If you or someone you know is preparing for a maternity leave, we thought it might be helpful to understand some of the choices around benefits and the potential impacts of those choices.
Risk of Not Maintaining Benefits
Many employees elect to terminate benefits for temporary leaves – unless the employer is paying for premiums of course! But plan members should be made aware of the risks associated with terminating benefits for a temporary leave.
Benefits plan provisions include pre-existing condition limitations for benefits such as critical illness or long-term disability benefits. When benefits are terminated – even for a temporary leave – pre-existing condition limitations are reset. The following Benefits in Action scenario illustrates how this risk works.
Benefits in Action
Jody was excitedly expecting her first child and had made plans with the benefits administrator at her firm on the first day of her leave. Because Jody’s spouse had a generous plan with his employer, Jody decided that she didn’t want to keep her company’s plan.
Unfortunately, shortly after returning to work a year later, Jody was diagnosed with breast cancer. Despite debilitating chemotherapy treatments, her claim for both critical illness and long term disability benefits were declined.
Investigations for breast cancer had begun during her maternity leave, and consequently, Jody was deemed to have a pre-existing condition. Depending on the contract, illnesses under treatment or investigation 3 to 6 months prior to coverage taking effect.
Illnesses and injuries diagnosed during the leave would also not be eligible for a claim.
If you are wondering how you should handle benefits during your maternity leave, please contact us.