Paper Trails

Short vs long-term disability

Managing employee leave is a significant challenge for human resources departments, especially for small to medium-sized employers. With the various types of leave, such as short-term and long-term disability, business owners and HR professionals can be easily overwhelmed.  That’s why, in this article, we will look at the differences between short and long-term disability. By the time you finished reading, you should have a grasp on what short-term disability is, what long-term disability entails, and the differences between the two.

At Paper Trails, we understand the importance of providing education to help businesses effectively manage challenges like these. Therefore, we look to provide education at every opportunity to enhance business owners knowledge, allowing them to better manage their businesses.  Let’s get started.

What is short-term disability?

Short-term disability (STD) refers to a type of employee fringe benefit that provides financial assistance when an employee is temporarily unable to work due to a non-work-related injury or illness. The duration of STD benefits typically ranges from a few weeks to several months, depending on the specific policy. It is designed to offer financial support to employees during their recovery period.

Some key points about short-term disability

  • Temporary in Nature: STD is intended for short periods of disability, usually up to six months, although it can vary depending on the policy.
  • Non-Work-Related: STD covers disabilities that are not related to the employee’s job. It can include illnesses, injuries, surgeries, or medical conditions that prevent them from working.  Workers’ compensation insurance world cover those items related to work.
  • Financial Assistance: Employees receive a percentage of their salary as a benefit to help cover their financial needs.
  • Quick Approval: STD claims are typically processed more quickly than long-term disability claims, ensuring employees receive financial support promptly.

Scenarios for short-term disability

Understanding when to use short-term disability is also important. Here are some common scenarios in which STD benefits come into play:

  • Illness or Surgery: Employees who need time off work due to a medical condition, surgery, or recovery from an illness may qualify for STD benefits.
  • Maternity Leave: STD can be used for maternity leave, covering the period before and after childbirth, depending on the policy.
  • Accidental Injuries: Employees injured in accidents outside of work can use STD to cover their recovery period.
  • Medical Procedures: Any medical procedure that temporarily prevents an employee from working may be covered under STD.

What is long-term disability?

Long-term disability (LTD), on the other hand, is designed to provide financial support to employees when their disability extends beyond the short-term period covered by STD. LTD benefits usually begin after an employee has exhausted their STD benefits. The duration of LTD benefits can extend for several years or even until retirement, depending on the policy.

Some key points about long-term disability

  • Extended Coverage: LTD offers coverage for disabilities that are expected to last for an extended period past STD.
  • Non-Work-Related: Similar to STD, LTD covers disabilities unrelated to an employee’s job.
  • Financial Assistance: Employees receive a percentage of their salary as a benefit, just like STD, but the benefit period is considerably longer.
  • Waiting Period: There is usually a waiting period before LTD benefits kick in.

Scenarios for long-term disability

Long-term disability benefits become relevant when an employee’s disability is expected to extend beyond the short-term period. Here are scenarios in which LTD benefits may be used:

  • Serious Medical Conditions: Chronic or severe medical conditions, such as cancer, often require extended leave covered by LTD.
  • Permanent Disabilities: Employees who suffer permanent disabilities that prevent them from returning to work may rely on LTD benefits.
  • Recovery Period Exceeds STD: When an employee’s recovery period extends beyond the duration covered by STD.

Main differences between short and long-term disability

Now that we’ve clarified what short-term and long-term disability are, let’s explore the differences between them.

  • Duration: The most significant difference is the duration of coverage. STD is for short-term disabilities, typically lasting up to six months, while LTD extends to cover long-term disabilities that can persist for years.
  • Waiting Period: STD often has a shorter waiting period before benefits begin. LTD typically has a longer waiting period.
  • Benefit Amount: The percentage of salary paid as benefits may vary between STD and LTD policies. STD benefits are generally higher, covering a larger portion of the employee’s salary, but for a shorter period. LTD benefits may be lower but extend for a more extended period.
  • Approval Process: STD claims are usually processed more swiftly than LTD claims.

Is there a gap between coverage?

Yes, there is a gap between short-term and long-term disability. This gap highlights the importance of having a leave strategy in place. Employers must understand that STD benefits are designed for temporary disabilities with a relatively short duration, while LTD benefits cater to more extended periods of disability.

To bridge this gap effectively, consider the following:

  • Coordination: Ensure a smooth transition from STD to LTD benefits when an employee’s disability becomes long-term. This requires communication between HR, the employee, and the insurance provider.
  • Employee Education: Educate employees about the differences between STD and LTD, so they are aware of the coverage and can plan accordingly.
  • Policy Review: Periodically review and update your company’s disability policies in your employee handbook.
  • Consult with Experts: Partnering with experts can provide valuable insights in navigating the complexities of employee leave.


Managing employee leave, especially when it comes to short-term and long-term disability, is a critical aspect of HR responsibilities. Understanding the differences between these two types of disability benefits, as well as how to bridge the gap between them, is essential for creating a well-rounded leave management strategy.

At Paper Trails, we are committed to providing the education and resources needed to help businesses effectively navigate these challenges. If you need assistance with your employee leave policies, or any other HR related problem, please contact our team to chat about how we can help!