Does Short Term Disability Insurance Cover Maternity Leave?

By Elsie Boskamp
Aug. 23, 2022
Articles In Life At Work Guide

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Starting or growing your family is one of the most exciting times of your life, but it can also be one of the most costly. Luckily, there are plenty of reliable ways to access and enjoy paid family leave benefits and other financial support services during maternity leave.

If you’re getting ready to welcome your little bundle of joy into the world, you might want to consider using short-term disability insurance as a way of replacing any lost income from missing work due to childbirth and maternity leave.

Key Takeaways:

  • Short term disability can cover maternity in most cases, however it depends on the state you live in and your company’s policy.

  • Short term disability replaces lost income during periods due to certain injuries, illness, or medical situations, such as childbirth.

  • Short term disability replaces between 40% and 80% of lost income for 6 to 12 weeks, though this can vary.

  • Talk to your human resources representative if you want to use short term disability to cover maternity leave.

  • The Family and Medical Leave Act (FMLA) is a federal program available to most working Americans gives up to 12 weeks of unpaid, job-protected leave every year.

Does Short Term Disability Insurance Cover Maternity Leave?

What Is Short Term Disability Insurance?

Short-term disability often referred to simply as STD, is an insurance option most states and employers provide working professionals as a means of replacing lost income during periods where they miss work due to injury, illness, or childbirth.

Short-term disability insurance is typically only available for employees who are unable to perform their job due to a health issue that requires a temporary leave of absence from their place of work. The benefits program differs from other federal laws, like the Family and Medical Leave Act, and usually allows employees to continue collecting about ⅔ of their regular salary.

Generally, short-term disability insurance pays eligible employees a weekly benefit for a specified amount of time. Depending on where you work and what state you live in, short-term disability benefits can be used for nine to 52 weeks. However, the coverage is most typically used for six to 12 week periods.

How to Use Short Term Disability for Maternity Leave Coverage

If short-term disability insurance is available to you during your maternity or parental leave, taking advantage of the benefits could be especially useful as they often provide financial support in addition to time off work to care for a newborn and get acclimated into your new family life.

Here are five simple steps you can take to use short term disability insurance for maternity leave coverage:

  1. Talk to your human resources representative. The very first step of planning your maternity leave and using short-term disability insurance is notifying your human resources manager and your direct supervisor.

    Scheduling an appointment with a human resources representative at your office and discussing your options and eligibility for short-term disability insurance is a great way of starting a discussion with your employer regarding your maternity leave.

  2. Check your employer benefits package. If you’re planning on using short-term disability insurance, either through your employer or your state, to cover your maternity leave, it’s essential to review your insurance package and thoroughly understand all of your benefits.

    Typically, short-term disability insurance differs slightly from state to state and from employer to employer. It’s essential to research the elimination period, benefit period, and benefit amount that correlates with the short-term disability plan you’re eligible for.

  3. Discuss a budget and game plan with your partner. Budgeting is important when you take advantage of the benefits included in short-term disability insurance or the Family and Medical Leave Act.

    Just as it is essential to apply for short-term disability long before you give birth or begin your maternity leave, it is also vital that you discuss a budget with your partner prior to applying for STD. Proper budgeting will ensure that you maintain financial stability for the duration of your leave of absence for maternity and parental leave.

  4. File any necessary paperwork. Short-term disability coverage usually kicks in immediately after a child is born, with financial support starting after the expiration of a predetermined elimination period.

    However, you will still need to file important paperwork prior to beginning your leave of absence and taking advantage of short-term disability insurance.

    In order to take advantage of short-term disability benefits, you’ll likely need to file a claim form, which you can usually get from your Human Resources department at work, directly from the insurance company, or online from the state department.

    After completing your section of the claim form, your employer will need to fill it out, and then your doctor will need to verify your condition and sign the document before you can submit it for approval.

  5. Talk with your boss and coworkers to ensure your job duties will be covered and completed. In the weeks and days before beginning your leave of absence and collecting short-term disability benefits, it may be a good idea to discuss a game plan with your supervisor and direct coworkers.

    Delegating your work to other people in your department or training someone to take over your professional responsibilities will ensure a smooth transition during your maternity leave.

    Knowing that important projects will still be completed on time and your clients won’t be left in the dark will help give you peace of mind while using your short-term disability insurance.

How to Financially Prepare to Use Short Term Disability Insurance

While short-term disability insurance does pay eligible employees a portion of their regular wage, it usually does not cover an employee’s entire salary or hourly rate.

Short-term disability rules vary from state to state and from employer to employer, but across the United States, STD most often covers between 40 and 80 percent of a person’s pay during the entirety of their absence from the workplace.

Short-term disability insurance offers some of the best financial support to new mothers and families after the birth of a child, but because people using STD benefits do not receive their full regular pay, budgeting is still essential to maintaining financial stability.

In addition to careful financial budgeting, short-term disability can also require some planning in order to qualify for the best policy. For example, professionals who take out their own STD policy or elect to participate in optional plans provided by employers must usually buy or enroll in the coverage programs before becoming pregnant.

