Employees need more financial support from their short-term disability policies

• Key Insight: The real reason expanding state paid leave programs still fail to meet financial needs.
• What's at Stake: Employees who risk losing critical income even after their short-term disability claims get approved.
• Forward Look: Get ready for more state programs transitioning from collecting contributions to paying benefits.
  Source: Bullets generated by AI with editorial review.

For employees without additional employer support, taking extended time off can come at a steep financial cost.

The pace of Paid Family and Medical Leave (PFML) expansion has accelerated significantly in 2026, according to a recent whitepaper on the state of short-term disability from financial services company Voya, with more programs moving from collecting contributions to paying benefits to eligible employees on leave. 

While this is a meaningful step forward, federal and state policies are not always sufficient to meet employees' financial needs during periods of leave, providing employers with an opportunity to help bridge the gap.

"We have one federal leave management law and then many variations of state laws — both paid and unpaid," said aid Maleiha Russell, VP of life, disability and supplemental health at Voya. "There are a lot of complexities there for an employer to manage on their own while still remaining compliant and dealing with whether employees are receiving enough support." 

Read more: Nearly half of workers fear using disability benefits could cost them

Employees may take short-term disability leave for a variety of reasons, including their own medical condition, caring for a family member, supporting someone on military leave, or welcoming a new baby. The application process can be lengthy, requiring employees to notify their employer or HR, complete a disability claim form, obtain supporting medical documentation from a health care provider, and submit the necessary paperwork to their employer, insurer or benefits administrator. Even after a claim is approved, employees may receive only a portion of their regular wages, potentially losing even more income if their employer does not offer additional financial assistance.

"You may have job protection for a certain amount of weeks but only have income protection at a certain percentage," Russell said. "Or perhaps your income is covered by a company paid leave, but there are many state paid leave laws to consider. Trying to understand and keep track of where they're getting income from and how long they could be out of work is super complex and adds stress to an already stressful period."

Simplifying that process not only helps employees, but it yields significant results for employee productivity. Recent research from Voya found that 62% of employees who took leave said they trusted their employer more afterward, and 90% said they were very or somewhat likely to recommend their employer's leave benefits to others. Better-supported employees also experience smoother transitions during leave, Russell said, reducing disruption and minimizing the risk of turnover or burnout. 

Investing in the right tools and partners

The key to facilitating that support is providing clear tools and resources that can help both HR teams and employees better understand what to expect during a leave of absence. For example, once a disability claim is filed by Voya's partnering companies, Voya's My Absence tool helps manage the process by working with the employee's physician to confirm the need for time away, understand work restrictions, and address questions about the employee's medical condition, according to Russell. The tool can also be customized by employers to account for company-paid leave policies and other benefits, allowing those offerings to be coordinated with short-term disability coverage.

Read more: For disabled employees, financial security depends on benefits and guidance

Regardless of how they choose to address the financial needs of their workforce, Russell urged leaders to have leave information available because their employees are likely already dealing with extenuating circumstances.

"Most employees are not frequently taking leaves of absence," Russell said. "It's not something they're used to, so it's super important for us [as leaders] to try to connect those dots and set clear expectations so they're not so in the dark." 

For employers, that support can extend beyond simply helping employees navigate the logistics of leave, Russel said, it can also shape how they view their organization long after they return to work.

"Their job is people's livelihood," she said. "If you have an employer offering supportive services during your time of need, that builds huge loyalty with that employee to that organization for a long time."