This is your guide to configuring self-funded short-term disability policies in Cocoon. This article will help you understand how to set up your policy so Cocoon can provide accurate pay estimates and tracking for employees when your company handles disability payments directly.
30 second summary: A self-funded short-term disability policy means your company pays out disability claims and holds the financial risk, rather than a traditional insurance carrier. Cocoon supports self-funded policies by providing pay visualization, estimates, and claims guidance when you’re working with an insurance carrier that provides administrative services only (ASO). You’ll configure this during your policy setup by selecting Yes when asked if your plan is self-funded.
What is a self-funded short-term disability policy?
A self-funded short-term disability policy is when your company pays out disability claims directly and assumes the financial risk, rather than paying premiums to an insurance carrier who handles claims.
Many employers with self-funded policies work with insurance carriers that provide "administrative services only" (ASO). This means the carrier helps manage the administrative aspects of the policy while your company retains the financial responsibility for claims.
Setting up your self-funded policy
When configuring your short-term disability policy during onboarding, you’ll see the question “Is this a self-funded short-term disability plan?”
Select Yes to indicate it’s a self-funded policy, then complete the rest of the policy configuration.
How self-funded policies appear in Cocoon
Once configured, your self-funded short-term disability policy will be displayed throughout Cocoon in the following places:
Pay Timeline
Time periods that are eligible for pay from your self-funded policy will show up as “Pay from insurance” in the Pay Timeline.
Pay Tracker
To help employees understand the source of their disability benefits, payments from your self-funded policy will show as “Employer insurance” in the Pay Tracker.
Pay files
In your pay files, the “Employer STD amount” column will reflect Cocoon’s estimate of your self-funded policy’s contribution. This amount is separate from the “Paid leave” amount, which represents payments from your company’s paid leave policy (if applicable).
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We hope this guide has been helpful. Remember, we’re here to support you so if you have any questions or need further assistance, please don’t hesitate to reach out. Email us at [email protected].