Understanding Short Term Disability Insurance Rules and Regulations

Using short-term disability insurance can sometimes be complex and confusing, so to help you navigate the benefits package, we’ve rounded up all the rules and regulations you need to understand in order to successfully use the insurance program:

  • Length of employment. Many of the most common regulations included in the majority of short-term disability coverage options deal with eligibility. Typically in order to qualify for short-term disability insurance for maternity leave, a new biological mother must have worked at their place of employment for one to six months prior to giving birth to a child.

  • Elimination period. Once a new mother is deemed eligible for short-term disability insurance, they must go through an elimination period, or a waiting time, in which they will not receive any benefit payments. Elimination period information is usually specified in each short-term disability plan and tends to last a few weeks to a month.

  • PTO. In addition to their elimination period, most employers also require staff to use up all of their paid sick leave before receiving any short-term disability payments.

  • Different options. While short-term disability insurance is most commonly provided by employers — especially those that also offer childcare benefits to their employees — there are also several other ways of enrolling in the benefits plan.

  • If your place of employment offers short-term disability insurance, it will most likely be an optional plan or one that is available to all employees, whether needed or not. Outside of the workplace, however, short-term disability insurance can either be bought through commercial insurance vendors or be acquired if you are covered through a law in your state or jurisdiction.

Who Is Eligible for Short Term Disability Insurance?

Since short-term disability insurance is not a federal program, eligibility for coverage often depends on the state a person is employed in or even their employer themselves.

To take advantage of the benefits included in short-term disability insurance, working professionals must have a doctor’s note and a personal injury, illness, or health issue that they are seeking professional medical attention for.

Short-term disability insurance is primarily meant for people who have an accident, incident, injury, or sickness that prevents them from working and carrying out their professional duties and obligations.

However, debilitating injuries, childbirth, and maternity leave are the most common causes that result in the use of short-term disability insurance. Many policies also cover conditions like postpartum depression and pregnancy-induced hypertension.

What Are FMLA and STD?

If, for some reason, your employer does not offer short-term disability benefits, there are still other options you could use to help financially support yourself and your family during a maternity or parental leave.

When short-term disability coverage is not available to you, the Family and Medical Leave Act, more commonly known as FMLA, is a federal program available to most working Americans that could give you up to 12 weeks of unpaid, job-protected leave every year.

Unlike short-term disability insurance, which offers up to 12 weeks of paid leave, the Family and Medical Leave Act does not offer employee compensation but rather works to offer job security and allows employees to maintain any employer-provided health benefits during their leave of absence.

In other words, when using FMLA benefits, you don’t have to worry about your short-term position being terminated or having to sign any sort of separation agreement.

Employees are eligible for FMLA benefits if they have worked for their employer for 12 months or longer, for at least 1,250 hours, and if they work for a company that employs a minimum of 50 people within 75 miles of the primary work location. Typically, eligibility is determined by reviewing the principles laid out in the Fair Labor Standards Act.

Although there are exemptions to using FMLA — including company size, length of employment, and level of income — most professionals use the Family and Medical Leave Act for the birth and care of a newborn child, to care for a spouse, child, parent, or other immediate family members with a serious health condition, or for an adoption of a child or foster care placement, or for a serious or life-threatening health condition.

As mentioned above, FMLA benefits do not offer any financial support to eligible employees, which is the key difference between short-term disability insurance and the Family and Medical Leave Act.

Since short-term disability insurance pays employees a portion of their wage, often for the entire length of their leave, people using SDI coverage are typically subject to paying income tax on their disability checks.

Short Term Disability and Maternity Leave FAQ

  1. Does short term disability insurance cover maternity leave?

  2. Yes, short term disability insurance can cover maternity leave, however it depends on the polices of your employer and the state you live in. It is very important before a pregnancy to talk to your employer’s human resources department to clarify what is covered. Paid maternity leave may not be guaranteed. Depending on your company you may be covered to take unpaid leave through the Family and Medical Leave Act (FMLA).

  3. What questions should I ask about short term disability?

  4. You should ask very specific questions and receive specific answers. When you want to know about what your company offers for short term disability, do your best to get accurate information. It is helpful to know ahead of time what exactly you want from your short term disability, such as how much will you get paid, how long can you take off, when can you take off, and how will you be taken from and reintroduced to your responsibilities.

  5. Which states require short term disability coverage?

  6. California, Hawaii, New Jersey, New York and Rhode Island, as well as Puerto Rico, require employers to offer short term disability. However, each state has a different approach to this policy. Since their is a lack of uniformity, you should talk to your human resource department before making any assumptions.

Final Thoughts

The benefits provided through short-term disability insurance are among some of the best coverage options and financial supports for expecting mothers and growing families.

If you are eligible to do so, using short-term disability insurance during your maternity or parental leave can be a lucrative and beneficial option for you as it guarantees your job. Also, your employee benefits during your leave maintain at least a portion of your regular salary and give you adequate time to care for a new child.

By following the short-term disability insurance tips and guidelines outlined in this article, you’ll be well on your way to enjoying a stress-free and financially sound maternity leave.

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Elsie Boskamp

Elsie is an experienced writer, reporter, and content creator. As a leader in her field, Elsie is best known for her work as a Reporter for The Southampton Press, but she can also be credited with contributions to Long Island Pulse Magazine and Hamptons Online. She holds a Bachelor of Arts degree in journalism from Stony Brook University and currently resides in Franklin, Tennessee.

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