Time and Money: Short-Term Disability Insurance Can Bridge PFML Coverage Gaps

Paid Family and Medical Leave (PFML) benefits are there for those moments in life that go to the heart of being human. At some point, most people experience parenthood, caregiving and even becoming a patient, themselves. And while PFML is becoming more popular across the country, the benefits only go so far. That is why having Short-term Disability insurance remains an important part of an employer’s benefits package. It helps fill income gaps for seriously ill employees who need extended time off.
A handful of states have adopted some form of PFML to give employees job-protected paid time off to care for new child, recover from personal illness or care for a sick family member. Although this paid leave is available, coverage gaps can occur because state PFML laws limit how long employees can be out or how much they can receive in wage replacement while they are absent.
“Depending on the reasons for the leave or state PFML laws, some employees could go several weeks without a paycheck,” says Meghan Pistritto, Assistant Vice President of Product Management for Group Benefits Disability and Absence. “That’s a financial crisis waiting to happen. Short-term Disability insurance can be that safety net.”

What Happens When PFML Benefits Are Used Up?

Severe illness or injury can keep a person out of work long after PFML payments end. PFML plans generally allow a total of 12 weeks of paid leave depending on the state. This includes any time they take to care for others or for their own illness. This means an employee may not have the whole 12 weeks of PFML available for their own illness if they used up some of that time off early on to care for a child or a family member. The risk for a longer coverage gap is possible.
Even if an employer offers Long-term Disability (LTD) insurance, there’s the potential gap of more than three months without income. LTD usually doesn’t kick in until an employee has been out for 26 weeks. So for example, let’s do the math: PFML runs out at 12 weeks and LTD starts at 26 weeks. An employee could go 14 weeks without wages. But, STD plans commonly have six months of benefits and can bridge that gap.
Most Short-term Disability plans also pay a higher portion of an employee’s pay. PFML plans often cap cash benefits well below the wage level of higher earners, Pistritto says.
 “A Short-term Disability plan remains an important part of the overall benefits package,” Pistritto explains. “It can help provide additional income when state PFML benefits end and it generally results in a premium decrease for employers.”
Learn more about the caps and gaps in coverage for each state by visiting our PFML Resource Center.
Disability Form Series includes GBD-1000, GBD-1200, or state equivalent.
This informational material is subject to change as The Hartford continues to receive guidance from states and municipalities. It shall not be considered legal advice. The Hartford assumes no responsibility for legal compliance with respect to an employer’s business practices, and the views and recommendations contained herein shall not constitute The Hartford’s undertaking on a company’s behalf, or for the benefit of others, to determine or warrant that an employer’s business operations are in compliance with any law, rule, or regulation. Employers seeking resolution of specific legal or business issues, questions, or concerns regarding this topic should consult their own attorney or business advisors; and employees should continue to consult their employers’ Human Resources or other employment benefits department for guidance on the application of any law, rule, or regulation.
The Hartford Financial Services Group, Inc., (NYSE: HIG) operates through its subsidiaries, including underwriting company Hartford Life and Accident Insurance Company under the brand name, The Hartford,® and is headquartered at One Hartford Plaza, Hartford, CT 06155. For additional details, please read The Hartford’s legal notice at www.thehartford.com. Todos los beneficios están sujetos a los términos y condiciones de la póliza. Policies underwritten by the underwriting company listed above detail exclusions, limitations, reduction of benefits and terms under which the policies may be continued in force or discontinued.