In the field of employee health benefits insurance, Short Term Disability (STD), Mid Term Disability (MTD), and Long-Term Disability (LTD) serve distinct functions and provide significant value for organizations and their employees. It’s important for both individuals and employers to understand the differences between these three types of coverage. 

Bridging the Immediate Gap – Short Term Disability (STD)  

Short Term Disability (STD) insurance is designed to provide income replacement during the initial phase of an absence due to disability. Typically, STD benefits kick in shortly after the onset of disability, with a waiting period ranging from 0 to 14 days. Benefits are usually paid out on a weekly basis, offering financial support during the acute phase of the disability. The maximum benefit period for STD coverage typically spans 17 to 26 weeks. 

Picking Up Where STD Leaves Off – Mid Term Disability (MTD) 

On the other hand, Mid Term Disability (MTD) insurance comes into play once the Short-Term Disability period has elapsed. MTD coverage provides income replacement for a specified duration, typically ranging from 12 to 24 months. Benefits under MTD are paid out monthly, catering to individuals who require extended time away from work due to disability. Total disability under MTD policies is often based on one’s ability to perform their “own occupation,” providing a nuanced approach to determining eligibility for benefits. 

The impact of MTD disability benefits in Canada 

  1. Origins and Innovations: GroupHEALTH stands as a pioneer in offering Mid Term Disability (MTD) insurance in Canada, spearheading innovative solutions in the realm of insurance benefits. 
  2. Cost Efficiency: Traditional Long-Term Disability (LTD) reserves can pose financial burdens for employers, as they must allocate funds for potential long-term claims. However, MTD benefits offer a cost-effective alternative, requiring less reserve funding and resulting in significant savings for employers. In fact, MTD benefits can reduce costs by up to 15%, offering a tangible financial advantage. 

Redefining Long Term Disability (LTD) 

When a Mid Term Disability (MTD) benefit is in place, the function of the Long-Term Disability (LTD) benefit is primarily to support individuals with serious and prolonged disabilities. In this scenario, eligibility for LTD benefits is typically assessed based on whether an employee can perform “any occupation,” not just the occupation they were working in prior to their disability leave. Eligible employees may receive support in retraining or seeking out alternate occupations if they are capable of working in another capacity.   

While Short-Term Disability (STD), Mid Term Disability (MTD), and Long-Term Disability (LTD) insurance serve the common goal of providing income replacement during periods of disability, they cater to distinct phases and durations of incapacity. By understanding each type of coverage, individuals and employers can make informed decisions to safeguard financial stability during times of adversity. 

Talk to an expert today! 

DMI is committed to providing timely support and information to our clients. We have been working with employees and employers nationwide to provide comprehensive end-to-end solutions for their absence and disability management needs. 

Interested in learning more about our services and how disability management services can help control disability claim costs? Request a free review of your claims experience from a DMI expert to determine if you will benefit from DMI’s claims management services.