If you’re forming a business and plan to have employees, you must acquire temporary disability insurance. If your employees are unable to work due to an injury or disability outside of work, this type of insurance will support them until they are able to return to work. Here’s more information about what temporary disability insurance is and why it’s important.

Your Guide to Temporary Disability Insurance

What Is It?

Temporary disability insurance is a government wage replacement program similar to workers’ compensation and unemployment insurance. The system was enacted in 1969 in Hawaii. If an employee cannot work due to an injury or debilitating illness contracted outside the job, they may qualify for partial paid disability for lost wages while they recover.

Who Provides It?

As the employer, your company will be responsible for providing temporary disability insurance. The plan you choose will determine the benefits your employee will receive while they’re disabled. Statutory plans provide 58% of the employee’s weekly average wages, and they’re entitled to receive it from the eighth day of disability up to 26 weeks.

If you don’t offer this coverage for your employees, you may be reported to the Disability Compensation Division of the Hawaii Department of Labor and Industrial Relations.

Who Does It Cover?

Although it covers full-time, part-time, and intermittent employees, it doesn’t include federal government employees, insurance or real estate agents paid by commission, some family employees, and student nurses or interns.

The injured employee must be employed at least 14 weeks and paid for 20 hours or more each week, earning at least $400 in the 52 weeks before the injury. The injury or illness must prevent them from performing work, and it must be certified by a medical professional. The employee will also have a formal hearing during the application process to determine their eligibility.

If you’re a business owner experiencing difficulty managing temporary disability insurance, contact the team at Talent HR Solutions in Honolulu, HI. This third-party service provider offers comprehensive HR consulting, such as payroll management, and will oversee all of your insurance and employee coverage needs. Learn more about their services online, or call (808) 354-0498 to schedule a consultation with a specialist.