There are several benefits areas to consider when an employee has a new child.

We'll look at these areas:

For newborns, medical insurance will generally cover a newborn for 30 or 31 days after birth under the mother's coverage. (Check with your carrier's documentation for the exact period.)

For the newborn to remain covered, the employee (whether mother or father) must complete a change form to add the newborn to employee's health plan within the specified time period of 30 or 31 days.

Adopted children must also be added onto the plan within a specified time period after they become legal dependents, usually 30 or 31 days.

Employers and employees should be aware that the premium, deductibles, and maximum out-of-pocket levels will go up to family (or employee plus child) levels if not already there. If the employee is contributing toward the premium, they should know how the increase will affect their contribution.

Why does the definition of disability matter?

Knowing when an employee becomes disabled by pregnancy is important because, depending on the size of the employer, it triggers her right to specific types of leaves of absence.

Less than five employees:

There are no mandated leave requirements and no job protections.

Five or more employees (full- or part-time):

In California, pregnant employees are eligible for state Pregnancy Disability Leave (PDL).

• PDL allows time off for pregnancy, childbirth and related medical conditions (not for baby bonding)
• All pregnant employees are eligible, regardless of length of service
• Provides up to four months of leave, which can be taken intermittently (internal policy can provide for a longer leave period)
• At the end of leave, the employee must be reinstated to the same job position

Employees must provide verbal or written notice of the need for PDL, when it will start, and approximately how long it will last. When PDL is foreseeable, employees must provide 30 days notice.

Employers who provide longer leaves of absence for other forms of disability must provide the same amount for pregnancy disability leave.

50 or more employees:

Employees are protected under the federal Family Medical Leave Act (FMLA) and California Family Rights Act (CFRA). FMLA and CFRA also allow leave for bonding with a new child.

Eligibility and rules for administering leave under these programs is more complicated. Ask us if you need more information.

Here are some facts about SDI:

• SDI is intended to partially replace wages for employees unable to work due to disability
• SDI benefits are based on wages earned in prior quarters
• SDI is administered through the Employment Development Department (EDD)
• Employers may require that employees use sick leave, however SDI benefits will be reduced
• Employees are ineligible for SDI benefits if they are receiving full pay while on leave (including accruing PTO, sick leave, etc.)
• Vacation pay does not affect SDI benefits

The maximum weekly benefit in November 2006 is $840 for quarterly wages of $19,831 ($72,324 annual). Download the weekly benefit chart.

SDI benefits for a NORMAL pregnancy are up to four weeks before expected delivery and up to six weeks afterwards.

Voluntary Disability Insurance

Some employers choose to provide voluntary disability benefits through private insurance.

The rules and benefits for voluntary DI will be according to the employer's contract.

For new mothers, PFL picks up when SDI coverage ends at the end of her disability period.

PFL does not provide job protection, and works in conjunction with an employer's policies for leave.

Paid Family Leave is limited to a maximum of 6 weeks within a 12-month period.

We're happy to work with your employees to help them determine if and what type of life insurance will help them with their financial security. Term life insurance is more affordable than many people realize.

To help your employees understand the value that life insurance provides, please feel free to provide them with our one-page newsletter.