If a mother does not use the benefits of short term disability for maternity leave, then she may face a dire economic situation as she recovers from pregnancy and tends to her newborn child. Her situation will ultimately depend upon the state in which she lives and the company for which she works. While the Family and Medical Leave Act is available around the country to employees of companies of sufficient size, this unpaid leave is the last resort for many who actually qualify for it. If a woman is not eligible for this federal plan and her company does not offer maternity leave, then using short-term disability insurance may be the best option.
What Is Maternity Leave?
Maternity leave is a benefit offered by some companies to their female employees. This sort of leave is not required by many states so there are few regulations surrounding the details of such a plan. Each company determines just how much leave will be offered, to whom and for how long. The amount of pay provided during this indefinite time period is also determined by each company. In some cases, this may simply be unpaid leave with a guaranteed job when the woman returns to work.
Many companies in the United States include maternity leave in the benefits they provide for their employees. The usual amount of leave offered is six weeks. However, the most common version of this leave presently is unpaid leave.
Women who are thinking about getting pregnant should determine if they are eligible for maternity leave under their employer’s present policy. They also need to verify ahead of time what the financial impact of using maternity leave will be and what they will do if they need more time off due to labor complications or the child’s illness. In some cases, there may be other options with better ramifications for mother and child.
What Is the Family and Medical Leave Act?
If a woman is dissatisfied with the options available to her under the maternity leave policy of her company, she may very well be able to invoke the Family and Medical Leave Act, a federal policy which requires companies of certain sizes to offer as many as 12 weeks of unpaid leave for parents who need to handle the birth of a new child in their home. Women who do not work for employers of sufficient size are not eligible for this leave.
What Is Short-Term Disability Leave?
Those women who do not qualify for other forms of leave, and even those who do, may want to use the benefits of short term disability for maternity leave. Short-term disability insurance is often provided by the same employers who provide maternity leave and qualify for the Family and Medical Leave Act. Unlike maternity leave and the benefits of the FMLA, the leave acquired under short-term disability insurance policies offers a significant portion of the employee’s salary and for as long as 26 weeks. This duration outmatches anything provided by any other option.
The amount paid out by short-term disability insurance differs from policy to policy. It may even differ between employees. On average, qualifying employees will receive anywhere from 50% to 75% of their weekly salary for as long as the benefits last. There may be an upper limit on how much this can be. The percentage may increase as the employee works longer for the company. Some policies pay a larger percentage for the first weeks of disability and a reduced percentage for the time thereafter.
Leave acquired under short-term disability is an intermediate step between using sick leave and qualifying for long-term disability. While the former usually only covers one or two weeks in a year, the latter may only be usable for employees who are unfit for work for periods as long as several years. This is why using short-term disability benefits as a form of maternity leave is perfect for many mothers who need several months off but do not qualify as long-term disabled due to their pregnancy.
How Much Does It Cost?
Short-term disability insurance may not cost the employee anything, or the costs may be indirect. Of all the employers who offer this sort of coverage, there are many who pay for it themselves. They contract an insurance company and pay monthly premiums of each qualifying employee. If a claim is made and determined to be eligible, the insurance company pays for its implementation.
In other companies, the premiums for the plans are paid with portions of each employee paycheck. While there are not any regulated prices and each insurance company may have different rates, the average qualifying employee pays somewhere between one and three percent of his or her annual salary for this disability insurance. This money is extracted from each paycheck on a pre-tax basis. Therefore, the employee does not pay taxes on these earnings because they never have the chance to use them as income.
In some states, the state government requires this sort of coverage and also pays for it. However, the policies are funded through payroll taxes, so the employee still pays for the service in an indirect fashion. In these cases, the plan is inexpensive for both employee and employer.
How Do You Become Eligible?
You become eligible for this sort of policy by working for a company for a specific period of time in a particular capacity. This means that a company may only offer such coverage to employees who have worked for it for a minimum time period. A common rule is that employees qualify after one year of employment. Companies do not usually offer this to everyone who works for them. It may only apply to a select group of employees within the business.
How Do You Qualify For Benefits?
You can qualify to receive the benefits from such an insurance policy in a number of ways. Many businesses require employees to use up all their sick days while they complete any paperwork necessary for the implementation of this policy. A doctor’s note may be necessary to affirm that the employee cannot work in any capacity for a certain period of time. Sometimes short-term disability is used up first, even if it is apparent that an employee will eventually need to transition to a long-term disability plan due to the gravity of his or her illness or injury.
Why Should Women Use Short-Term Disability as a Form of Maternity Leave?
Using short term disability for maternity leave may be the ideal option for women who have the chance to qualify for these benefits. They can receive a significant portion of their pay, just as if they were working part-time at the same job, while they stay at home to care for their child and recover from pregnancy and labor. There is not threat of job loss because short-term disability benefits carry the same guarantee of job-protection that other leave benefits provide.