Short-term disability insurance (SDI) replaces some of your wages when you're unable to work due to a temporary disability. Most SDI policies also cover time off work for pregnancy and childbirth. This coverage can offer some income if you have to miss work due to any of the following:
Some states provide short-term disability benefits that cover pregnancy (including California, New York, New Jersey, Rhode Island, and Hawaii). Other states only offer paid family leave (Colorado, Connecticut, D.C, Delaware, Maryland, Massachusetts, Oregon, and Washington). You might also have coverage if your employer provides you with group short-term disability insurance.
If none of those options are available to you, you can still get short-term disability for pregnancy by buying your own policy through an insurance provider. This article will review how to buy short-term disability insurance that covers pregnancy and how it works.
Premiums for a short-term disability policy aren't cheap. But it can make sense to get this coverage for a planned pregnancy. Otherwise, you risk losing weeks or months of pay if you experience pregnancy complications or miss work due to childbirth.
Short-term disability policies generally pay up to two-thirds of your income. And if you pay for your own disability insurance, the benefits aren't taxable.
You can expect to pay around $50 to $100 per month for an individual short-term disability policy that provides about $3,000 to $5,000 a month in benefits while you're off work. When purchasing private short-term disability insurance, be sure to ask whether it covers pregnancy.
Before you buy short-term disability insurance, investigate what exactly the policy covers in terms of pregnancy benefits. For example, if you're on bed rest due to pregnancy complications for three months before your due date, will your coverage kick in so that you get a portion of your income during that time?
Also, find out how many weeks of benefits you'll get after childbirth to allow you to heal and spend time with your new baby. Many policies cover you for six weeks after childbirth and eight weeks after a C-section, since you'd need more time to heal after surgery.
You might also be able to get your benefits extended after childbirth. If you have a postpartum disorder (including depression) or childbirth complications that leave you unable to work for more than six to eight weeks afterward, you should be able to get extended SDI benefits. You'll typically need a note from your doctor stating that it's medically necessary that you stay home or in the hospital.
In most cases, you have to sign up for short-term disability insurance before you become pregnant—if you want the coverage to extend through your pregnancy and maternity leave. Insurance companies that sell short-term disability policies generally exclude preexisting conditions, and that would include pregnancy. So, if you buy a policy while you're pregnant, your maternity leave won't be covered. If you are pregnant when you sign up for short-term disability, you can still be covered for unexpected illnesses or accidents unrelated to your pregnancy. And some policies will cover mental health issues like post-partum depression—even if you were already pregnant when you bought the insurance.
The best time to buy short-term disability coverage is several months before you become pregnant. Policies often exclude pregnancy-related medical leave for nine months after the policy is purchased, and you want a buffer in case you are put on bed rest in your seventh month or you have your baby three weeks early.
When you get short-term disability insurance through your employer, you're buying into a group plan. Because employer plans cover many employees at once, they don't require you to answer health questions or have a medical exam, which makes enrolling in this type of short-term disability insurance plan simple, even if you're pregnant.
But when you buy short-term disability insurance on the open marketplace, you might be required to have a medical exam and answer questions about your health, including whether or not you're pregnant. And it's common for short-term disability insurance plans to exclude pre-existing conditions, like pregnancy, for as long as a year.
When applying for disability coverage during pregnancy, you might be able to buy an SDI policy, but you probably won't be able to get benefits that cover your current pregnancy. And you might not be able to get benefits if you become pregnant during the exclusion period. But your SDI would still cover a disability that's not related to your pregnancy.
SDI can provide real financial help during pregnancy and childbirth. But if you're going to buy short-term disability insurance to cover pregnancy, you'll want to buy it well in advance. And be sure you know when the policy's pregnancy coverage begins.
When you're pregnant, there's a lot to do to get ready for your new baby—setting up a nursery, buying adorable baby things, and making sure you're financially ready for your new arrival. Besides getting short-term disability insurance set up to cover your pregnancy and childbirth, there are other things you can do to prepare financially for maternity leave.
Start by building up your savings. You might already be investing in your company's retirement plan or your own IRA. That kind of long-term savings is important for your future, but you also need a short-term fund. Since you know you'll be missing work when your baby arrives, it just makes sense to add a little extra every payday to your short-term savings too.
Save up your vacation, personal days, or other paid time off (PTO). Even if you have short-term disability insurance to cover your pregnancy, it might take a few weeks before you start receiving benefits. Having 10 or 20 days of earned time off (ETO) or paid time off (PTO) saved up will ensure you have enough income to cover the gap.
Make sure you have medical coverage in place. Having a baby in a hospital can be expensive, especially if there are any complications. Whether you get medical insurance through your employer, on the open marketplace, or through the federal health insurance exchange (healthcare.gov), review your policy so you know what's covered. If you don't have that type of coverage, find out how to get Medicaid while you're pregnant.
Ask if your employer offers other benefits for new parents. Some companies offer special benefits like extra paid time off when you're going to have a baby. Others will allow new moms (or dads) to work from home for a few weeks after the typical six- to eight-week recovery period has ended.
Know your rights. The federal Family Medical Leave Act (FMLA) ensures that you can take off the time you need for pregnancy and childbirth, and bond with your new baby (up to 12 weeks per year). But it doesn't require your employer to pay you during that leave. Having short-term disability insurance in place well ahead of your pregnancy will help you pay your bills so you can focus on taking care of yourself and your new family member.
If you feel you've been wrongly denied short-term disability insurance benefits, or if you've been discriminated against at work because of pregnancy, you might benefit from talking with an attorney.
Updated October 27, 2022
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