Who needs disability insurance?
Starting a new family is exciting—and scary. It’s not just the new responsibilities that becoming a mother entails. There is also the financial reality of not working for three months or more after you give birth.
Although some employers have generous paid maternity/parental leave programs, this is not always the case. And maternity/parental leave doesn’t always provide time to deal with an extended inability to work.
This is why it’s important to understand your options.
Many new mothers use a combination of company maternity/parental leave, accrued paid time off, short-term disability, and FMLA during the course of their leave.
Here’s how to navigate these income replacement options to design a leave which meets your needs.
Employer Maternity/Parental Leave
If you are a full-time employee, your first step is to review your employer’s maternity/parental leave policy. It will detail how much time off work is covered. Additionally, it will detail what other paid time off may be used to extend the leave.
When you begin planning your leave, follow the process outlined in your employer’s maternity/parental leave policy. If they do not have a formal maternity/parental leave policy, speak with your manager.
Under the Pregnancy Discrimination Act and Family Medical Leave Act, you are eligible to take time away from work. However, your employer may not be obligated to pay you during that time off.
Paid Time Off (PTO)
Some employers may require employees to use several weeks of PTO before they start to receive benefits. Others provide benefits immediately and allow you to use PTO to extend your leave. Make sure you understand your employer’s policy before you take your leave.
Short-Term Disability Insurance
Maternity leave is the most common reason for short-term disability claims. Short-term disability insurance replaces part of your income for six to eight weeks, depending on the type of delivery. After that, any remaining time away from work is covered by unpaid FMLA leave.
Family Medical Leave Act (FMLA)
Under FMLA, an eligible employee can take up to 12 weeks of unpaid, job-protected leave.
FMLA coverage applies to giving birth, a child’s adoption, or a child’s foster care. It also applies to caring for a child, spouse, or parent with a serious health condition, among other situations.
Many workers are unaware it also applies to convalescence after their own serious health condition.
Workers are not eligible for FMLA coverage until they have worked for the same employer for 12 months. They also must have worked at least 1,250 hours leading up to the leave.
Additionally, not all companies must comply with FMLA. FMLA applies only if you work at a company with more than 50 employees within 75 miles of your workplace.
Several states—including California and New Jersey—have state-mandated paid family leave insurance programs. Under California’s program, new parents can receive 55 percent of their income, up to a weekly capped amount, for up to six weeks.
Maternity/parental leave rules vary widely by employer and by state. Many states have longer leaves (up to 16 weeks) and lower minimum employer size. Talk to your human resources manager to find out what your resources are at both an employer and state level.
Having your finances in place well in advance of your maternity/parental leave will allow you to enjoy this time with your new family member.
About Council for Disability Awareness
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