April 1, 2021
Yafa Sakkejha

The Neglected Employee Benefit - Short Term Disability

April 1, 2021
Yafa Sakkejha

Many employers lack an official short term disability program because small and medium businesses often cannot afford to add costs to an area that seems unquantifiable. People may rarely need to take more than 2 weeks off work for sickness, and are often encouraged to use vacation or personal days to fill the gap.

However, when a company has chosen to purchase long term disability insurance, a missing short term disability program can lead to an increase in claims for long term disability. Just like in baseball, not having a shortstop allows the opposing team to hit balls where catchers are not present and advance their position to an eventual home run. Or in this case, advance a health issue so far that the employee is no longer able to work for a long period of time.

It is critical when an employee begins a sick leave to provide support and resources as soon as possible. Support can be in the form of paid time off, access to mental health benefits, and most importantly, a third party review of the medical situation so that management is not directly involved in this area.

The goal is always to support an employee in their sick leave and provide a soft landing for them to return to work at the earliest opportunity. It is also critical to shield the business’s leadership team from getting involved in the private medical details of the case; this is to protect both the business and the patient from unnecessary risk and harm.

Returning to work is important for businesses, but also for employees. People do best when they have a sense of purpose, routine, regular income, and stability in their career.
It is a mental challenge to deal with the uncertainty of being off work and a reduced income. 

We hear from many employers on a range of issues: some are truly concerned for their staff, while some admit that they saw it coming and it was part of a larger performance issue. Regardless of the employer’s worldview, it’s critical to have a third party review of the situation.

We have heard from many businesses who use the EI sickness plan that EI does not adjudicate claims - they simply look for the presence of a doctor’s note and proceed to pay the claim up to the maximum of 15 weeks. This unfortunately sets a precedent and makes it difficult for an employee to find motivation to return to work. Statistically speaking, all disability case managers point to data that the longer an employee is off work, the less likely they will ever return to work at all. 

An employee failing to return to work leaves an employer with a difficult HR and legal quagmire. What happens if an employee refuses to return to work? Can the employer refuse to allow them back? Is that illegal? What are the costs and legal ramifications to an employer in this case? Can an employer terminate an employee who does not return to work?

Every case is unique, and every business requires an independent review. Legalities aside, if a business has not implemented any form of short term disability management, they should seriously consider doing so. This can either be through an insurance company early intervention program, a fully insured short term disability plan, or a third-party disability management firm. 

The rates to manage short term disabilities are very reasonable, starting from a few hundred dollars per case and up, and is an investment that pays off tremendously down the road. 

If you have questions, please reach out to your group benefits advisor. 

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