A common reader question is “Does short-term disability insurance cover family members and/or their caregiver?”
The complete answer lies somewhere between maybe and probably not. It all depends on whom the policy covers, the state where you work, and which family member.
State-based paid family leave programs offer income benefits in only four states. FMLA applies across the country but does not replace wages. It protects your job while on leave from work.
Private policies usually cover only one person, rather than the entire household, and never the caregiver. You may need to explore several alternatives to afford this time away from the job.
Short-Term Disability for Spouses
Short-term disability insurance covers spouses when he or she is the insured individual. A private policy pertains to one person only. Unlike other types of insurance programs, you do not choose between plans covering husband/wife, single parent, or the entire family.
Insurers base the monthly premiums on the level of income they need to replace and the occupation of the person they are covering. Since everyone’s earnings and job role differ, you cannot buy a plan for two or more people.
Care of Spouse
Short-term disability does not cover the care of your spouse. It only pays benefits to the policyholder who is unable to work because of a qualifying medical condition – an illness, injury, or surgery that prevents that person from performing the duties of his or her full-time occupation.
The caregiver is still physically able to work.
Purchase an individual policy for your spouse before he or she has an accident or illness. It is important to protect both wage earners in a two-income family. This way, when one spouse needs to care for the other, you have a least one policy paying benefits.
Private short-term disability indirectly covers child support if your former spouse is the insured person, and he or she becomes unable to work because of a covered medical condition. The policy would make claims payments directly to the ex-spouse, which enables him or her to continue making child support payments.
Keep in mind that nothing compels your ex-spouse to assign a portion of the claims payments towards the child support obligation. You may need help from a lawyer. Expect that he or she may seek to modify the order because the policy replaces only a portion of income – not the full amount.
Short-Term Disability Dependent Care
Short-term disability insurance does not cover any form of dependent care (paternity leave, adoption leave, baby bonding, care of a sick child, or an elderly parent) – unless the dependent was working and has coverage in force.
State paid family leave laws exist in six states (California, New Jersey, New York, and Rhode Island). These state programs provide benefits for the care of dependents.
Expectant or new fathers cannot use short-term disability for paternity leave. Dads simply do not have a qualifying medical condition. Men do not become pregnant and give birth to his children. He remains physically able to work and earn a living.
Lost income is still a very big problem for fathers taking paternity leave. Often, both mom and dad stopped working before and after their baby is born.
Short-term disability does not cover adoption leave. With adoption, both parents remain physically able to perform the duties of their full-time occupation. Neither became pregnant or gave birth to a baby.
However, the birth mother could qualify to file a claim during an adoption. Her normal childbirth is a qualifying condition for coverage bought at work – if she has a policy that she purchased prior to conception.
Short-term disability may cover baby-bonding time indirectly for mothers but not for fathers. As discussed above, new dads remain physically able to work. They cannot file a claim for benefits.
However, childbirth is often a covered medical condition for new mothers. The policy pays a 6-week benefit for vaginal delivery and an 8-benefit for a C-section birth. Moms can enjoy income replacement while bonding with her baby while she also recovers from labor and delivery.
Short-term disability will never cover the care of a sick child for two primary reasons. FMLA provides job-protections for the care of a sick child but does not replace lost income.
- Minor children do not have coverage. They do not qualify to purchase a policy. You must be at least 18 years old to complete an application and enroll in a program.
- Minor children do not have full-time jobs. You must be working and earning money in order to qualify to buy a policy and file a claim for benefits.
Short-term disability may cover the care of an elderly parent indirectly. In this case, the caregiver remains physically able to perform the duties of his or her full-time occupation. However, the parent requiring care might have might have a qualifying condition.
File a claim to care for an elderly parent if he or she needed to stop working and had coverage in force privately or through the state. The insurance company would pay the benefit to your parent to compensate him or her for loss of income. Of course, this only works for parents who have yet to reach retirement age.