Just had a review of our Short-Term Disability platform with our broker. As a part of the review and dialog, I mentioned that we allow employees to combine available sick time with the STD benefit (garden variety 60% replacement policy) so they can hit 100% of their normal pay during their time out.
Apparently, this is a pretty rich way to approach the benefit, as our broker shared with me the industry
standard is to not allow that (I'm attributing that to the judgment of individuals like the guy on the bike to the right). The obvious logic is that if you cap pay during a STD period to the 60% available per the coverage, the employee has a powerful incentive to return to work. Make sense... This article from the St. Louis Dispatch agrees with that logic citing most plans as capping the payout to 40% to 70% of your normal pay.
I'm lucky since my current workforce is primarily white-collar, meaning my risk is pretty low. That said, I've supported big call centers and blue-collar workforces in which this type of employee-friendly policy might not have been a good idea based on the perennial FMLA and absenteeism issues. Presenteeism wasn't an issue in those environments, as the absenteeism rate was much higher than what we face at my company today.
Forgot to ask my broker if a company allowing use of sick time in conjunction with STD would drive rates up. My guess is that this is more of a preference, but they haven't built it into the cost model.
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