Does Short-Term Disability Cover Mental Health Conditions? What You Need to Know

Dan Suprenant is a senior director of Insurance Solutions at Northwestern Mutual.

If your mental health is making it difficult to keep up with work, you’re not alone. Deciding whether to step away from work to focus on your well-being is a significant choice, but the prospect of missed income adds money stress to an already overwhelming time. When you’re navigating life's unexpected challenges, worrying over finances shouldn't be another weight.

For many of us, even a short stint without a paycheck could mean turning to credit cards or other less-than-ideal options just to get by. According to one recent report,¹ the average American has just $500 set aside for emergencies, and about a third of us have no emergency savings at all.

The good news is that short-term disability insurance can help replace your income if you’re unable to work due to injury or illness. And that can sometimes include coverage when you miss work for a few weeks or months due to a diagnosed mental health condition.

Below, you’ll get an overview of whether short-term disability insurance provides coverage for mental health conditions. We also highlight some conditions that are commonly covered by short-term disability policies, walk through the process of submitting a claim, and answer other common questions.

Does short-term disability cover mental health conditions?

Many short-term disability (STD) insurance policies provide coverage for at least some mental health conditions or concerns—but not all of them. If you already have short-term disability coverage and want to know if your mental health condition is covered, you should check the policy itself. The insurance company can send you a copy if you don’t have it as a digital file or in a drawer. If you get the coverage through work, your HR department can help.

If you’re thinking about getting short-term disability income insurance and want a policy that provides coverage for mental health conditions, you should ask about the details. Your Northwestern Mutual financial representative is happy to talk through the coverage we provide.

Which mental health conditions qualify for short-term disability?

To know for sure what is and isn’t covered, you need to read your policy. Most policies don’t spell out or list which conditions are covered. Instead, you will need to review your policy’s list of exclusions, showing you which conditions are not covered. The most common conditions that are excluded are as follows:

• Conditions you had when you got the policy, which are known as pre-existing conditions
• Self-inflicted harm
• Substance abuse or illegal substances

In addition, because almost all STD policies cover only injuries or illnesses that are not work related, any mental health concerns originating from your workplace—for example, PTSD linked to an accident at work—would likely be covered by your employer’s workers’ compensation policy and not the short-term disability coverage.

How do I apply for short-term disability due to mental health challenges?

If you are experiencing a mental health condition that is preventing you from being able to work, you’ll want to review your policy, gather proof of your diagnosis, and contact the insurer. The process will often look something like this:

1. Review your policy

Because not all STD policies are the same, it's important to review your coverage. Some details you should be sure to double-check include these:

• Benefit amount: The benefit payable is equal to what percentage of your work earnings (usually 60 percent), and what is the maximum weekly benefit amount payable?
• Exclusions: Does your policy specifically exclude any mental health conditions from coverage?
• Proof: What evidence does your insurer require of your diagnosis, inability to work, and/or treatment plan?
• Waiting period: How long must you be unable to work before becoming eligible for benefits?
• Benefits period: How long can you collect benefits once your claim is approved?

2. Gather proof of your diagnosis

If mental health conditions are covered by your short-term disability insurance policy, you’ll need an official diagnosis from a licensed doctor or medical health professional, like a therapist, psychologist, or psychiatrist. This diagnosis is usually required by your insurer to act as proof that you have the condition.

In addition to your diagnosis and medical record, it can be helpful for your doctor or therapist to write a statement that details your diagnosis and how it affects your ability to work. They will probably need to provide a formal treatment plan and other details. If your mental health condition is being treated by multiple doctors, therapists, or other medical professionals, you may need a statement from each of them.

3. File your claim

If your policy is sponsored by your employer, filing a claim will likely mean speaking to HR to get the ball rolling. If it’s an individual policy, you’ll need to submit the claim directly to your insurer.

Once you’ve submitted your claim, you may need to wait while the insurer reviews the claim. And you may have a short elimination period, or waiting period, before the payout begins. After you’ve been approved, benefits often last for three to six months or until long-term disability coverage takes over.

Is my job protected when I use short-term disability for a mental health condition?

If you need to take time off work for mental health reasons—up to 12 weeks per year—a federal law called the Family and Medical Leave Act (FMLA) may protect you from job loss. When you return to work, your employer must place you in the same position (or equivalent) you had before your leave.

FMLA protects your job whether or not you qualify for or use short-term disability benefits and can also be used if you must take time off work to care for a family member (spouse, child, or parent) who is suffering from a mental health condition.

But you’ll qualify for FMLA leave only if you have worked at least 1,250 hours with your employer and have worked there for 12 months. And FMLA doesn’t apply to all businesses. Covered employers include:

• Private businesses with at least 50 employees within 75 miles.
• Public agencies (federal, state, local) and public and private elementary and secondary schools, regardless of employee numbers.

Another federal law, the Americans With Disabilities Act, prohibits workplace discrimination or getting fired for having a mental health condition that would be considered a disability.

Disability insurance is an important part of any worker’s financial plan

Taking time away from work for your mental health can feel like a difficult decision—especially when finances are part of the equation. But your well-being and financial stability are both very important.

Short-term disability insurance can protect your income if you find yourself temporarily unable to work due to injury or illness, often including mental health conditions. This makes it an essential type of coverage, like long-term disability insurance, health insurance, and life insurance.

It can be especially hard to sort through the details when you’re dealing with a lot. But you don’t need every answer right now or to do it alone. Your Northwestern Mutual financial advisor can help find the right amount of coverage for you—and make sure you have a financial plan to stay on your feet during difficult moments.