5 Things You Should Know About Maternity Leave

Before you get too busy decorating the nursery and being feted at baby showers, be sure to do your homework and find out exactly what maternity leave benefits you're entitled to.

The months leading up to the arrival of a new baby can be an exciting and activity-filled time, often a whirlwind made up of a baby shower, doctor appointments, and readying your life (and your home) for the new human who will soon arrive.

During this hectic chapter, it can be easy to overlook some details, including the nuances of what maternity leave actually involves—financially, legally, and otherwise. But this is one area you won't want to leave until the last minute, as doing so can have a variety of ramifications. Here's a closer look at what you need to know about maternity leave before heading home with your new baby.

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What you're entitled to

Generally speaking, the Family and Medical Leave Act of 1993 (FMLA) ensures 12 weeks of leave annually to employees after childbirth or adoption. However, there are several caveats to understand when it comes to whether or not your company is actually required to offer maternity leave, and whether you will qualify for those benefits.

Most notably, the FMLA applies to "eligible employees of covered employers." Let's start with what it means to be an eligible employee.

In order to qualify for FMLA leave, you must have worked for the employer for 12 months, and have provided at least 1,250 hours of service for the employer during that time (equivalent to about 24 hours per week).

About 56 percent of U.S. employees end up being eligible for FMLA coverage, according to the Department of Labor. Reasons for ineligibility vary, but about 21 percent miss out on the benefits because of having worked too few hours, or having worked for an insufficient period of time for an employer.

"Some states have specific leave policies for employees that have been at a company fewer than 12 months, but not all," explains Maria Selvaggio, vice president of people for the company M1 Finance.

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Not all employers are required to provide maternity leave benefits

Here's the second caveat pertaining to the FMLA you should understand: Not all workplaces in this country are actually "covered employers"—meaning they're not bound by the law's requirements.

"For the majority of companies with fewer than 50 employees, there is no legal right to paid or unpaid maternity leave," says Selvaggio.

However, the 50-employee threshold does not apply to public agencies, including local, state, or federal government agencies, all of which must provide maternity leave regardless of their size.

About 15 percent of employees are ineligible due to their work site being too small, according to the Department of Labor. And that statistic may be slightly misleading.

Christine Michel Carter, a senior writer for Forbes Women, whose beat includes maternal health, childcare, and how parents navigate work and life, says the FMLA simply doesn't cover the majority of U.S. workers.

"Right now, the FMLA does not cover employees in the private sector whose companies have less than 50 employees. However, the U.S. Census Bureau reports there are nearly 6 million U.S. companies with fewer than 50 employees, and firms with fewer than 20 workers made up 89 percent of small businesses," says Carter.

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Maternity leave is often unpaid

In many cases, family medical leave is unpaid, which is another important point to nail down, in order to ensure you're financially prepared for the months ahead.

The act states that employees are eligible to take "unpaid, job-protected leave for specified family and medical reasons."

"Federal law doesn't require employers to pay for that time off, although paid family leave and an expansion of FMLA is currently being thrown around by Congress," explains Colin Nabity, CEO and co-founder of Breeze, an online insurance broker specializing in disability insurance and critical illness insurance.

Despite the fact that there's no federal requirement, some employers still provide paid maternity leave as an employee benefit, adds Nabity.

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In addition, a small handful of states have paid family leave laws, adds Kevin Haney, president of the online platform Growing Family Benefits.

"Seven states have paid family leave laws that replace a portion of income," so that both parents can bond with their newborn baby after birth, explains Haney. Those states are California, Connecticut, Massachusetts, New Jersey, New York, Rhode Island, and Washington.

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Employers must maintain your insurance, but you may have to pay for it

As part of the FMLA requirements, employers must provide continuation of any group health insurance coverage you have, and they must do so under the same terms and conditions as if you had not taken leave.

"Parents covered under FMLA or a related state laws have legal rights to continue their health insurance as if they had continued work, paying their share of the premiums," explains Haney, of Growing Family Benefits.

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When and how to request maternity leave

Employees generally must request maternity leave 30 days in advance of when that leave would take place. The employee's notice may be verbal or written, according to FMLA guidelines.

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The employee is required to provide enough information for the employer to determine that the leave being requested is actually covered by the FMLA. In addition, you'll need to let your employer know when and how much leave you anticipate taking.

One additional noteworthy point: Eligible employees may take up to 12 weeks of leave in a 12-month period, but those weeks do not have to be consecutive. Employees may take that leave in separate blocks of time, according to the FMLA.

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Disability insurance is another option

For the many, many employees in this country who are not covered by the FMLA, tapping into disability insurance to help address some of the costs of parental leave can be another viable option.

"A short-term disability insurance policy will usually consider giving birth a disability," explains Nabity. "In general, short-term disability payments will last for six weeks after normal delivery, and eight weeks for a C-section. Some policies will also provide eight weeks of benefits for the birth of twins or triplets."

With most policies, about 60 percent of your lost income will be replaced, but it can also be as high as 80 percent or as low as 40 percent, says Nabity. If you have complications, which happens about 25 percent of the time according to Nabity, then disability insurance benefits may be extended even longer.

"The disability period typically begins the day you give birth," Nabity continues. "If you need to leave work prior to delivery, the insurance company will consider you disabled when you cannot perform the main duties of your occupation as a result of your pregnancy. But typically, with short-term disability policies, you can't start disability payments any earlier than four weeks before your due date."

While all of this can be very helpful for expecting parents, here's one last point to understand to actually access disability insurance benefits: You must have initiated the disability policy before becoming pregnant. Meaning, you want to do your homework on this front well ahead of time, not when you're furnishing the baby nursery and picking out baby onesies.

If you don't apply for the insurance prior to becoming pregnant, insurance companies will simply view it as a pre-existing condition and you will not be eligible for benefits, says Nabity.

"We see this happen a lot. Expecting mothers start looking into disability insurance when it's too late. You need to plan and get your disability insurance ahead of time," stresses Nabity.

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