Is Pregnancy a Pre-Existing Condition for Short Term Disability?

A common question I get from women at open enrollment time is if pregnancy is a pre-existing condition for short term disability. Usually, this question comes from women who are already pregnant and who aren't currently enrolled in the STD plan. So in this article, I'm going to talk about how pregnancy is treated under most plans.

Pregnancy and the Pre-Existing Condition Limitation

Most group disability plans are guaranteed issue at every enrollment. This means you can enroll without any medical questions and will be approved regardless of health. However, in exchange for the guaranteed approval, any claims may be subject to what's called a pre-ex, or a pre-existing condition clause.

The most common pre-ex clauses are 3/12, 6/12 and 12/12.

Here's is what the numbers 3/12, 6/12 and 12/12 mean:

(Number of Months Look Back Period)  /  (Number of Months Look Back Applies)

A 3/12 pre-ex means that if you file a claim within the first 12 months the policy is in effect, the insurance company will look back 3 months before the policy took effect to see if it was caused by a pre-existing condition. If it's a 6/12, then the insurance company will look back 6 months for a pre-existing condition for any claim filed in the first 12 months.

If the condition was pre-existing during the look back period, then the insurance company can deny the claim.

Keep in mind that if you are enrolling in the disability plan in November but the plan takes effect on January 1 that the 12 months begins on January 1 and the look back period would be the three, six or 12 months before the effective date and not the date you enrolled.

If you are pregnant when you enroll, your claim for short term disability will most certainly come in the first 12 months the plan is in effect and therefore, your claim would be denied.

However, if you enrolled in October and got pregnant on January 10th after the effective date, then your pregnancy would not be considered pre-existing since it occurred after the effective date.

The Difference Between Group and Voluntary Disability Plans

One factor that may come into play is whether the disability plan you are being offered is a group disability plan or a voluntary one.

The difference between a group plan and a voluntary plan is underwriting. While group disability might be guaranteed issue at every enrollment, a voluntary disability plan might only be guaranteed issue when you are first eligible.

If it's a voluntary plan, if you don't enroll the first time you are eligible and want to enroll later, you might have to answer the medical questions to get in. If you are pregnant, this could possibly prevent you from being approved for the short term disability.

In addition, if you have to answer medical questions to qualify for your disability plan, if you have any other medical conditions outside of being pregnant, those conditions might prevent you from getting disability insurance as well.

The best time to enroll is when you are first eligible under those plans.

Options If You Are Already Pregnant

If you are already pregnant, you'll want to check out how much vacation and sick time you have available that you could use doing your maternity leave.

Alternatively, there are some companies that allow you to allow you to buy, sell and donate vacation time. If your company does that, a possible solution to not having short term disability insurance is to buy it or get some one to donate it to you.

As far as donations go, most donations are made for people with serious illnesses and so I wouldn't really count on that as an option.

The other option is to take your maternity leave unpaid.

Sign Up the Year Before You Get Pregnant if Possible

If you are trying to get pregnant, you might consider signing up at the enrollment period prior to the year you want to get pregnant.

If your employer's plan looks back for any claim filed in the first 12 months after the effective date and you satisfy that 12 month time period in the year prior, then your pregnancy won't be considered pre-existing.

If this is a planned pregnancy, that might help you out to remember to do that.

Conclusion

Pregnancy is considered a pre-existing condition if you are a newly enrolled in your disability plan and most likely will be excluded. Try and plan ahead and make sure you enroll when first eligible or the year before to get around the pre-ex clause found in most group disability plans.

As always, in group insurance, every plan may vary in what it covers depending on what your employer negotiated with the insurance company.

Let me know how you handled your short term disability in the comments below to help my readers further understand their options.

The Definitive Guide to Disability Income Insurance

Disability income insurance replaces a percentage of a person's income in the event they are sick or hurt and can't work because of it. It's a fairly common workplace benefit offering.

There are two types of disability income insurance. Those two types are:

• Short term disability income insurance Short term disability insurance provides a weekly benefit in the event of a disability.
• Long term disability income insurance Long term disability provides a monthly benefit in the event of a disability.

When discussing these two types of disability insurance, people refer to them as STD and LTD. Disability insurance is referred to as DI.

RESOURCE: This guide is a part of my larger guide called The Definitive Guide to Workplace Benefits. Be sure to check it out.

What Is The Purpose Of Disability Income Insurance?

If someone gets sick or hurt and they can't work because of it, they don't get paid. As a result, if they don't have any money saved up ahead of time, they could have a tough time paying their bills.

