It seems that many people are asking, “Does short-term disability count as paid family leave?” There are situations when it does count, and circumstances where it does not count. The complete answer is layered like an onion.
The answer depends on the state where the person works, who needs to stop working and the reason for the work absence. Some may be asking, “Am I covered for family leave” while others may be asking, “Does it eat into my paid leave time?”
- It counts when an employee’s own medical condition is covered
- It does not count if you do not have a policy
- It does not count when caring for sick family member
Short Term Disability Insurance
Short-term disability insurance counts as paid family leave when the employee covered by the policy stops working because of a covered medical condition. For many employees, this is the only form of paid maternity leave available. There are two parts of that statement that call for a more detailed response: employee covered by the policy, and covered medical condition.
Employee Covered by Policy
An employee’s own illness or injury is the most common form of paid family leave. That is what short-term disability covers. Policies replace a portion of income in the event that the employee is unable to work because of a future accident or illness. Spouses and dependent children are rarely included in the policy coverage.
When a covered employee needs to stop working, short-term disability counts as paid family leave. Claims are paid by the policy during the time the employee is unable to perform his or her primary job duties. The most common example occurs when women stop working while recovering from childbirth.
Covered Medical Condition
There are two caveats regarding any insurance program. You must purchase the coverage before the need arises – before getting sick, hurt, or pregnant. In addition, many conditions are not automatically covered. The coverage will not count as paid family leave if the employee is not receiving claims payments.
Most policies will contain exclusions for preexisting conditions. The most common question we see asked is, “Can I purchase coverage when already pregnant?” The short answer is yes you can, but do not expect to enjoy paid family leave benefits. Pre-existing conditions are not covered during the first twelve months of the policy effective date.
The second most common question we hear comes from women eager to purchase an individual policy covering normal childbirth. They understand the need to purchase prior to conception, but their employer does not offer an option. Individual policies sold direct do not cover normal childbirth, so we have to direct them back to their employer to ask for a voluntary program they would pay for themselves.
Paid Family Leave Programs
There is one reason explaining when short-term disability does not count as paid family leave, but several possible results. It covers the policyholder when he is she is unable to work due to a covered medical condition. New or expectant fathers are physically able to work, and therefore do not qualify. Most dependent children are not working and earning an income.
Three states have mandatory paid family leave programs in place for most private employees. Those states are California, New Jersey, and Rhode Island. The distinguishing feature of these programs is that the income replacement is available to care for a sick or injured family member. Each state defines family members and may include spouses, immediate parents, biological children, plus adopted and foster children.
Each of these state programs includes both temporary disability and paid family leave. For workers in these states, the word “count” may mean something different. They may be asking whether the time spent collecting claims payments, is subtracted from the subsequent program.
Which Program Counts
During the time that the employee is unable to work, the benefits are paid from the short-term disability program to the employee. At the same time, the employee’s spouse may be able to tap into the state paid family leave programs to care for his or her spouse. One does not count against the other.
After childbirth, a mother may need time to recover physically. Short-term disability covers during this period, even though she may be caring for her infant during her recovery. After recovery, she then has an option to extend her time away from work for baby bonding benefits. The benefits paid earlier do not count against her paid family leave benefits for baby bonding time.
When a dependent needs care at home, only paid family leave applies. Each parent may utilize this entitlement separately or together.
Twenty-two states modernized their unemployment compensation programs such that they may work like a paid family leave program. Benefits may be payable if an employee leaves work for a “compelling reason” and the employer is unable or unwilling to make reasonable accommodations. Check your state laws for further information.
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