Group Disability Insurance for Employers

KSA Insurance offers a variety of group disability insurance policies to help employers build a comprehensive employee benefits package for their valued workers. We work with businesses in Charleston, SC, and across the southeastern United States to help them find affordable, flexible policies that meet their coverage needs and budget.

To help you make an informed decision when building your employee benefits package, here is everything you need to know about group disability insurance for employers. Or, if you’re ready, you can request an online quote!

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Improve Your Employee Benefits Package

Building a comprehensive employee benefits package provides several benefits that contribute to a successful, productive business. A high-quality benefits package can help businesses attract top-level talent, retain valuable employees, reduce turnover, improve workplace morale, and increase employee productivity.

While disability insurance requirements vary by state, many small, mid-sized, and large businesses offer it to ensure their employees are financially protected in the event that they are unable to work due to illness or disability. Disability insurance helps employees receive the care and support they need to get their lives back on track and return to work as quickly as possible.

What is Group Disability Insurance?

While workers’ compensation insurance covers expenses resulting from work-related injuries and illnesses, group disability insurance ensures your employees are covered when a non-work-related accident inhibits them from working.

When an employee suffers a non-work-related injury or illness and is not able to work, disability insurance supports them by covering a portion of their lost income. There are different types of disability insurance, which differ in the amount of income they cover and how long they provide income reimbursement. Beyond providing relief for lost income, many disability insurance policies also cover rehabilitation expenses to help them return to work more quickly.

How Does It Work

There are two main types of disability insurance: short-term disability and long-term disability. Each type of disability insurance covers lost income for a fixed duration, which varies depending on your specific policy:

Short-Term Disability Insurance

Short-term disability insurance covers a portion of an employee’s income when the employee is forced to miss work for an extended period due to a covered incident.

Common short-term disabilities include:

Short-term policies typically cover a portion of lost income for anywhere from three to six months following the incident that caused the disability. However, the specific coverage period will depend on your policy. Depending on your coverage, short-term disability policies may cover as much as 80% of an employee’s gross income.

Long-Term Disability Insurance

Long-term disability insurance covers a portion of lost income for a longer period of time than short-term disability insurance. This type of insurance is ideal for employees whose disabilities cause them to miss work for longer than six months.

Common long-term disabilities include:

While long-term disability insurance lasts much longer than short-term coverage, it typically offers lower income reimbursement rates. However, these rates can still be as high as 60% of an employee’s gross income. In some cases, long-term disability insurance can be extended until the employee retires or reaches the age of 65.

Own Occupation vs Any Occupation

Employers should carefully review their group disability insurance policy to determine whether it offers ‘own occupation’ coverage or ‘any occupation’ coverage:

Own occupation coverage offers benefits to employees when they are no longer able to perform their current job, even if they would be able to work at another job.
Any occupation coverage offers benefits only when the disabled employee is not able to perform any job.

Disability Insurance Requirements

Different states have different requirements for employer-provided disability insurance. States that require short-term disability insurance include:

California
Hawaii
New Jersey
New York
Rhode Island

Small businesses may qualify for voluntary disability insurance if they employ three or more eligible employees. Eligible businesses will need to purchase a supplementary health insurance policy that is supported by your business.

However, certain industries are not eligible for voluntary group disability insurance. This includes but is not limited to:

A KSA Insurance agent will work with you to help you understand whether or not your business qualifies for voluntary group disability insurance.

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Whether or not your business is required to provide group disability insurance, it is an incredibly valuable policy that provides financial support for your employees when they are at their most vulnerable, making it a great option for businesses looking to build an appealing employee benefits package.

At KSA Insurance, we work with most major group insurance carriers and are licensed with Blue Cross, Blue Choice, Cigna, United Healthcare, Assurant, and Trustmark. Our experienced insurance agents will work with you to find a policy that meets your coverage needs and financial requirements.

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Frequently Asked Questions about Group Disability in South Carolina

What is group disability insurance?

Group disability insurance is a benefit generally offered by an employer (or employer group) that provides income replacement if an employee becomes disabled and is unable to work for an extended period. It’s not the same as workers’ compensation, which addresses work-related injuries.

Is an employer in South Carolina required to offer group disability insurance?

No. In South Carolina, while most employers with four or more employees must carry workers’ compensation insurance, there is no state law requiring employers to offer short-term or long-term disability insurance to employees. That means if you’re an employee covered under a group disability plan, it likely arises from your employer’s benefits package, not a statutory mandate.

What are the typical types of disability coverage under a group plan?

In the SC context you’ll often see two main types:

Short-Term Disability (STD): Covers temporary inability to work (weeks to a few months) for illnesses or injuries not necessarily work-related.
Long-Term Disability (LTD): Covers long-term or permanent disabilities that keep an employee out of work for extended periods (months to years or until retirement).

What kinds of disabilities are covered?