This is where disability insurance comes in. If you are sick or hurt and can't work because of it, this insurance will pay a benefit directly to you and you can use that money however you need to.

What Does Your Company Offer, Who Pay For It And What Are The Benefits?

How a disability plan is set up will vary from company to company. Some companies pay the premiums, others don't. Some pay for long term disability but not for short term. Some don't pay for either.

You as an employee can also opt to enroll in one or both types of disability plans or forgo both if you want.

Thd benefits, waiting periods. duration of benefits and the definition of disability will all have to be determined for your specific plan by reading your plan documents.

What Is The Definition of Disability

Every policy has a definition of what disability is and if you meet that definition, then payments will be made based on the rules of the policy. Definitions will vary by policy and by state.

Typically, the definition will revolve around whether you can do the job you had or any kind of job you might be able to do. The definition can also vary between the short term and the long term disability policies

Waiting Periods

A waiting period is the length of time that must pass that you meet the definition of disability before benefits can be paid.

Short term disability waiting periods are listed in this format

X days for injury/X days for sickness.

Here are some examples of short term disability waiting periods:

• 0/7
• 7/7
• 0/14
• 14/14
• 30/30

Long term disability waiting periods are just listed in the number of days

whether the disability is for an injury or accident.

Long term disability waiting periods:

• 90 days
• 180 days
• 360 days

Benefit Amounts

Benefit amounts can either be designated by a percentage or by a flat amount (up to a certain percentage). For example, you might be able to cover 65 percent of your income but not any more.

Alternatively, you can opt for certain amount of coverage as long as they don't exceed a certain percentage. You might be able to buy a weekly amount of STD in increments of $100 per week up to a certain dollar amount. And the same would apply to LTD except for the amounts would be in monthly amounts.

Benefits pay from disability income insurance are always a percentage of your full income and not the full amount. This is to give you and incentive to come back to work.

Benefit duration

Once you meet the definition of disability, if you have short term disability, you'll begin receiving payments after your waiting period is over and then until the short term disability is exhausted (if you are enrolled in it) and then the long term disability will kick in.

The benefit duration on STD is pretty cut and dried. With LTD, it's gets a little more complicated. Some sample durations might be:

• Until age 65
• Five years
• Two years for your own job and a longer period of any job

Again, review your policy to see how long the duration is.

Pre-existing Condition Limitation

Many disability policies incorporate a pre-existing condition clause. As with all of the other options, you'll have to look at your plan and see what it is.

Pre-existing condition exclusions are written in the following format:

X months look back/X months pre-existing condition period.

• 3/12
• 6/12
• 12/12

So, a 3/12 pre-existing condition limitation would mean that during the first 12 months of the policy, if there's a claim by the insured, the insurance company will look back 3 months before the insured took out the policy to see if a pre-existing condition led to that disability. Once 12 months have expired, then the insurance company won't look back anymore.

A good example of how this works is in the case of an employee who finds out she is pregnant in November and enrolls in a new disability amount effective January 1. In the first 12 months of the policy, she will likely submit a claim for her maternity leave. Since she was already pregnant within the three months prior to the effective date, that claim would be considered a pre-existing condition and be denied. However, if she got pregnant after January 1 or after the 12 months, this would not be considered a pre-existing condition.

On The Job or Off The Job Coverage

Just as in the case of accident insurance, disability insurance can also be set up to either include or exclude an injury that occurs on the job. In a lot of groups I've seen, it's common to have off the job coverage for STD and 24 hour coverage for LTD.

As always, read your policy!

Your policy will guide how your plans work. There are many options with regard to disability income insurance. Things like partial disability payments, own occupation definitions, whether it's portable coverage, written as a group contract or an individual contract. Check your contracts to see how they work.

The Definitive Guide to Workplace Benefits

Below you'll find my Guide to Workplace Benefits. Let me know if you have any questions about my guide in the comments section below. I want this post and along with my workplace benefits videos to be the best, most comprehensive and helpful guide about workplace benefits available. Your questions will help me provide a better, more insightful guide.

Health Insurance Benefits, Programs & Services

Health insurance pays for covered medical expenses, while other programs provide tax savings for health care expenses and other services to promote and treat your health and well being.

