Preparing for Maternity Leave, Medical Expenses, and Financial Hurdles Postpartum
Whether you are a FTM (first time mom) or not, postpartum is a very exhausting and vulnerable time for new parents. It is important to prepare everything you can before the arrival of your newborn(s). Anything that can be done to ease things during this time is a must!
This post will cover maternity leave, medical and financial planning. Please stay tuned for more in the Navigating Postpartum series to cover other areas of postpartum planning, what to expect during postpartum, and even things you are not told about postpartum. Now, let’s jump into this section.
There are some important arrangements you can make beforehand to maximize time off and income. It is important to plan as much as possible before your actual postpartum period begins, especially when it comes to leave, medical, and finances. Let’s break it down into these sections:
- State parental leave coverage
- What is FMLA and are you covered?
- Company sponsored leave
- Disability policy coverage
- Planning for medical expenses
You can click to jump to a section, but I really recommend stopping at each one!
State parental leave coverage
Parental leave in the United States is often not straightforward. Unlike other countries, the US does not have any kind of federal coverage for having babies. Without national coverage, this falls to the states to individually allocate and pass laws. Most states do not cover parental leave; if they do, there is often no financial compensation.
For a list of which states do have coverage, and what that coverage entails, check out this great resource from NCSL.
If you do not see any coverage under the state where you reside, don’t panic! There are still a few other areas that may cover paid or unpaid time off. The first and broadest would be FMLA.
What is FMLA and are you covered?
The Family Medical Leave Act, better known as FMLA, is a federally enforced act for eligible employees that covers leave for a variety of reasons related to medical and family reasons. Under the act, the right to take time off is protected, but it does not award any financial compensation. It does allow for job-protected leave with continuation of group health insurance under the same terms and conditions as if the employee had not taken leave. It does not apply to everyone.
In order to utilize FMLA, you must meet the following criteria:
- Your employer must be covered under FMLA
- You must have worked 1,250 hours during the 12 months prior to the start of leave (this is just over an average of 24 hours per week)
- You must work at a location where there are 50 or more employees working at that location or within 75 miles of it
- You must have worked for the employer for at least 12 months
If you are eligible, you are entitled to twelve work weeks of leave in a 12-month period for the birth of a child and to care for the newborn in the first year. This is great for job security but it does not cover the loss of income. This may sound scary but there are still other ways you may qualify for financial compensation and/or more time off, like under your employer or a disability policy.
For additional information on FMLA, if you qualify, here is a link to the Department of Labor’s FAQ.
Company Sponsored Leave
How do you know if you have a company policy? A lot of times these will be specified in your initial benefits package or employee handbook. The first thing you will want to do is locate these documents and try and determine what kind of coverage you may have if any. If you can not find information here it is best to reach out to your HR department to inquire.
If you plan to utilize a company policy, you will want to read the fine print and speak with your HR department or employer as soon as possible. These policies can vary greatly from company to company and you can’t plan until you have the specifics of yours. It is very common for the employer to expect you to exhaust all of your PTO prior to any additional leave. Some companies will also pay a reduced wage, or offer extended time at a reduced wage.
You may also be wondering how exactly you set a date to start your leave. This is really up to you, and what is allowed under your employment terms. Some moms-to-be prefer to take time off a couple of weeks prior to the delivery date to rest and prepare the home. Others will work right up to the delivery date, or actual delivery. You may have a scheduled c-section or induction already and can plan around that. There really is no right or wrong answer. It is best to listen to your body and do what works best for you under what you qualify for and what makes sense financially.
Disability Policy Coverage
If you do not qualify for FMLA or under your workplace, there may still be the option of private disability insurance. Check your benefits package and see if this is something that may be included. If so, read the fine print about parental leave.
Many short-term disability policies (STD) offer pregnancy and maternal benefits that cover 50-70% of your income for 6 to 8 weeks after giving birth. This generally is provided to cover short-term accidents or illnesses but it may in fact also cover pregnancy and postpartum. If you do have one of these plans in place privately or through your employer, you will want to determine what is covered and how to submit claims if you plan to utilize the policy.
