Buying a Short-Term Disability Policy for Pregnancy

If you're planning a pregnancy, short-term disability insurance can replace a portion of your income when you need to stop working—whether for bed rest in late pregnancy, pregnancy complications, childbirth, or postpartum recovery. Short-term disability insurance policies typically pay around two-thirds of your wages, and benefits are tax-free if you pay for the policy yourself. The most critical thing to know upfront: you generally must purchase coverage before you become pregnant, since most insurers treat pregnancy as a preexisting condition and exclude it for up to a year after purchase.

Depending on where you live, you may already have access to state-sponsored short-term disability leave or paid family and medical leave. Read on to learn what private short-term disability coverage costs, how long it lasts, and how to time your purchase to make sure you're actually covered when it matters most.

Do You Need to Buy Short-Term Disability Insurance for Your Pregnancy?

Whether you need to buy short-term disability insurance for pregnancy depends on what coverage you already have. You may already be covered through a state program or your employer—and if so, you probably don't need to buy your own policy.

Five states provide short-term disability benefits that cover pregnancy: California, New York, New Jersey, Rhode Island, and Hawaii. All of these states, except for Hawaii, also offer paid family leave. And a growing number of states have started to offer paid medical leave (including Colorado, Connecticut, D.C., Delaware, Maine, Massachusetts, Minnesota, Oregon, and Washington). The paid medical leave programs in these states operate similarly to the short-term disability programs, but generally offer fewer weeks of leave.

You might also have short-term disability insurance coverage if your employer provides you with a group short-term disability insurance policy.

If none of those options are available to you, you can get short-term disability for pregnancy by buying your own policy through an insurance provider. Below we'll discuss how to buy short-term disability insurance that covers pregnancy and how it works.

The Cost of an Individual Short-Term Disability Insurance Policy

Premiums for a short-term disability insurance policy aren't cheap. But it can make sense to get this insurance 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 insurance policies generally pay 50% to 75% 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.

How Long Does Short-Term Disability Coverage Last for 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 disability benefits. You’ll typically need a note from your doctor stating that it’s medically necessary that you stay home or in the hospital.

When to Purchase Short-Term Disability Coverage for Pregnancy

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. 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. It’s common for short-term disability insurance plans to exclude preexisting conditions like pregnancy for as long as a year.

So 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. If you buy a policy while you're pregnant, your maternity leave won’t be covered. And you might not be able to get benefits if you become pregnant during the nine-month or one-year exclusion period. But your insurance would still cover a disability that’s not related to your pregnancy.

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.

If you're 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 postpartum depression—even if you were already pregnant when you bought the insurance.

Disability insurance 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.

How to Get Short-Term Disability Approved While Pregnant

To get short-term disability insurance approved for your pregnancy leave, you'll need to file a disability claim with the insurance company and submit medical documentation. Individual policies typically require more medical evidence than group plans.

Ask your OB-GYN or midwife for a physician's statement confirming your due date, a description of the physical restrictions required by your condition (like an inability to sit, stand, or lift more than 20 pounds), and how long you will be unable to work. For pregnancy complications like gestational diabetes, preeclampsia, hyperemesis gravidarum, and bed rest orders, your doctor will need to document the specific condition, its onset date, and how it keeps you from working.

Don't wait until your due date to begin the claim process. Most insurers allow you to file a claim up to four weeks before your planned disability start date. Filing early gives the insurer time to review your claim before you need to start your maternity leave.

Other Ways to Prepare Financially for Pregnancy and Maternity Leave

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 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 about getting Medicaid while you're pregnant. And don't forget to add your baby to the policy right after the baby is born.

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 and 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), as long as you work for a covered employer and are eligible for FMLA leave. 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.