• Major medical plans
• Prescription drug coverage
• Section 125 plan
• Flexible spending accounts (FSA)
• Health savings accounts (HSA)
• Employee assistance program (EAP)
• Wellness programs
• Tobacco cessation programs
• Teledoctors
• Healthcare price transparency tools
• On site health clinic
• Athletic facilities

Dental & Vision Insurance Benefits

Taking care of your teeth is what dental insurance benefits are all about. From eye exams, to eyeglasses to contacts, vision insurance help employees pay for the costs of eye care.

Life Insurance Benefits

Life insurance provides a death benefit to a beneficiary when an insured that is covered under the policy dies. Below I've listed the types of life insurance that might be made available to employees at work either under the terms of a group term life insurance contract or an individually owned contract.

• Basic Group Term Life Insurance
• Supplemental Group Term Life Insurance
• Dependent Group Term Life Insurance
• Accidental Death and Dismemberment (AD&D)
• Permanent Life Insurance

Even though life insurance is a pretty simple concept, many employees still get confused about what their life insurance options are both at work or on their own on an individual basis. Most employees know they have something at work but aren't sure how much or what type it is.

It's not also not uncommon for those responsible for administrating the life insurance programs for an employer group to not know all the details about how they work. This sometimes includes not just the human resources professionals but also the agents who put these programs in place.

Here's a collection of resources to help you get a better understanding of life insurance provided at work.

• Definitive Guide to Life Insurance
• 8 Problems with Group Term Life Insurance
• 6 Reasons Employees Enroll in Permanent Life Insurance
• Why It's Not Always Easy to Buy Life Insurance on Your Own
• Are Your Group Insurance Rates Attained Age or Issue Age?
• Group Life Insurance Conversion and Portability Explained

Flexible Working Hours, Telecommuting, Paid Time Off, Sick Pay, Workers Compensation & Disability Income Insurance Benefits

Paid time off and medical leave provide time off when you need it while sick pay, workers compensation and disability income insurance policies provide money to employees when they are sick or hurt and can't work because of it. Flex time and telecommuting provide you more freedom and control in how they work.

• Paid time off (PTO)
• Sick pay plans
• Workers compensation
• STD: Short term disability income
• LTD: Long term disability income
• Family medical leave
• Flex time
• Telecommuting

Critical Illness/Specified Disease Insurance, Accident Insurance & Other Indemnity Insurance Benefits

Critical illness and specified disease insurance pays you money in the event an employee is diagnosed with a critical illness or specified disease. Accident insurance pays benefits directly to the insured for covered services related to an accident, while other indemnity insurance programs offer payments for other medical services not covered by health insurance plans.

Articles about critical illness you can read here on my site:

• Definitive Guide To Critical Illness Insurance Policies
• Nine Reasons To Buy A Critical Illness Insurance Policy
• Guide To Accident Insurance
• Eight Reasons 24 Hour Accident Insurance Coverage Is Best For Your Employees

Long Term Care Insurance Benefits

Long term care insurance is a little understood insurance benefit that some employers choose to offer their employees.

Saving Money, Retirement Plans and Financial Planning

Saving money for emergencies, for retirement and planning for the future.

• Direct deposit
• Premium direct deposit
• Savings bonds
• Social Security
• Retirement plans
• Stock options
• Financial consulting

Other Workplace Benefits

In addition to insurance benefits, there are a number of other benefits that employers offer to their employees. Here are a few additional workplace benefits you might see offered.

• Benefit statements
• Purchasing programs
• Home & auto insurance discounts
• Prepaid legal plans
• Employer sponsored identity theft protection
• Pet insurance
• Educational assistance
• Achievement awards
• Adoption assistance
• Dependent care assistance
• Employee discounts
• Transportation (commuting) benefits
• Cell phone
• Moving expense reimbursement
• Unemployment insurance
• Meal plans

The above guide to workplace benefits is a good foundation for the types of programs that employers might choose to offer their employees.

What are Voluntary Benefits?

You might think of voluntary benefits as insurance benefit plans that employees can purchase "voluntarily" through their employer if they decide they want to enroll in them. While technically this is true, it also implies that some insurance benefits are required to be purchased by the employee. But this is not the case. Employees are not required to buy any insurance benefits at work. All insurance products offered for purchase through an employer are optional benefits as far as the employee is concerned.

Mandatory Benefits: The Employer Must Provide Them By Law

For an employer though, it's different. There are some benefits that the employer must provide to employees. Mandatory benefits are things like:

• Paying social security taxes
• Providing unemployment insurance
• Providing workers' compensation

It's the law - or mandatory - that an employer provide the benefits listed above. They have no choice.

