Financial Planning and Benefits

Even before you begin your maternity leave negotiations with your work colleagues, you, and your partner if you have one, should start by taking a good look at your projected finances.  You will want to consider your financial situation broadly.  Do not concentrate too closely on just the maternity leave.  Be sure to include the time before, during, and immediately after your maternity leave.  You should think not just about salary to cover the maternity leave itself.  You must also factor in clinical incentives, health and disability insurance and other benefits, student loans, and service obligations as well.

This initial process will help you to begin planning the overall length of your maternity leave.  Commonly, there is a disconnect between how much time you would  like to take, how much time your employer will allow you to take, and how much time you can really afford to take.  Once you figure out how much of your leave will be paid leave and how much of it will be unpaid, you may need to adjust the length of your leave.

With respect to your financial planning, it is important to understand the difference between maternity leave employee benefits and temporary disability benefits.  Many employers have a maternity leave benefit for their employees.  Although there are certainly variations on the length of paid leaves offered by individual employers, typically women will receive six weeks of paid leave after a vaginal delivery and eight weeks of paid leave after a cesarean section.  However, there are usually some qualifications for this benefit.  You may need to be a full-time employee.  You may need to have worked at your institution for a certain length of time, typically one year.  This is important information to clarify before you sign an employment contract.  If your annual salary is $100,000, a six-week maternity leave is worth $11,538 and an eight-week leave is worth $15,385 in salary alone.  That is a significant benefit to lose out on because of ineligibility.  As a result, reproductive years can be challenging times for women to change jobs for financial reasons alone.

Several but not all states have what is called Temporary Disability Insurance (TDI).  If you have worked for a certain amount of time in Rhode Island, New York, New Jersey, California, Hawaii, or Puerto Rico, you may qualify for TDI since pregnancy is considered “a potentially disabling condition.”  TDI payments are 4.62% of your salary with a maximum benefit rate of $625 per week in most states (http://www.dlt.ri.gov/tdi/), well below the salary of a typical physician working full-time but certainly more than no income at all.  At some institutions, while you are on maternity leave, you get paid your regular full salary as your employee maternity leave benefit and you can also collect TDI.  However, your TDI payments may then go directly to your employer during the time when you are receiving your maternity leave benefit.

In addition to your base salary and maternity leave benefit, make sure you factor in clinical incentives or bonuses when you are doing your financial planning.  What will be the monetary penalty for not taking overnight or weekend call, delivering babies, performing surgeries, seeing patients, or whatever it is you do as a clinician?  How long can you afford be exempt from those responsibilities?  Also consider the impact of your maternity leave on any loan repayment plans for educational debt.  It is entirely possible that a gap in your service payback can either prolong your service obligation or, even worse, negate your payback entirely.  Both of these sequelae have significant financial and logistical implications that are best to consider in advance.

Whether you need to consider your health insurance when you are planning your maternity leave will depend on whether you have health benefits through your job or your partner or spouse’s job.  If you have health benefits through your job, then what percentage of your benefits do you currently pay for?  While on unpaid leave, be aware that you may have to start paying for or increase your contributions to your benefits beginning with the first calendar month of your unpaid leave.  If your family has health insurance through your job, then paying for coverage during an unpaid leave is unfeasible for many families.

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