The Internal Revenue Service (IRS) considers disability benefits under your employer sponsored plan a continuation of your salary; better known as a Third Party Sick Pay plan. Whether your disability benefits are taxable depends on your level of premium contribution. In general, if you pay 100% of the premium for your coverage with post-tax dollars, your disability benefits are tax-free. If your employer pays 100% of the premium, benefits are taxable. If you and your employer each pay a share of the premium, benefits are taxed proportionally based on applicable IRS rulings. Each claim is unique and your taxability will be dependant on the information provided to us by your employer at the time your claim is submitted