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What is Maternity Leave Insurance?

K.C. Bruning
K.C. Bruning

Maternity leave insurance, also known as short-term disability, primarily provides a replacement for income lost during maternity leave and funds to cover complications associated with birth. It can also be used to replace income lost due to pregnancy-related complications before birth. The coverage can last for weeks or months, depending on the jurisdiction of the birth. In most cases, a woman who has had a caesarean section, also known as c-section, will receive benefits for a longer period of time than with a vaginal birth.

The specific needs maternity leave insurance will fill depends on local laws and the discretion of a woman’s employer. In some cases, an employer will offer partial or full salary during leave. Other employers will only offer insurance through the company plan. When an employee is being paid during leave, maternity leave insurance can be used primarily to deal with other unanticipated issues related to the pregnancy.

Some maternity leave insurance covers time spend on prescribed bed rest.
Some maternity leave insurance covers time spend on prescribed bed rest.

While maternity leave insurance benefits are typically used after child birth, there are some instances where they come into effect earlier. This usually happens when complications with the pregnancy force a woman to stop work early. In some cases, the insurance can cover several weeks of bed rest. It is also possible for a woman who suffers from post-partum depression to receive extended benefits after the birth.

Maternity leave insurance is typically offered by an employer, though it can also be obtained through a union or local government. In most cases it is an automatic benefit that does not require special application. The insurance can be covered in full by the organization or the individual may need to pay for part of the coverage. If a woman does need to make a partial payment, these funds are usually deducted from the paycheck over the course of several pay periods.

The amount of salary replaced by maternity leave insurance depends on the location of the birth and the organization offering the benefits. A common benefit plan will replace anywhere from one half to two thirds of an individual’s salary. Some governments will require an individual to use the full benefit offered by the locality before using the coverage offered by an employer.

There is some variation as to when benefits start to be paid. Many governments require that an employee be out of work for at least a week before receiving payments. Others offer benefits as soon as the first day an employee ceases work. Some companies will require a woman to use all vacation and sick days before receiving benefits.

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    • Some maternity leave insurance covers time spend on prescribed bed rest.
      By: Milissenta
      Some maternity leave insurance covers time spend on prescribed bed rest.