Does Short-Term Disability Insurance Cover Mental Health Issues?

Short-term disability insurance could help save your bacon. If a medical condition temporarily renders you unable to work, you may get short-term disability benefits from your employer, the Canadian government, or private disability insurance coverage. Many short-term disability claims are fairly straightforward, but what about mental health issues?

Most people who experience mental health issues are unsure if they can get disability insurance coverage. That’s because it’s more difficult to prove your inability to work due to the effect of stress or other issues on your mental health. Mental health issues are invisible, affect each person differently, and are not as easy to claim as physical injuries, like a broken arm.

When claiming disability benefits for mental health issues, your specific situation can determine whether you get coverage or not. Here’s why:

Mental health disability insurance coverage

Short-term disability insurance replaces a percentage of your income if you become sick and cannot be gainfully employed. Depending on your employer group plan, or your private insurance coverage, short-term disability can cover as much as 50-85% of your current earnings. 

Is it considered a disability?

The definition of a disability is vague and can vary across insurers. Most insurers cover a range of mental health illnesses, such as Depression, Alzheimer’s, ADHD, Schizophrenia, Severe Panic Attacks, and Anxiety Disorders. 

Is it covered in the policy?

However, you need to confirm which illnesses an insurance company covers when you buy an insurance policy. If your insurer exempts a specific mental health illness, you will not be able to claim benefits for that illness.

Is there a history of mental illness?

Some insurance companies request medical exams, which may include mental health examinations. If you have a history of mental health issues or a family history of mental health illnesses, your insurer may provide coverage at a higher premium, or not cover mental health illnesses.

How much are the premiums?

You need to pay periodic premiums for your short-term disability coverage policy. Some companies pay a portion of your premium as an employment benefit. If you purchase a private insurance policy, your premiums for a policy with mental health coverage may be more expensive.

Claiming short-term disability insurance benefits for a mental health issue

When claiming mental health benefits, the process is similar across insurance providers and the Canadian government. However, there may be differences in forms, reports, and required documentation. Contact your insurance company or the federal/provincial governments to confirm the short-term disability claim process and requirements. 

Claims through insurance companies

Insurance companies require you to provide documentation that supports your short-term disability claim. You need to prove that you are unable to work due to mental health issues.

To claim mental health short-term disability insurance benefits, you may need to show medical records and reports that support your inability to perform any work due to the mental health challenges you experience.

You may also need to show evidence of ongoing medical care to improve your mental health conditions and prepare you to function adequately at work. Your insurance coverage policies may cover treatment plans to enable you to return to work.

Some insurance companies require medical records from specialized medical practitioners such as psychologists or psychiatrists to back up your short-term disability claim for a mental health issue. 

If you and your medical practitioner cannot prove that your mental health challenges prevent you from continuing gainful employment, your claim may get denied.

Claims through the government

The Canadian government also requires you to submit supporting documentation when claiming disability insurance benefits. 

For example, one of the requirements to apply for Employment Insurance (EI) sickness benefits is a medical certificate that shows you are unable to work due to sickness. The acceptable medical certificate must be signed by a medical practitioner in Canada or the United States. 

The Canadian government lists psychologists as medical practitioners who can issue medical certificates to claim EI sickness benefits. Psychologists offer health services to patients with mental health issues, thus this implies that you may get EI benefits for mental health disabilities. 

Additionally, if you experience impairments that negatively impact your everyday mental abilities, you may qualify for the disability tax credit (DTC). The disability tax credit relieves you of costs to take care of disabilities and reduces the taxes you pay. If you are approved to receive the DTC, you may also qualify for the Registered Disability Savings Plan (RDSP) that helps Canadians living with disabilities to save money tax-free.

Likewise, you may be able to claim short-term disability for mental health issues that affect your attention, concentration, and perception of reality. 

How to get short-term disability coverage for mental health Issues

If you’re an employee

If you are not able to work at all, or are unable to continue working at your current job due to mental health challenges, you can take some time off using your company’s paid sick leave. If you do not have sick leave benefits or have exceeded your sick leave days, you can apply for short-term disability benefits through your employer’s group plan.

If you’re self-employed

Self-employed individuals or contractors can use an existing short-term disability coverage from a private insurer, or apply for Employment Insurance (EI) sickness benefits, provided they have made adequate contributions in the year. 

Worker’s Compensation Benefits

Unlike physical injuries and sicknesses linked to work operations, it can be difficult to attribute mental health issues to work functions. However, if you can provide records and prove that you are unable to work due to mental health illnesses that are work-related, you may claim workers’ compensation benefits.

CPP & QPP

You can also access Canada Pension Plan (CPP) disability benefits or the Quebec Pension Plan (QPP) disability benefits if you contributed to the plan for the year and meet the eligibility requirements. 

Provincial benefits

Some provinces provide benefits for disabilities related to mental health issues. If you have little to no income due to a mental health problem, you can contact your province to see what benefits they provide. 

When a short-term disability becomes long-term

Sometimes, your time off work due to mental health issues can extend beyond periods covered by short-term disability. In this case, you can explore long-term disability insurance plans that replace a percentage of your income for life or an extended period.

Finding the right short-term disability insurance

Before you purchase a disability insurance policy, research disability insurance providers to find good coverage for an affordable premium. Compare the terms, cost, coverage, and requirements across insurers to get the best policy.