Do I Have To Payback Short Term Disability If I Don’t Return To Work?

If you’ve been on short-term disability (STD), you may be wondering what happens if you don’t go back to your old job. Do you have to pay back your short-term disability benefits? The answer is usually no, but there are exceptions that you should know.

This blog will cover:

How short-term disability benefits work
What happens if you can’t return to work after STD leave
Whether you need to pay STD back if you quit, change jobs, or don’t return
What to do if your STD claim is denied or you’re facing repayment demands

What Are Short Term Disability Benefits?

Short term disability (STD) benefits is a type of insurance that provides temporary income replacement for a “short” time, if you are unable to work due to a medical condition or injury. The STD benefit will be:

STD benefits are finite in duration providing coverage up to 26 weeks
Benefits replace a portion of your income, typically between 50%-70%
The exact coverage and benefit particulars will be in your policy.

How Do You Qualify For STD?

To qualify for STD benefits you’ll need to apply to the insurance company describing your medical condition and why it prevents you from working. To get an application started, you’ll need to ensure three forms are submitted.

Plan Member Statement (“PMS”): The PMS is filled out by you and provides particulars of your medical condition and the date that it stopped you from working.
Attending Physician Statement (“APS”): The APS is completed by your doctor and provides specifics of your medical condition, treatment and anticipated prognosis
Plan Sponsor Statement (“PSS”): The PSS is completed by your employer and provides details of your employment (date of hire, job duties, etc).

Your insurance company will make a decision on your claim once these forms have been submitted.

What If I Can’t Return To Work After STD Leave?

If you have gone on STD and exhausted the benefit and are still unfit to return to work, you’ll need to apply for long term disability (“LTD”). LTD benefits begin after your STD benefits have ended. In most cases, your application should automatically transition to LTD without needing to complete another application. However, the approval process for STD and LTD benefits differ. Simply because you have been approved for STD does not automatically entitle you to LTD benefits.

Can I Get Another Job While on STD Leave?

If you are currently on STD and have found another job you can do, you must notify your insurer to avoid an overpayment issue.

If your STD claim has ended, you are free to find other work without worrying about paying the benefit back.
If you work while on STD without disclosure, the insurer may demand repayment.

Do I Have to Pay Back Short-Term Disability If I Don’t Return to Work?

Generally, no. You do not need to pay back short-term disability if you don’t return to your old job. However, repayment may be required in the following cases:

Overpayment: you have received income from more than one source and have been overpaid. If an overpayment issue occurs, you may need to payback all or a portion of the STD benefit.
Policy terms: some insurance contracts include repayment clauses in certain situations.

If you are facing an overpayment issue, it’s best to consult an experienced disability lawyer who can analyze your policy and the overpayment demand to evaluate its legitimacy.

What If My STD Claim Is Denied?

If your STD claim is denied for any reason, you have two main options:

Appeal – You can appeal the decision by submitting further medical documentation in support of your leave.
Consult a disability lawyer to challenge the denial of benefits on your behalf.

An experienced disability lawyer can help you navigate any STD overpayment issues or challenge the denial of your STD claim.

Need Help with a Denied or Repayment STD Claim?

Tough times don’t last forever. But the stress of dealing with a disability insurance company can. If your claim has been denied or you are facing repayment demands, Whitten & Lublin disability lawyers can help. Our disability legal team offers free consultations for short and long term disability denials.

Author – Aman Chaggar