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Do you have a disability management policy?
Most companies want to provide sick benefits for their employees, to provide security and financial protection in the event of illness. The policy is usually broken into 3 areas: ad hoc sick days, short term disability insurance and long term disability insurance.
1. Ad hoc sick days - A company may provide between 3 and 6 paid sick days for temporary illness.
- This is usually "self funded", meaning that the employer continues to pay the employee their regular base pay or hourly wage, through payroll while they are sick.
- An absence greater than 3 consecutive days may require a doctor's note to be submitted to the employer.
2. Short Term Disability - Short term disability insurance is meant to cover the employee for up to 26 weeks (there may be a two week waiting period for benefits to commence) and sometimes combined with the Employment Insurance sick benefits.
- STD insurance typically reimburses the employee for between 66% and 100% of their regular salary during this period.
- The 26 week period may have different benefit levels (i.e. the first 5 weeks may be at 100% of regular pay, the next 10 weeks at 75% and the last 11 weeks at 66%).
- A doctor's note will be required to receive short term disability insurance.
- The insurer usually requires the employee to attend a "third party medical assessment" to corroborate the doctor's note provided by the employee. The secondary assessment will be performed by a doctor chosen by the insurer and attendance is usually required for continuation of disability benefits.
3. Long Term Disability - A comprehensive short term disability benefit file makes the application process for long term disability insurance easier.
- Long term disability insurance is usually administered through a third party insurer and the application and compliance process is determined by their policies.
- Extensive medical evaluation is required to be approved for long term disability by the employee's doctor as well as a "third party medical assessor" chosen by the insurer.
- The level of financial benefit typically ranges from 50% to 75% of the employee's regular base pay.
- For those employers who do not offer Long Term Disability insurance, the employee can apply for Employment Insurance disability coverage.
An employer of choice will always offer a comprehensive policy that covers ad hoc sick days, short term disability insurance and long term disability insurance. This is a valuable policy that most employees give very little thought, until they find themselves in need of the benefit.
Many employers outsource the disability management process to a third party for ease of administration and a greater level of confidentiality. |
