Maternity leave policies that really deliver

A long-sighted view—and a little generosity—go a long way when doctors and staffers with newborns need some time off.

By Robert Lowes
Midwest Editor

At Alton [IL] Multispecialists, a staffer who's just had a baby can apply paid time off—16 days a year for a new employee—to maternity leave. But when a physician at the partner level gives birth, she has no paid vacation or sick time to fall back on; every day at home means less income.

That's one of the ironies about physicians having babies. They earn far more than their employees, but in many practices the employees are the only ones who get maternity benefits. Complicating matters, women doctors are finding it harder to cover maternity leave with disability insurance, which has gotten costlier and more restrictive.

With women forming an ever larger percentage of the physician population, practices should think twice about letting maternity leave be an economic hardship for female doctors. "If you want to recruit and retain women, you need competitive benefits," says practice management consultant Gray Tuttle Jr. in Lansing, MI.

We interviewed consultants such as Tuttle, practice administrators, physicians, and insurance brokers to come up with maternity leave strategies that make sense for physicians and staffers alike. They'll help you be a mom-friendly practice, both financially and emotionally.

When a staffer has a baby

Maternity leave policies for employees must toe the legal line. The mother of all maternity laws is the federal Family and Medical Leave Act of 1993. It mandates that companies with 50 or more employees let a new mother take up to 12 weeks of leave. Afterward, she must be restored to her old job or an equivalent position. The employer's not obligated to pay her during the absence, but it must allow her to use up accrued vacation or sick time. The employer also must maintain her health insurance. To qualify for this protection, the employee must have worked there for at least 1,250 hours—an average of 24 hours a week—over a 12-month period.

Doctors who are owners of small practices might think the 50-employee threshold enables them to dodge this law. However, 10 states and the District of Columbia have enacted family leave laws that apply to companies with far fewer employees. Kentucky's law, for example, covers all employees. While some states copy the federal law's 12-week provision, other states mandate shorter leaves that reflect a woman's usual recovery time after an uncomplicated childbirth. This period—during which a woman is deemed disabled—is four to six weeks for a vaginal delivery, up to eight weeks for a C-section.

A bit of nomenclature: The usual recovery period after childbirth is considered medical leave. Any time off after that is family leave.

Whether it's 12 weeks or six, the question arises: Will mothers take full advantage of their rights? A study by RAND concluded that women are unlikely to take longer leaves without pay. So the amount of vacation and sick time a woman can apply toward maternity leave is critical.

"Most practices give new employees two weeks of vacation and five or six days of sick leave," says Gray Tuttle. "More and more, though, vacation and sick time are combined into paid time off, or PTO, which employees can use any way they want. So a new employee might get three weeks of PTO; five-year veterans might get four weeks."

Even if a mother has four weeks of PTO to apply to a six-week maternity leave, she'll still have to forfeit two weeks' pay. How can you sweeten the benefit? Gray Tuttle suggests allowing employees to bank a limited amount of unused PTO from previous years for maternity leave or a catastrophic illness. "Groups that do this usually won't let you bank more than six weeks," says Tuttle.

Some large group practices extend the number of paid weeks off for employees through short-term disability policies. At Mori, Bean, and Brooks, a 35-doctor radiology group in Jacksonville, FL, staffers who've just had a baby can receive 60 percent of their salary while they're considered medically disabled. There's an eight-day waiting period before the disability policy kicks in, but staffers can use vacation and sick time until then.

When a doctor has a baby

Maternity policies for doctors generally distinguish between associates and partners. The former often enjoy more clear-cut benefits, much as nonphysician employees do. Regardless of how much paid leave they receive, all doctors are entitled to as much time off as applicable state and federal laws allow.

Like staffers, associates can apply vacation and sick time toward maternity leave. "Groups usually give new associates two to three weeks of vacation and up to four weeks of sick leave," says practice management consultant and attorney Janice Cunningham at The Health Care Group in Plymouth Meeting, PA. If an associate intends to resume a full-time schedule, however, she should consider reserving some paid leave for parental duties after she returns to work, says Gray Tuttle. "Parents have to take kids to the doctor, stay home when they're sick, and deal with day care problems," he notes.

Maternity leave policies for partners depend in large measure on how doctors are paid. Practices where equal shares are the rule may continue to pay a salary to a doctor who's recovering from childbirth, says Tuttle. But it might not always be a full salary, because other doctors will have to work harder, seeing the absent doctor's patients as well as their own, and because the doctor's leave may mean less overall revenue for the group. Accordingly, some groups use a sliding scale for paid leave—100 percent of salary for the first four weeks, 75 percent for the next four, and so on.