Another option you may have is a long-term disability policy (LTD) which would generally be purchased through your employer or privately. Generally, these policies do not cover standard maternity leave, however, if you encounter more serious complications with your pregnancy or delivery, this policy may be a valuable asset. In many cases, even issues like postpartum depression may fall under this category.
If your employer does not provide coverage, you can try to purchase a private policy. Generally, this would need to be done prior to becoming pregnant. It is typically written that pre-existing conditions, including pregnancy, would not be covered if they predate the policy. It is worth looking around just in case.
When I was pregnant with my first I found out much too late in the pregnancy that I had absolutely no financial coverage. I was born and raised in California, where we had state coverage. Naive to the fact this was not a country-wide thing, I did not plan at all for no income during maternity leave. I also did not fall under FMLA but was fortunate that my company had adopted a similar policy and at least was protected for the unpaid time off.
I was lucky enough to have my employer enact a short-term disability policy before I had my baby. It was something they had been meaning to implement anyway, and this gave them the incentive to do so. They were able to actually cover the pregnancy even though it was already almost to term. There was something different in a group policy vs. a private one in regard to pre-existing conditions. It may be a long shot, but this is always an option worth exploring with your employer.
For anything not covered, or a more in-depth read on all things maternity leave, this is a great article at babycenter.com.
No matter which coverage you have, or if you have none, you will need to plan what your postpartum will look like. Time with your employer needs to be scheduled, work passed to others, your “village” may need to be on call, etc. This time is really hard. The best expectation is to not have any outside of your little family at home.
You also need to plan if you will be taking a reduction in pay during this time. This is a time you may see costs increase by adding diapers, medical costs, and even takeout. It’s best to plan ahead so you do not add to the stress of the postpartum period.
Planning for Medical Expenses
One of the most shocking things, when we had our firstborn, was the hefty bill at the end. All insurance plans vary but it is so important that you are familiar with yours before you get a very large and unwanted surprise.
There are a couple of things to take into account:
- Your deductible
- Your maximum out-of-pocket
- Your co-insurance
- In-network vs out of network
- Will you be pregnant in multiple plan years
Your deductible is the minimum you must meet before most things are covered under your plan. After this is met you only pay a copayment or coinsurance for services. You should plan to at least spend this amount for the pregnancy and delivery.
Your maximum out-of-pocket is the maximum amount you will be required to spend for covered services in a plan year. After this amount is met, deductibles, copayments, and coinsurance for in-network care and services will be covered 100% by your health plan. As long as you are utilizing services in-network, this is the top of what you will need to budget during a plan year for your pregnancy.
Co-insurance is the amount you pay for covered healthcare after you meet your deductible. If you see 90% coinsurance, then you are responsible for 10% of the final cost up to your maximum out-of-pocket limit. Sometimes you will see 100% coinsurance in which case you have no financial obligation outside of your deductible and any copayments.
In-network vs out of network is something you really need to be mindful of. The cost to you can drastically change if you choose an out-of-network provider. Often time coverage is 50% or less of all expenses. It is generally in your best interest financially to choose a provider within your network.
Lastly, when you get pregnant actually matters. Every medical plan has what is called a “plan year” which is the cycle in which they count all billings towards your deductibles and out-of-pocket costs. If you will be pregnant over more than one plan year, it is possible you will need to plan for a minimum of two deductibles up to two times the out-of-pocket maximum (once per year).
It is common to set up a payment plan with your doctor or the hospital to which you deliver. It is crucial to figure this out before you are hit with an unexpected medical bill during postpartum. If all else fails, call your insurance company to figure this out with them so you can plan.
At this point, you should have a good idea of a path forward for planning both time-off and managing the financial hurdles that come with it. Stay tuned for more in the Navigating Postpartum series, coming soon!
Disclaimer: This article is in no way offering legal, financial, or medical advice. If you seek these services, please contact an experienced and licensed professional.
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