If you become sick or injured, and can’t work, you have more to worry about than just health care costs. You also have to worry about lost income. If you aren’t working, how are you paying for food? Or your home?
Disability insurance is an insurance policy for your paycheck. The disability benefits offered by Waters – together with state and federal programs – help provide you with a percentage of your income if you become sick or injured and aren’t able to work.
There are two main types of disability insurance, short-term and long-term. Both are provided to you automatically and for free by Waters (so there’s nothing you need to do to sign up.)
You also have the option to purchase extra, supplemental disability insurance as a new hire and during open enrollment, which we’ll cover below.
Short-term disability (STD) covers you if you’ll be out of work between 1 week and 6 months (7 to 180 days).
Short-term disability insurance pays out 100% of your base pay for the first 3 months (90 days), and then 70% for the second 3 months (90 days). The money you receive through these disability benefits is taxed like normal income.
To be eligible to receive benefits, you have to apply for disability (file a claim) at the time your disability occurs.
For assistance, email LeaveManagementUS@Waters.com.
If your condition keeps you from working for longer than six months, that’s when long-term disability (LTD) kicks in. This type of coverage pays 60% of your benefit salary, up to a maximum of $15,000/month.
Like with short-term disability coverage, the money you receive through these disability benefits is taxed like normal income.
Long-term disability coverage also includes:
- Critical illness coverage, which pays you a lump sum of money if you are diagnosed with any specific illness on a predetermined list set by the insurer
- A survivor benefit, which will pay your surviving spouse or partner a monthly payment, also known as an annuity, to help make up for the loss of your retirement income
Supplemental Long-Term Disability
If you choose, you can pay for supplemental LTD coverage. Having supplemental LTD coverage (aka voluntary LTD coverage) means you’ll be eligible to receive a larger percentage of your benefit salary if disability insurance kicks in. (66.66%, to be exact.)
The premiums for supplemental LTD coverage are paid from your paycheck AFTER taxes have already been taken out. The good news is, this means the extra percentage of your benefits salary you receive by purchasing supplemental LTD coverage is NOT taxed when you receive it. (That’s 6.66%, in this case.)
Here’s a quick chart of the time periods and benefit amounts each type of disability insurance includes.
|Length of Disability Claim||Benefits Received|
|Short-Term Disability||First 3 months/90 days||100% x Base Pay|
|Second 3 months/90 Days||70% x Base Pay|
|Long-Term Disability||Over 6 months/180 days||60% x Benefit Salary|
|LTD + Supplemental LTD||Over 6 months/180 days||66.66% x Benefit Salary|
For more details, visit WatersBenefitsNow.com.