More than 2.3-million Canadians took a leave of absence from work for the birth or adoption of a child between 2012 and 2017 according to Statistics Canada. But research shows as many as 20% of pregnant women may be prescribed bed rest during their pregnancy, preventing them from being able to work.
If you can’t work because of an illness or injury, short-term disability insurance helps ensure your paycheque isn’t disrupted. But does this coverage apply to pregnancy and maternity leave? Let’s investigate.
What is short-term disability insurance?
What happens if you get sick or injured and can’t work? While your employer does have to hold your job and accommodate you to the best of their ability, they don’t have to pay you during your time off.
Short-term disability insurance helps reduce this financial risk by replacing some or all of your income if you can’t work due to an illness or injury. Short-term disability plans provide temporary benefits ranging from 15 to 52 weeks.
Most Canadians with coverage are insured through their employer’s benefits package, although you can purchase your own disability insurance plan to get coverage or augment another policy.
What does short-term disability insurance cover?
Short-term disability insurance covers injuries and illnesses that prevent you from being able to work. To be eligible for a short-term disability claim, you will need to meet a few criteria:
Your illness or injury must not be caused by your job. If you’re injured at work, or contract an illness caused by your working conditions, short-term disability insurance doesn’t apply. In these cases, you may be able to make a claim through your province’s workers’ compensation service.
You must receive treatment for your illness or injury. Your short-term disability plan will only pay out if you’re working with your doctor to treat or manage your disability.
Your disability must prevent you from performing the duties of your job. Many injuries and illnesses can be accommodated and don’t necessarily require time off work. For example, you may be able to return to modified duties while recovering from a broken bone.
Your absence must not be for the purpose of rest. This is the difference between “my doctor wants me to take time off work,” and “I’m physically unable to do my job.” Insurance companies will only approve your claim if your disability prevents you from doing your job.
Does short-term disability insurance cover pregnancy?
Ordinarily, pregnancy is not covered by short-term disability insurance. While it can be uncomfortable to work while pregnant, your employer has a legal obligation to provide you with the necessary accommodations. According to the Human Rights Commission of Newfoundland and Labrador, there are extremely limited circumstances when an employer would meet the legal threshold to refuse to accommodate you during pregnancy.
In some circumstances, however, your pregnancy may meet the criteria of a short-term disability. If you are experiencing complications which prevent you from being able to work, even with accommodations, then short-term disability insurance may kick in.
For example, if you are diagnosed with hyperemesis gravidarum (the fancy doctor term for severe morning sickness), you may not be able to do any job. In this case, short-term disability would cover you for as long as your symptoms prevent you from working.
In other words, pregnancy itself doesn’t meet the threshold for short-term disability but you may qualify if complications of pregnancy prevent you from working.
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Does long-term disability insurance cover pregnancy?
There’s no difference in how long-term and short-term plans define disability. The difference is in the level of coverage and how the policy is administered.
Long-term disability insurance kicks in after you’ve used up all your other benefits, including short-term disability. If your short-term disability coverage runs out before you’re able to return to work or transition to maternity/parental leave, your long-term disability plan will take over.
When you transition from a short-term disability claim to a long-term one, you may see a change in the benefits you receive. Whereas short-term disability claims are usually paid to your employer (who, in turn, continues processing your payroll), long-term claims are paid directly by your insurance company. You may also see a reduction in the amount of benefits you receive, and you may lose access to other benefits your employer provides.
Do I need disability insurance while I’m on maternity leave?
If you get sick or injured during your maternity leave and aren’t able to return to work, long-term disability insurance can take over when your maternity/parental benefits run out.
When you go on maternity leave, your employer may give you the option to continue paying into your benefits plan to receive coverage while you’re off. Long-term disability coverage may be optional during your leave, or coverage may be suspended until you return to work. If your benefits plan doesn’t offer long-term disability insurance during your maternity leave, consider getting a personal disability insurance plan to make sure you’re covered.
What do I need to consider before purchasing disability insurance for maternity leave?
If you’re planning to get a disability insurance policy to cover your maternity/parental leave, you will want to find the right balance of cost and benefits for your needs. Before purchasing a plan, consider:
Your existing coverage. Even while on maternity leave, you may have disability coverage through your employer’s or partner’s benefits plan. You can ask your benefits administrator for details about what coverage you do and don’t have.
How much coverage you need. Most disability insurance plans pay either a defined benefit (e.g., $1,500 per month) or a percentage of your regular income before tax. The more coverage you select, the higher your premium will be.
The length of benefits you need. If you become disabled and need to make a claim, your plan will pay out for a prescribed period of time which could be as little as 2 years or as long as until you reach retirement age.
The waiting period to receive benefits. Similar to the deductible on your car insurance policy, your disability insurance policy will have a waiting period (e.g., 90 days). Choosing a longer waiting period will reduce your premiums.
Whether a medical exam is required. Some disability policies require a medical examination to ensure you’re in good health when you enroll. A typical insurance medical exam includes a questionnaire, a blood pressure test and a blood test. While medical exams are annoying, you will likely get better coverage and pay less in premiums if your policy includes an exam.
The cost of disability insurance varies widely among providers. Compare disability insurance quotes online to ensure you’re getting the best price for the coverage you need.
The bottom line
Pregnancy itself is not a disability, but complications from pregnancy and childbirth can cause a disability to occur. Make sure you have the short-term and long-term disability coverage you need to protect your income while you’re pregnant and on maternity leave.