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short term disability

We are a small company with 5 full time employees in Florida. We are currently in the process of putting together an employee handbook.

We would like to offer short term disability leave.
Can we design our own company policy and not have to get an insurance policy?

For example can we offer paid short term disablity for 15 or 20 days paid at 60% of their salary. They would first use any vacation or sick time and then the short term disability would kick in.

This would cover maternity leave also. We do have an employee that has adopted should we add anything for adoption or paternity leave.?


The state of Florida does not have a mandatory state short term disability plan. In addition in the state of Florida, larger companies do purchase short term disability plans from insurance carriers. However, it is cost effective for both small and large companies to self insurance their short term disability plans.

You can structure your plan however you want, just remember to place administrative “reasons” for what type of disability will be covered, and handle it consistently. Always require a doctor’s note for approval of short term disability benefits. Experience tells me that, companies are not health care providers, so always do as the doctor states. You can add in a second opinion at the companies’ option if you question the health care provider, that statement also keeps employees honest. You can have employees use any available accrued time such as sick days and vacation prior to using short term disability.

Typically, you should set aside funds each pay period to pay claims. It is basically your choice if you would like to have employees select if they want to participate and pay towards the insurance or just offer it to all employees at the company’s cost. Normally, healthy employees will not select it if you have employees contribute, non-healthy employee will select it and then you end up with adverse selection.

Also employees should work a period of time, typically 90 days, before they become eligible for STD. Full time employees are normally allowed to participate.

The STD package normally includes a percentage of weekly salary from 50% to 70% of weekly salary. The benefit period is usually between 10 to 26 weeks. It is a good idea to run the plan for a period of time that the employee can either qualify for long term disability or social security benefits.

This entry was posted on Sunday, February 10th, 2013 at 10:24 am and is filed under
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