Understanding Short Term Disability Maternity Claims

Last week, I had a good conversation with one of our client’s employees.  She’s having a baby in December, and she wanted to know how her group short term disability (STD) plan would work.  She asked if she could receive STD benefits for the full 12 weeks that she was planning to be away from work.

This question comes up fairly often, and I think it’s really important to set accurate and realistic expectations for potential disability claimants.  The following is a summary of the email I sent to her.

Disability insurance policies pay people for lost income due to disabilities.  The contracts define disability as the inability to do your own job due to injury or sickness.  Maternity claims, in STD policies, are treated as a sickness.  Once employees are physically well enough to return to work, the disability claim payments stop, regardless of whether or not the insured individual chooses to return to work.  Once someone is physically able to return to work, they are no longer considered disabled.

The insurance industry has paid millions of STD claims for childbirth.  In fact, it’s the most common STD claim.  Experience with millions of claims has led the industry to develop an expectation of how long the mother is considered disabled in the absence of complications.  This standard is 6 weeks for most insurance companies.  Some insurance companies extend it to 8 weeks for a C-section, but this is less common than it was years ago.

The 6 weeks of disability includes the elimination period.  If the elimination period for a sickness in the STD contract is 1 week, and the expected duration of a maternity claim is 6 weeks, most insurance companies will pay STD benefits for 5 weeks if there are no complications.

Short term disability is different than family medical leave.  Both FMLA and state family leave laws look at longer durations for maternity leave than disability contracts.  These laws define the legislated duration for a specific event without regard to the physical ability to return to work.  As such, leave laws and disability insurance are very different.

For this individual, I ended up connecting her with one of the STD claims analysts at the insurance company so she could ask some follow up questions and be sure she understood how the process would work.  She’s now better informed, and she has a clear expectation about how long the STD plan will pay.

If you’d like to chat about disability insurance, claims processing, or any other topic related to employee benefits, feel free to call us at (866) 724-0008 or click the link below.


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