Disability Insurance for Teachers

Definition

Disability insurance replaces a portion of an employee's wages in the event of an illness or injury that prevents that employee from returning to work. Teachers are sometimes provided with disability insurance by their school districts at no cost. However, there are districts that require teachers to pay for disability insurance as a part of supplemental policies offered.

Eligibility

Disability insurance is considered supplemental coverage in most school districts. If the district does not pay for the insurance, full-time teachers have enrollment dates throughout the year when they can choose a disability plan. Before choosing a plan, you should ask what preexisting conditions may void your coverage.

Short-Term vs. Long-Term

Long-term disability covers a portion of salary for up to five years, or until age 65. Short-term disability provides a portion of wages for anywhere from two weeks to two years. Teachers should note that if the school district is paying the premiums, the teacher is responsible for the taxes on benefits collected.

Waiting Period

Choosing between long- and short-term disability should involve considering premiums, waiting periods and dependency on teacher salary. The longer the waiting period, the less the premium will be and visa versa. Long-term disability waiting periods range from 30 to 180 days, and zero to 14 days for short-term disability.

Social Security

Paying Social Security taxes qualifies teachers for disability insurance. However, Social Security only provides long-term disability insurance and does not begin paying until after five full months of not working. These benefits are provided for as little as one year or until age 65. Receiving disability benefits from Social Security also necessitates that your condition meets their requirements.

Teacher Retirement System

Because teachers are government employees, they are not required to pay Social Security taxes. Fourteen states currently do not make teachers pay Social Security taxes. Instead, teachers participate in a Teacher Retirement System (TRS). Each TRS will provide teachers with disability insurance, but because each of the 14 states has its own system, there are some differences in coverage that is offered. According to the Social Security Administration, a 20-year-old employee faces a three in ten chance of becoming disabled before reaching retirement. School districts are struggling to keep up with increasing health care costs, and as a result teachers are paying a larger share of their employee policies, especially disability insurance.