Voluntary benefits are becoming increasingly important to employees as they focus on their physical, mental, social and financial health. As a result, many employers have expanded their voluntary benefits offerings to address employees’ needs and improve their attraction and retention efforts.  Because some of these offerings are disability benefits, it’s more important than ever to understand the differences between short- and long-term disability insurance and COBRA. What are disability benefits? Disability benefits provide guaranteed income or job protection to employees who are unable to work due to serious illness or injury. The most common disability benefits are STD and LTD insurance. However, understanding the differences between short- and long-term benefits and other laws, such as the Consolidated Omnibus Budget Reconciliation Act , can be complicated and difficult for employers to navigate. This article provides a general overview of STD, LTD and COBRA and explores how b...

Many employers provide disability benefits to their employees as part of a comprehensive employee benefits package. Disability benefits replace a percentage of pre-disability income if an employee is unable to work due to illness or injury for a specified period of time. Employers may offer short-term disability coverage, long-term disability coverage, or integrate both short- and long-term disability coverage. Group disability benefits can be structured in a number of ways. The taxability of these benefits generally depends on how the premiums for the coverage are paid. For example, if an employer and its employees split the cost of premiums for disability coverage, and the employees’ premiums are paid on a pre-tax basis through a cafeteria plan, the disability benefits are fully taxable to employees. This Compliance Overview answers common questions regarding the taxability of disability benefits. Are the disability benefits paid to an individual included in gross income?   ...

Many employers provide disability benefits to their employees as part of a comprehensive employee benefits package. Disability benefits replace a percentage of pre-disability income if an employee is unable to work due to illness or injury for a specified period of time. Employers may offer short-term disability coverage, long-term disability coverage, or integrate both short- and long-term disability coverage. Group disability benefits can be structured in a number of ways. The taxability of these benefits generally depends on how the premiums for the coverage are paid. For example, if an employer and its employees split the cost of premiums for disability coverage, and the employees’ premiums are paid on a pre-tax basis through a cafeteria plan, the disability benefits are fully taxable to employees. This Compliance Overview answers common questions regarding the taxability of disability benefits. Are the disability benefits paid to an individual included in gross income?   ...