It depends on the terms of the group policy, but typical covered disabilities include illnesses or injuries that prevent you from performing your job (or a defined occupation) for a specified waiting (elimination) period. Policies may also include various impairments: physical disease, injury, mental disorders, pregnancy (in some supplemental plans) etc.

What is an “elimination period” or waiting period?

This is the time you must be disabled before benefits begin. For example:

For the state basic LTD plan, there is a 90-day elimination period before benefits apply.
For STD plans, you might have options (e.g., 14 or 30 days) depending on the plan.

How much of my salary will be replaced under a typical group plan?

That varies by plan. Some examples:

A long-term disability plan for South Carolina state employees provides 62.5% of predisability earnings after the waiting period, for the basic plan.
A short-term disability plan in one county offers 66.67% of weekly salary (up to a cap) after waiting period.

Is there a maximum benefit (cap) or income reduction?

Yes. Many plans have a maximum monthly (or weekly) benefit amount, and they often reduce benefits by other income (“deductible income”) that you might receive (e.g., Social Security disability, retirement, workers’ compensation). Examples:

The state basic LTD plan caps benefits at $800/month.
The county STD example has a maximum weekly benefit of $500.

How long do the benefits last under a long-term plan?

Benefit periods differ by policy. Some policies may pay until retirement age; others may pay for a fixed term (e.g., 2, 5, 10 years). The longer the benefit period (and the shorter the elimination period), generally the higher the premium.

What is “supplemental” group LTD?

Many employers (especially government) offer a basic LTD benefit automatically; then employees may opt into a supplemental LTD plan for greater coverage.

Example: In SC, state employees have a basic plan (at no cost if they enroll in health insurance) and may choose supplemental LTD with higher benefit amounts, cost-of-living adjustment, etc.

Are claims approved automatically? What is the process?

No, claims must be submitted and approved. Typical steps include:

Notify employer/insurer of disability and last day of work.
Submit Employee’s Statement, Employer’s Statement, Attending Physician’s Statement, etc.
Insurer reviews medical evidence, job duties, proof of disability.

The insurer may also coordinate with other income sources and ensure you meet definitions of disability in the contract.

What if I return to work or work part-time while disabled?

Some LTD plans include “return-to-work” incentives: you might be able to work part-time or in a reduced capacity and still receive partial disability benefits under certain conditions.

Example: The Standard’s LTD coverage for SC includes return-to-work services and allows partial benefits when you earn income.

What happens if my claim is denied?

You generally have rights to appeal. For instance, in South Carolina you may have up to 180 days to pursue an appeal for LTD denial. You’ll want to request the insurer’s decision in writing, understand why it was denied, gather additional medical/work evidence, and follow the plan’s review/appeal steps.

How does this interact with other benefits (Social Security, Workers’ Comp, retirement)?

Other income may reduce your disability benefit (deductible income).
You may be required by your policy to apply for other benefits (e.g., Social Security Disability) if eligible.
Workers’ compensation addresses work-related injury/illness; many disability policies cover non–work-related disability.

Are pre-existing conditions excluded?

Yes, many group disability plans include a pre-existing condition exclusion (e.g., you must have been actively at work and not receiving treatment for a condition for a certain period before coverage started) or they exclude disabilities arising from pre-existing conditions for a defined period.

What should an employer consider when offering group disability insurance?

Define eligibility (full-time employees, waiting period).
Choose elimination/waiting period (shorter = higher premium).
Decide benefit percentage and maximums.
Consider whether to allow supplemental coverage.
Coordinate with other benefits (health insurance, retirement, workers’ comp).
Communicate to employees: what’s covered, what’s excluded, how to claim.
Ensure compliance with ERISA if the plan is employer-sponsored (consult legal counsel).

What should an employee do if they think they may need to claim?

Read your plan summary and certificate of coverage carefully: know the elimination period, benefit percentage, exclusions, and how “disabled” is defined.
Notify your employer promptly of your last day of work and intention to claim.
Keep complete medical records and documentation of your condition, job duties, and inability to work.
Understand what other income sources apply and how they may affect your benefit.
Consider consulting an attorney or benefits advisor if denied or if the claim is complex.

Does rate/tax treatment differ?

Yes. If the employer pays the premium for disability insurance, the benefits are usually taxable when received. If the employee pays the premiums with after-tax dollars, benefits may be tax-free. (This is a general tax rule; specific plan terms and tax rules apply.)

Can I take the policy with me if I leave my employer?

That depends on the policy’s terms. Some group plans offer conversion or portability options, especially for supplemental coverage, but many terminate when employment ends.

For example: The state supplemental LTD allows conversion to an individual policy under certain conditions.

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Group Disability Insurance for Employers

Improve Your Employee Benefits Package

What is Group Disability Insurance?

How Does It Work

Get A Quote

Frequently Asked Questions about Group Disability in South Carolina

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Need help? Call now to speak with one of our customer service representatives.

(843) 408-4232

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