Can Employees Claim Short-Term Disability for Mental Health Conditions?

When an employee faces a serious health condition, their ability to work may be temporarily disrupted. Compounding a health challenge with loss of income then becomes exponentially difficult to recover from, as stress from one condition exacerbates the other. This is why many companies provide disability insurance, as it closes that financial gap to help employees recover without the stress of lost income.  

But does mental illness qualify as a covered condition for short-term disability benefits? 

The short answer for most cases is yes! An employee can make a disability claim for mental health challenges. However, qualifying for short-term disability for mental health depends on several key factors.  

Types of Disability Insurance 

There are two primary forms of disability coverage: short-term disability and long-term disability. As their names depict, short-term disability is for a much shorter period than long-term disability. Together, these benefits form a crucial safety net for employees navigating health-related work absences. 

Short-Term Disability Insurance (STD) 

Short-term disability coverage provides partial wage replacement for a limited period, typically up to 26 weeks (6 months), but may vary from policy to policy. Coverage often includes temporary disabilities arising from both physical and mental health conditions, which may include depression, post-traumatic stress disorder (PTSD), anxiety, or eating disorders. 

When Can Employees Claim Short-Term Disability Benefits? 

Most policies require a waiting period of 7-14 calendar days after the disability begins before benefits are paid. Having a waiting period helps ensure the policy is used for genuine disabilities and not brief illnesses. 

Accidents and state regulations may have shorter waiting periods than other mental or physical conditions. Please review your company’s policy for details. 

Long-Term Disability Insurance (LTD) 

Long-term disability coverage extends wage replacement for more serious or chronic health issues. LTD can last several years and sometimes through retirement age if the disability persists. 

When Can Employees Claim Long-Term Disability Benefits? 

The standard waiting period for long-term disability benefits is 90 days from the first day an employee is unable to work due to a qualifying condition. However, some plans may have waiting periods as short as 30 days and others as long as 365 days, depending on how STD and LTD benefits are structured together.  

Short-term disability insurance oftentimes acts as a bridge to claiming long-term disability because of the extended waiting period required for long-term disability benefits.  

Coverage for Mental Health Conditions 

Most employer-sponsored short-term disability plans cover mental health disorders, but only when they meet specific criteria: 

• A licensed medical provider must diagnose the condition. 
• Documentation must show the employee is unable to perform essential job duties.
  

This means employees with a serious mental health condition like anxiety, obsessive-compulsive disorder, depression, or post-traumatic stress disorder may qualify for wage replacement if their provider certifies the disability. Coverage details, exclusions, and waiting periods vary by plan, so be sure to check your company's policy for details.

Medical Certification Requirements 

For a disability claim to be approved, medical certification is critical. A doctor, psychiatrist, or psychologist must verify the condition prevents the employee from working. Insurance providers may also request: 

• Treatment plan notes or progress reports; 
• Therapy schedules; and 
• Medical examinations to confirm severity.

Without sufficient documentation, claims are often delayed or may be denied. 

Duration and Benefit Amounts 

Short-term disability insurance generally provides: 

• 50–70% of income replacement (sometimes up to 80%, depending on the policy) 
• 6–26 weeks of coverage, with a waiting or elimination period (often 7-14 days) before benefits begin

For example, if an employee earns $1,000 per week and the plan pays 60%, their benefit would be $600 per week during the disability period. Understanding these details will help you guide employees with financial planning during their leave. 

Interaction with Other Leave Laws 

In the U.S., short-term disability benefits often overlap with FMLA (Family and Medical Leave Act), which provides up to 12 weeks of job-protected leave for eligible employees in companies with 50+ workers. Short-term disability insurance covers wage replacement while FMLA ensures the employee’s job is protected. These often run concurrently. 

Be sure to coordinate benefits with applicable leave laws to remain compliant. 

State Disability Programs and Employer Policies 

Some states such as California, Hawaii, New Jersey, New York, and Rhode Island have their own disability insurance programs, which may include mental health coverage. Employers should also be aware that: 

• Many employer-sponsored short-term disability plans include waiting periods or exclusions for pre-existing conditions. 
• Policies may reset annually, affecting eligibility and benefit timing. 
• Short-term disability is sometimes offered as a voluntary benefit, meaning employees have to elect it as a supplemental benefit. 

Long-Term Disability Considerations 

If an employee’s mental health issues extend beyond the short-term disability period, long-term disability may take over. Long-term disability plans: 

• Provide wage replacement for serious or long-term conditions; 
• Often last until retirement age if the disability continues; and 
• Require careful review of plan documents for eligibility and benefit details.

Be sure your employees understand the transition process between short-term disability and long-term disability if their recovery is prolonged. 

Supporting Employees Through Disability Leave 

When an employee is considering short-term disability leave for mental health challenges, remember to be sensitive. Help them with the process by: 

1. Encouraging employees to review your insurance plan documents early and answering any questions they may have. 
2. Reminding them to consult with a healthcare provider for documentation. 
3. Ensuring HR provides clear guidance on the claims process. 
4. Communicating how short-term disability interacts with FMLA or state programs. 
5. Supporting employees in maintaining treatment and recovery efforts. 

Insufficient medical evidence may prevent employees from having a successful short-term disability claim. If you have an employee who does not understand the requirements for having their short-term disability approved, walk them through the process or have HR provide guidance. 

Final Word for Employers 

Short-term disability benefits are more than just an insurance payout; they are a lifeline for employees facing serious physical or mental illness challenges. Take time to understand how short-term disability applies to mental health, and guide employees through documentation and compliance requirements so they can benefit from this supplemental security income. 

For more information, please contact your certified HR rep. Not a current Stratus HR client? Book a free consultation and our team will contact you shortly. 

Sources:  
uschamber.com 
longtermdisability.net 
roylawgroup.com