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Disability Coverage

Short-Term Disability/Weekly Indemnity

Short Term Disability or Weekly Indemnity coverage is intended to compensate employees who cannot work due to illness, injury or accident.  STD (or WI) is an income replacement benefit and will offer this income protection for up to 26 weeks – although 15 to 17 weeks is most common.  The rationale for STD running for 15 to 17 weeks is to coincide with the Long Term Disability Elimination Period (or Waiting Period) or to be used as a replacement for the coverage Employment Insurance (EI) offers.

STD or WI will generally begin paying on the 1st, 8th or 15th day of disability, but this will completely depend on the preference of each individual organization.  The benefit schedule itself is based upon an employee’s pre disability gross weekly earnings – typically between 50 to 66.67%.  Under the STD plan, the definition of disability is directly correlated to the employee’s inability to perform the major characteristics of their respective job duties and be under the direct care of a physician.

Long Term Disability (LTD)

Mirroring the STD/WI (Short Term Disability/Weekly Indemnity) Benefit, Long Term Disability (LTD) is designed to compensate employees who cannot work due to illness, injury or accident.  LTD is an income replacement benefit and will offer income protection from 5 years to Age 65.  The Elimination Period (or Waiting Period) for LTD Benefits is generally 15 – 17 weeks, which would most often coincide with the STD/WI or EI programs.

The LTD benefit should be considered to be one of the most important aspects of an Employee Benefits plan.  Every employee must answer the question as to what would they do if they were to get ill or were in an accident, never being able to work again.  Without an LTD benefit, welfare and charity are not good options and Workers Compensation only covers occupational injuries or illness.  A last aspect of LTD that is very often overlooked is the Cost of Living Adjustment (or COLA Clause).  A COLA clause would control for inflation and would normally mirror the CPI Index.  Please contact one of our experts to discuss this as well as many other interesting aspects effecting your LTD benefits.