Short Term Disability Calculation FAQs

OVERVIEW

Short Term Disability (STD) is a benefit that offers continued salary payments to an employee during a long illness or the birth of a child. The payments are usually a percentage of the employee's salary, and the benefit typically lasts between three to six months. This guide answers some common questions on how STD is calculated in Namely. 

 FREQUENTLY ASKED QUESTIONS

What are "minimum" and "maximum"?

The minimum and maximum represent the lowest and the highest volumes that can be elected based on an employee's salary.  These volumes will come directly from your policy and are set by the carrier.

Why is the rate in the benefits set up different than the rate that was provided during implementation?

In most cases, carriers provide a monthly rate for Short Term Disability based on cost per $10 of coverage; however, the Namely system calculates rates per $1000. The rate you'll see in Namely moves the decimal place over one spot form the rate provided. Our system will make these calculations automatically once you enter in the per $100 rate. 

For example, if the rate provided is $0.19 per $100, our system will translate that to be $1.90 per $1000 so that the premium calculates correctly.

How can I calculate an individual's covered payroll and premium?

Using the example of an employee making $70,000 per year with a policy percentage of 60% and a rate of $12.00 per $1000, you would:

  1. Take $70,000, and first divide by 52 to get $1346.15, then multiply by 0.6 to get $807.69 in volume.

  2. Then to calculate the monthly premium, take (807.69/1000)*12 to get $9.69.