There is no universal right to short-term disability benefits in Minnesota. While these are available for persons employed by the state, the right to benefits for other employees is completely dependent on the benefits package each employer offers as part of the employment contract.
In short, there are no government programs in Minnesota that provide short-term or temporary disability benefits to employees. Employers may offer long-term or short-term coverage or an individual can purchase it themselves.
Disability Insurance in Minnesota
Disability insurance is largely related to employment in this country since the primary economic loss suffered from a disability is loss of income. In fact, federal and state definitions of disability – both long-term and short-term – relate to the amount of time that a person is unable to work.
Disability coverage is offered to qualifying Americans through the Social Security Administration. However, it is also possible to get disability insurance through public and private employers or to purchase it privately.
Cost of Disability Coverage
Private disability insurance can be costly. The cost of disability coverage varies widely depending on several factors. These include:
- Strictness of requirements for qualifying under the disability plans.
- Amount of income the individual received, such as income that must be replaced in case of disability.
- Length of time in which benefits are paid.
- Individual's medical history.
- Period of time policyholders must wait before beginning to collect benefits.
Note that medical care is a totally separate issue from disability coverage. While a person suffering from a disability may require medical care, that care can be provided as part of their regular medical coverage through public or private medical insurance.
For example, if someone falls off a ladder while changing a light bulb and hits their head, they may need to go to the doctor. This is not part of disability coverage. Rather, disability coverage, if available, would only kick in if they were employed at the time and were not able to go to work in the weeks or months following the fall.
Types of Disability Coverage
Some types of insurance protect against a specific loss. For example, automobile theft insurance reimburses the policyholder for the value of a stolen vehicle at the time it was taken. However, this is not the case for disability insurance. Rather, the payout compensates the insured not for the disability, but for the lost income caused by a disability.
Take the case of an employee who earns $150,000 per year. If they are the one to fall off the ladder, and their injury prevents them from continuing to work, disability insurance would compensate them for some of their lost income. That only happens if the injury qualifies as a disability under their policy. It can be seen as covering the opportunity lost of the now-disabled worker.
Qualifying for Disability Coverage
It is not always easy to qualify for disability payments, even for an individual covered by Social Security disability or private disability insurance. Generally, an insured must satisfy a variety of conditions to receive disability payments.
For example, to qualify for disability benefits under the U.S. Social Security system, an insured must prove that, thanks to their disability, they cannot engage in any type of meaningful work at all. This plan also requires that a person show that their disability will last for at least a year or will result in death.
Some private plans have less stringent requirements, and the applicant only has to demonstrate that they can no longer continue in the same line of work they were previously engaged in. Premiums can be expected to be higher when the terms are more beneficial to the insured.
Social Security Disability Insurance
Social Security Disability Insurance (SSDI) is the disability option that covers the most workers in the country and in Minnesota. It offers income assistance for individuals who are unable to work because of a disability.
The medical condition that will qualify an individual for these benefits is met only if medical doctors project it to last at least one entire year or is expected to result in death. Note that those with a partial disability or a short-term disability will not qualify for SSDI.
Qualifying for SSDI Benefits
Social Security Disability Insurance is not open to all. It is funded through the federal employment income tax. Contributions as a percentage of income are deducted from employees’ paychecks in all jobs covered by Social Security, or paid by self-employed people on their net earnings.
Note that SSDI is an earned benefit, available only to those who have paid into the program and accumulated enough credits through their work history to be eligible.
Minnesota State Disability Insurance Benefits
The Minnesota State Retirement System offers both long- and short-term disability options to its employees. Employees must opt into these programs and pay a certain amount of their salary in order to be covered.
Anyone hired by the state before July 1, 2010, is not eligible for disability benefits until they clock at least three years of service. Those hired after that date require at least five years of service. This does not apply to those in the State Patrol and Correctional Employees Retirement Plan who are immediately eligible for disability benefits for on-the-job injuries.
Minnesota Short- and Long-Term Disability Benefits
Every state employee in Minnesota has the chance to enroll in short-term disability insurance at the time they are hired. If they opt not to do so, enrollment at a later date requires evidence of insurability. Short-term disability coverage only kicks in for total disabilities.
Benefits start on the first day of a total disability due to an accident or the 8th day of a total disability due to an illness or pregnancy related claim. The employee has to be under the care of a physician.
This coverage entitles the person to up to six months of benefits if they cannot work because of a non-work related injury, illness or pregnancy. It is intended to replace their lost income. The plan allows employees to choose their monthly benefit amount, ranging from $300 per month to 66.67 percent of their gross monthly salary. Sick pay or vacation pay does not reduce these benefit amounts.
Those state employees who enroll in long-term disability insurance are eligible for coverage only after they are totally disabled for six consecutive months. As with short-term disability, employees can choose their coverage amount, which ranges from $300 per month to 60 percent of their gross annual salary.
Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.