Sick Pay (Short Term Disability Plan) Flashcards
Sick Pay (Short Term Disability Plan)
a plan that continues an employee’s salary or wages for a limited time if an employee is ill or disabled
How long does it last?
usually less than 6 months
When is it indicated?
mostly all the time
Can an employer discriminate?
yes
Employer can choose….
- who can be covered
- the level of benefits, which can vary from employee to employee
- terms and conditions of coverage
When does a short term disability plan go into effect?
when an employee’s sick pay benefits run out and extends until the six month limit has been reached
Sick pay
an uninsured continuation of an employee’s salary or wages for a short period of time beginning on the first day of illness or disability
sick pay usually covers….
a broad class of employees—usually only for full time emlpoyees
How is sick pay duration calculated?
usually tied to the length of service
Can sick pay benefits carryover?
yes–but with a cap on total accumulated sick pays
When are reduced sick pay benefits common?
when there is a long benefit period
Are short-term disability plans insured?
yes
As compared with a long-term plan, these short-term plans: (3)
- have broader coverage
- require less service for coverage
- definition of disability is typically more generous (“own occupation”)
What can the employer deduct?
payments made directly to employees as compensation and premium payments made under an insured plan
Are employer paid short-term disability insurance premiums tax free to employees?
yes
