Virginia Implements Minimum Benefit Rule for Childbirth in Short-Term Disability Policies

On April 9, the Governor of Virginia signed into law Senate Bill 567, mandating that insurers that issue individual or group sickness insurance policies providing short-term disability (“STD”) coverage for childbirth must provide a benefit of at least 12 weeks following birth.

The new requirement applies to any policy delivered or issued for delivery in the Commonwealth on and after July 1, 2021.

The Virginia Corporation Commission is seeking comments from insurance industry stakeholders on the impact of this change on current and future STD policyholders, specifically to identify potential private options for both a standalone maternity leave benefit and a paid family leave policy. A report of those comments will be submitted to the House Committee on Labor and Commerce and the Senate Committee on Commerce and Labor by December 1, 2020.

This is an unusual step for a state to mandate a minimum period of disability for a specific condition in an insurance policy; i.e., recovery from childbirth. Virginia’s move is a unique way to mandate maternity leave and/or parental leave following birth. It appears Virginia will continue to make inroads toward more paid leave as its call for comments indicates.

The FINEOS IDAM Solution simplifies the complex process of absence management with integrated disability claims and absence management, policy, payments, and tasks, to improve engagement and user experience, assisting insurance carriers with the compliance burden. Contact us today to find out more.

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