Page 127 - Group Insurance and Retirement Benefit IC 83 E- Book

STD Benefits

The actual amount of the STD benefit is based on weekly income, rather than monthly

income and there is wide variation in the percentage of income paid for the short term.
While 662/3% is common, the range is from 50% to 70% and even 100% in some cases.

Following are several ways STD benefits are handled.

Some employers provide a STD policy that pays a certain percentage of the employee's

gross weekly earnings and the employer bears the balance, so the employee actually
receives 100% of earnings in the form of salary continuation or sick pay benefits. For

example, let's say the STD policy pays 60% and the employer pays the 40% balance. A

certain employee earns $700 per week. Here's how the plan works:

STD Policy: $700 x .60 = $420 per week

Employer: $700 x .40 = $280 per week
Employee receives: $700 per week

You'll recall that disability income policies typically pay less than 100% of earnings.
However, when salary continuation or sick pay benefits are funded by a short-term

disability income policy, full income may be paid either through the STD policy itself or
through a combination of the employer's direct contribution plus a percentage of income

provided by the disability policy as illustrated above.