Bringing a new baby to a love nest is an exciting time, but can also cause young couples financial concerns. Taking time off from work can mean a loss of income for your family. This is where short-term disability insurance can help. It may protect your financial nest egg by replacing a portion of your lost income.
Pregnancy Discrimination Act
Pregnant women are protected by several laws, including the Pregnancy Discrimination Act. It requires employers with 15 or more workers to treat pregnant women the same as other employees regarding their inability to perform work. This means any employer offering short-term disability insurance must treat pregnancy-related leave as it would treat any other short-term medical leave.
There is no uniform short-term disability plan among employers. Most plans replace lost income during maternity leave at a percentage of a worker's regular wages. For example, an average short-term disability plan may pay 60 percent of a worker's salary while on maternity leave. The plan may also reduce the benefit by the same amount earned if the employee returns to work on a part-time schedule. Ask your employer for the plan details well before you need to use the benefits.
Don't count on your short-term disability plan kicking in immediately. These plans normally have a waiting period and come with a few conditions. Employees may be expected to exhaust all other leave, such as vacation and sick leave, before the plan will pay anything. Additionally, don't be surprised if your plan doesn't kick in until it is almost time to return to work -- the waiting period could be as long as 30 days. You may only be able to collect a couple of weeks of benefits.
Expect to file a claim directly with the short-term disability provider. You'll need to complete an application and give the insurer documentation such as a statement from you, your employer and attending physician. You may also need to send in a signed information release form. Because these benefits are usually paid directly to you from the insurance company, it may affect other payroll-deducted benefits such as how you pay your health insurance premiums or retirement contributions. Ask your HR department about this before filing your claim so you can make payments directly, if needed, to avoid losing those other benefits.
- National Conference of State Legislatures: State Pregnancy, Childbirth and Adoption Leave Statutes
- Patient Advocate Fund: Your Guide to the Disability Process
- American Pregnancy Association: Maternity Leave
- Vanderbilt University-Human Resources: Short-term Disability Insurance
- Charleston Area Medical Center: Filing a Shirt-Term Disability Claim Frequently Asked Questions
- Photodisc/Photodisc/Getty Images
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