Group plans that offer coverage for less than two years are classified as what type of coverage?

Group plans that offer coverage for less than two years are classified as short-term disability coverage. This type of coverage is designed to provide income protection for employees who are unable to work due to a temporary illness, injury, or disability. Short-term disability plans typically cover a portion of an individual’s salary for a period that usually ranges from a few weeks to a maximum of two years.

This classification is important as it helps define the expectations and policies surrounding benefit periods and eligibility for employees. Short-term disability is focused on a relatively quick recovery timeline, which contrasts with long-term disability coverage that provides benefits for an extended period, often until retirement age or for a specific duration defined by the policy.

While temporary disability coverage might seem similar, it usually refers to a specific type of coverage, often used in workers' compensation contexts. The terms long-term and permanent disability coverage indicate more extended, ongoing benefits, which do not apply to plans with coverage periods under two years. Thus, the correct classification is indeed short-term disability coverage.