Voluntary Benefits: The Employer Can Offer Them If They Choose To Do So

However, it's not the law that an employer offer a product like life insurance that employees can purchase and so life insurance is a voluntary benefit as far as the employer is concerned.

So, the main reason we use the word voluntary is because there are some benefits employers must provide to employees that are mandatory. Anything not required by law is voluntary. The employer can offer them if they want but they don't legally have to.

Just Because A Benefit Is Voluntary Doesn't Mean There Are No Underwriting Requirements

I make the distinction between mandatory benefits and voluntary benefits being used in terms of whether an employer has to offer them by law for a very important reason. The reason is that most employers often use the word voluntary in a different context.

The context is that the word voluntary seems to mean that it's voluntary that the employee buy it and therefore there are no underwriting requirements on the employer to offer programs to their employees when there are.

It's important to understand that any program you offer to your employees does come with underwriting requirements attached to them, even if the employee pays the full premium.

Old School View Of Voluntary Benefits - Worksite Benefits

Traditionally, employee benefits have been broken down into two distinct categories. Those two categories are:

1. Group insurance This is insurance provided through group contracts that are owned and controlled by the group. These would be things like basic group term life insurance, group dental and group disability. While enrollment in these types of group benefits is voluntary, aside from the group health insurance, group contracts are often labelled ancillary benefits to differentiate them from the second category of insurance benefits.
2. Worksite benefits This is insurance provided through an individual insurance contract that is owned and controlled by the employee offered through work. These would be things like life, cancer and accident insurance. These types of insurance have historically been called worksite benefits or "voluntary" benefits. Typically, worksite products have their roots in individual contracts. Since employees owned these contracts, they could continue them after they left employment as well.

Both group and individual insurance offered through an employer help the employee. That's because the employer uses the group's buying power to negotiate a better deal than employees can get on their own for insurance they feel they need. This could be seen in:

• Lower insurance premiums
• Reduced underwriting requirements
• Both lower premiums and reduced underwriting requirements
• The convenience of paying premiums through payroll deduction

These are the true benefits that employers offer when offering voluntary benefits.

What I see in practice is that most employer groups often look at the group insurance contracts as the real benefits and focus most of their time on those. They often gave little thought or importance to the old school worksite benefits.

The insurance companies and agents offering those benefits through an employer were typically the second class citizen of insurance benefits with employers. More times than not, it was implied that the worksite benefits are available but we aren't going to do much to facilitate their purchase.

With the rising costs of health insurance, this attitude is changing because employer groups are reducing their contributions to the overall costs of an employee's benefits. Since the financial burden on the employee is increasing significantly, employers are under a lot of pressure to help employees find ways to assist them in paying these rising costs at their own expense.

The answer is a bigger focus on voluntary benefits to help fill those financial gaps.

The New Voluntary Benefits - Workplace Benefits

A transition has been made over the last few years from the old school of group contracts and individual worksite contracts. Those lines are being blurred. Today, the new landscape is that you've got the health insurance and then everything else is referred to as workplace benefits, aka "voluntary" benefits. These benefits are written through group contracts more than individual contracts like in the past.

These workplace benefits are now broken down into five different types of insurance plans. Those are:

1. Life insurance Life insurance provides money to employee's beneficiaries in the event they die to soon. The types of life insurance offered can be term, universal or whole life insurance.
2. Disability income insurance Disability income insurance provides income replacement in the event of a disability. There are two types of disability insurance, short term and long term.
3. Supplemental health insurance Supplemental health insurance provides medical coverage for gaps in an employer paid health insurance plan.
4. Accident insurance Accident insurance provides cash paid directly to the employee in the event of specific accidents.
5. Critical illness/specified disease insurance Critical illness coverage provides a lump sum payment to the employees in the event of certain catastrophic illnesses like cancer, heart attacks, and strokes.

Rising health insurance costs have put voluntary workplace benefits in the spotlight. Employers have figured out they can reduce health plan benefits or raise deductibles in the main health plan and then reduce their overall premiums. Employees then have the choice to fill the gaps important to them with the menu of workplace benefits but now at their own cost.

Conclusion

That's a summary of what the industry's view of what voluntary benefits are today.

In my view, I believe that if the employee has to pay the full cost of a voluntary benefit, then the benefits of ownership should also be included. So, while the industry has shifted their focus more on using group contracts to fill the need of the old worksite benefits, I still prefer individually owned insurance contracts at work whenever possible.

If you have any questions, feel free to let me know in the comments below.