I see the letter I received saying its in my favor that says I am Monetary Eligible-yet I still have 6 payments on hold. I call DEO and I talk, I beg and I get told “we are working on it”, the letter is in my favor I am poor not rich I am poor Why how do you people get away with this

  2. Hello

    I’m 59 years old and was laid off in March 2020 due to Covid.
    In June 2020 I was advised my job was eliminated and there is no chance of me
    Being brought back. I’m collecting UI since March.

    Pondering the thought of taking my early retirement pension as I can’t survive on
    UI any longer. My pension is of course reduced due to my age. Full pension is age 62.

    If I apply for early reduced pension in this situation, does my UI benefit get decreased? I’m in New York.
    I’m still looking for full time work. No luck.

    Thank you so much

  3. i was just layed off from my job, i did collect benefits in pa. my job is seasonal igot unemployment payments in jan. to april i had 26 weeks of unemployment , but only used about 13 weeks, and was called back to work. i received 2 weeks of 600 dollars of stimlus money. my question is now that i reopened my 2020 claim . i,m i still elegibe for any more stimlus payments along with my regular unemployment payments.

  4. I am 65 yrs old in California and being layed off in Dec 2020. If I apply for unemployment benefits and collect a company pension, will the pension reduce the unemployment benefits ? If you answer call unemployment what is the department or do you have a phone number for a help line. I have called and get automated questions that do not apply to my situation.
    Cannot get to a live person.

  5. Several years ago I was part of a reduction in force and was early-retired for pension purposes. I count on this small pension ($2K/mo) to supplement my employment which has been inconsistent this past two years. I am filing for UI in IL and I qualify for it, but they are saying my pension reduces my UI benefit to zero. Is that right?

    1. Mike,

      That is partially right. The pension will have an impact on UI benefits. Please check for relevant info on the Unemployment Office’s website.

  6. I have $219.00 left on my UE and still no work due to covid-19 will i be able to get a extension on my UE and will it cover the last two weeks. I request payment tomorrow.

      1. My benefits have expired, still.unemployed due to over 65, wdiebrtes, high blood pressure and have one kidney, Can I get PUA , Cares Act for any assistance

  7. im working at a place i have been layed off from a lot in my career.i got 30 yrs in there so i can retire now but need another job to make it hoping to stay working and get more hours.If i take a new job and get layed off there I will BE DRAWING 1400 A MONTH FROM THE JOB I WORKED 30 YRS would i be able to draw unemployment if the new job lays me off and would it be reduced because of my retirement money of 1400 month.

  8. My bf was laid off in April he got the the 600 to start with now he is only getting the unemployment and no extra when we hear ppl getting 3 checks totaling 40k that might be lies but still that is bullshit.

  9. I Sharon Bland or Sharon Scott or Sharon Ann Mccraw
    Use my phone to claim two of my boyfriends and my own benefits. Is that ok ?

  10. I’m getting pua on employment and it was supposed to be backdated to May 27th when I wasn’t ableable to start my new job and somehow it’s August 24th they said it would be backdated been sending messages and pua people keep saying they have emailed you guys too but nobody gets back to me who do I need to contact about this thank you

  11. I check my checking account balance every week but I cannot tell if I am getting my 300.00 extra unemployment. Also. How can I tell if I got my back time unemployment .

    1. Thelma,

      I did not understand what you meant. Please reach out to the Unemployment Office for precise answers to all your questions.

  12. I have exhausted my UI and all extensions. Not eligible for Fed Ed. Does EDD open a PUA claim for me. Or do I have to aoole for it. Its been past 30 days since receiving my Fed Ed denial letter.

  13. i have been unemployed for the whole year almost and since i have been trying to distance myself to better my all around health, it took me this long to file for benefits, i was hoping to get back pay all the way to the beginning.

    1. Zach,

      To qualify, the claimant is required to have sufficient earnings/employment during the “Base Period”. Please use the “Benefits Calculator” available on this website for more.

  14. Thank you o much for investigating this. When I received an overpayment statement and my benefits where stopped I felt my heart drop to my stomach. Already being evicted by a slumlord and now no income, i had to start working when i feel very at risk for getting the virus because of pre-existing conditions and the reason for filing in the first place. i am a cosmetologist and considered non-essential. I feel utterley hopeless and helpless in this situation.

  15. I cannot contact anyone in the unemployment offices because the phone hangs up on me in all cases after listening over and over the recorded message. I have called three numbers .

    I have received pandemic unemployment since March 31st. There was a pending adjudication but I never received any questions, letters nor emails about it and I was approved and paid. Now…this is what the website says:
    7 of 7 entries
    Issue Identification Number Employer Name Issue Type Status Date Mailed Level
    0002 7693 59-01
    PUA Pending 11/16/2020 Adjudication
    0002 4773 71-01
    Program Integrity Mailed 11/6/2020 Adjudicati
    Claimant Inbox
    Select the Search button to display your action items. To narrow your search, input issue date range below and select the Search button.
    Issue Date: From: To: 11/6/2020 to 11/16/2020
    • Below are the items that require your attention and that you need to take action on for your claim.
    • Select the Document ID
    I need this money to survive as others do while I am trying to re-establish any contract freelance work I am capable of doing….I report my small jobs as I get them but they do not come close to equaling my unemployment as of yet. Please tell me where I can go to find out what is needed here.

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