Short-term disability insurance for maternity and pregnancy leave
Reviewed by
If you’re having a baby or thinking of getting pregnant, congratulations! As you ponder the big questions about how pregnancy will change your life, you may also have some more pragmatic questions about how your job and income can be affected. For example:
How long can I take off, and will I get paid?
Does disability insurance cover pregnancy and maternity?
How should I prepare financially?
These are all good questions to ask, but a lot of the answers may depend on your individual situation, the company you work for, and even the state you live in. Here are some basic details you may need to know.
Yes, you can take time off for maternity and pregnancy – but you may not get paid for it.
FMLA protects your job while you take leave, but not your income
While there’s no national standard for maternity leave length, the Federal Family Medical Leave Act (FMLA) protects your job for up to 12 weeks if you need to take time off to care for a newborn or adopted child, or an ailing family member. Benefits can begin as early as four weeks before the expected delivery date. But while employers are required to hold your job for you, they are not required to pay you during a medical leave. It’s also important to note that not every employee is eligible – here’s what’s needed to qualify for FMLA protection:
Your employer has at least 50 employees in a 75-mile radius
You have worked there at least 12 months
You have worked at least 1,250 hours in the past year
States with paid family and medical leave (PFML) laws
Recognizing the importance of parental leave, more and more states are enacting PFML laws that go a step beyond FMLA by providing paid leave for employees.
Each state sets its own rules about which employees and situations qualify for paid leave, how long paid leave lasts, how contributions to the paid leave fund are made, and the benefit amount. If you live in one of those states, go to the state government website and search for “Paid Family Leave” to find out the specific rules and benefits for where you live.
Some employers offer paid family and medical leave
Even if your state doesn’t have paid maternity leave laws, your employer might provide benefits that replace your income, like short-term disability insurance. While employees often expect companies to provide paid sick days and vacation days, they don’t always ask about maternity leave.
Does your company offer these benefits? How long do they last? How do you qualify? How much will you get? Like state PFML rules, it varies from company to company – but there’s an easy way to find out: just contact your human resources department or manager. Finally, if you are starting a new job, you can inquire about having paid family leave benefits included as part of your compensation package. It never hurts to ask.
The Pregnant Workers Fairness Act (PWFA) helps ensure job protection
The PWFA means that pregnant workers don't have to choose between a healthy pregnancy and a paycheck. Private and public sector employers with 15 or more employees are required to provide workers with reasonable accommodations to any known limitations related to pregnancy, childbirth, or related medical conditions. For example, you may be unable to lift heavy items, or you may need additional break time to use the bathroom. Your employer is required to accommodate those limitations without penalizing you.
Disability insurance may provide benefits – but it depends on your policy.
Your short-term disability plan may cover pregnancy
Do you have short-term disability (STD) coverage through your workplace? Some people think that disability insurance is for when you experience a disabling event. But short-term disability insurance also provides income replacement if you're unable to work due to all sorts of illnesses and injuries, whether they occurred on the job or outside of the workplace – and including for maternity leave.
Maternity leave would qualify for benefits under most short-term disability plans, if you're unable to work due to the pregnancy, childbirth, and recovery, with the certification of a physician. When you have short-term disability through an employer, you may qualify to receive 50-70% of your income, typically for up to eight weeks after you give birth, depending on the type of delivery. These benefits are determined based on the average weekly wage, which is derived from the worker's base year earnings. A pregnancy with complications can be covered, because (depending on the issue) a complication can be more like an illness and the benefit period could well be longer. Policies have different requirements, so it’s important to find out what’s covered before you go out on leave.1 Also, talk to your human resources manager about the correct ways to submit claims for private or state disability insurance plans.
Long-term disability coverage (LTD) can provide further protection
If you have long-term disability insurance that you purchased through the workplace or as an individual from an insurance company, it typically won’t cover a typical pregnancy and recovery, due to the longer elimination period required under an LTD plan. However – as with STD coverage – complications are another matter, and if an issue renders you unable to work, it will generally be covered if the disability satisfies the benefit waiting period for the LTD. Also, pregnancy can worsen other conditions that may have been dormant or under control, such as diabetes or multiple sclerosis. Post-partum depression can be an issue for people who have never experienced mental health issues, and if it causes you to miss work, it could be covered by your LTD policy.
One thing to remember about LTD coverage: compared to STD coverage, there’s typically a much longer waiting or elimination period until benefit payments start. The typical STD plan has a 2-week waiting period. With an LTD plan, the elimination period commonly lasts 60-90 days, but it can be as long as a year.
How to get short-term disability coverage for pregnancy
If you just started a job that offers disability insurance, you may be able to sign up for coverage and receive any benefits available without issue. Employer plans (also known as “group” plans) buy coverage for many employees at once and don’t typically require medical underwriting – you don’t have to answer health questions or undergo a medical exam. Pre-existing condition limitations may apply – review your policy or check with HR for additional details.
It’s different when you buy disability insurance on your own. Individual policies, or voluntary group policies – whether STD or LTD – typically require medical underwriting, and pre-existing conditions are typically excluded. If you apply during your pregnancy, it will be considered a pre-existing condition. While the insurance company may write the policy, any disability or claim relating to pregnancy will probably be excluded.
Consider other ways to get financially prepared for maternity
There’s no getting around it: having a baby is a big financial commitment. But a little planning can go a long way toward helping relieve any financial stress you may be feeling.
If you’re not already saving, start
Start a maternity leave savings fund, ideally before you become pregnant. Actually, it’s a good idea to get in the habit of saving beginning with your first paycheck from your first job. Pay into a couple buckets: one for short-term needs, the other for long-term. Maternity leave is a good example of the kind of a savings need every prospective parent should be preparing for.
Find out about your benefits at work
In addition to any disability benefits you may be eligible for, see if there are other types of useful insurance benefits available through work. For example, hospital indemnity insurance is a popular, cost-effective workplace benefit that can help cover hospital stays due to delivery or complications from the pregnancy. However, items covered, and reimbursement amounts, vary greatly from plan to plan, so make sure you’re familiar with your employer’s specific benefits before signing up.
Bank your paid-time-off (PTO) days
Avoid using sick days, personal days, and time off as much as possible in order to build up a store of paid days off. If you can squirrel away 20 PTO days by the time you take maternity leave, that will give you a month of full salary before you have to dip into savings or start relying on benefits.
Pay into your Health Savings Account (HSA) or Flexible Spending Account (FSA)
What are HSAs and FSAs? They’re special accounts you fund with pre-tax money that you can use to pay for out-of-pocket health care costs (FSAs give you the added flexibility to use your saved funds for things like childcare). These can help you save on taxes while helping to pay for maternity expenses such as breastfeeding supplies (breast pads, nipple guards, nursing bras, breast pump), prenatal vitamins, and so on. Note that there is one key difference between HSAs and FSAs: You can roll over unused HSA money to the next year, but unused FSA money may be lost.2,3 So, you shouldn’t fund an FSA with more than you think you’ll need that year, but you don’t have to worry about overfunding an HSA.
There’s nothing more important than bringing a new child into the world. With a little financial planning ahead of time, you may be able to focus more on your baby – and make the most of a special time in your life.