A 10-doctor cardiology group in New England gives a doctor on maternity leave four weeks with salary. If she wants to stay out longer, she can use up vacation and CME leave, which amount to another six weeks. As a result, a doctor can receive income during her recovery period from childbirth (assuming it's normal), and for a few weeks beyond.

"It's a generous benefit," says the group's administrator, who didn't want his group's name in print for fear the local health care community would view his doctors as financially flush. The group, incidentally, doesn't award an allotment of sick days to doctors. But they're still paid if they miss a day here or there due to illness.

In groups that have an income division plan based solely on productivity, maternity leave often hurts doctors in the pocketbook because it means less production. To be sure, new mothers can continue to receive their normal draw, which is typically 75 percent of what they could anticipate earning. In such groups, doctors get periodic bonuses—monthly, quarterly, or annually—if their production exceeds their draws. When it's time to reconcile total billings vs draws, a doctor whose production fell due to maternity leave may receive less bonus money, or none at all.

About a third of productivity-driven practices give doctors on maternity leave a break, says Gray Tuttle. "Let's say a group is doing a year-end reconciliation for 2001 and awarding bonuses," he notes. "When they come to a doctor whose productivity that year decreased because of maternity leave, they'll take her billings for 2000 and prorate them for the gap in 2001."

Medical practices have devised numerous ways to compensate doctors during maternity leave and other periods of disability. Often, it's done through an internal agreement that obliges the practice to pay doctors either all or part of their normal income until a disability insurance policy kicks in.

Tuttle notes a trend toward stinginess in these compensation schemes, however. "One practice reduced its maternity benefit from three months of full pay to one month shortly before a female associate became a shareholder," says Tuttle. "The doctors are willing to get her through the time when she's considered medically disabled. But once she's able to work again, they don't want to pay her to stay home and bond with her newborn."

The 60-doctor Visalia (CA) Medical Clinic runs counter to this trend. It has actually increased its self-funded maternity leave benefit. Up until 2000, a doctor on maternity leave had to use up vacation and sick time for the first 30 days. Then she'd receive $6,000 a month for as long as she was unable to work. The new policy reduces the waiting period to 15 days and entitles Visalia doctors to receive two-thirds of their normal draw, which generally translates into more than $6,000 a month.

"We wanted our doctors to have a bigger perk," says pediatrician Ralph Kingsford, the group's president. "The new policy gives us a recruiting edge over other groups."

Disability insurance: Not as much help

Maternity leave perks used to be more available under disability insurance policies. But these are disappearing as fast as free pens at a medical conference exhibitor's booth.

First, consider disability policies sold to individual doctors. Whether they can apply to normal maternity leave depends in part on the waiting period before the insurer cuts a check. With a 30-day waiting period, a doctor who takes six weeks off can collect benefits for two weeks. That might be worth $2,500. There's a hitch, though: Premiums for 30-day disability policies have skyrocketed, says Walnut Creek, CA, insurance broker Jim Fleming Jr., forcing doctors to choose less expensive policies with 90-day waits. These prove useless for maternity leave, unless a woman misses more than 90 days of work due to complications.

Even if you go ahead and buy a 30-day policy, you'll find other underwriting roadblocks. The policy might exclude disability due to normal pregnancy or childbirth. Or it may specify a 90-day waiting period, even though 30 days is the rule for all other disabilities. "The insurance companies have really tightened up," says Fleming. Conversely, a woman doctor who bought individual disability insurance several years ago might be entitled to thousands of dollars in benefits during maternity leave.

Getting paid for maternity leave under a group disability policy is a mixed bag. Group long-term disability insurance invariably imposes a 90-day waiting period, so it's no help except in cases of complicated childbirth. The picture is less bleak for group short-term disability. Such policies often define normal pregnancy and childbirth as a covered disability, and the waiting period is one or two weeks, according to Lee Shane, vice president of group benefits for Insurance Office of America in Altamont Springs, FL. While short-term disability insurance normally is purchased for nonphysician employees, a few doctors enjoy it under group policies. Sometimes it's bought in conjunction with a long-term policy, sometimes on a stand-alone basis.

Typically, only jumbo medical practices buy short-term policies, because they can command the best rates and terms, adds Jim Fleming. Physician Associates of Florida, a 70-doctor group in Maitland, recently purchased a short-term policy that, after an eight-day wait, pays 60 percent of a doctor's normal income for up to 26 weeks. The coverage costs PAF $68,000 a year.

"It was the best plan we could afford," says Human Resources Director Marsha Burns. "Many insurers don't want to bid on physician groups." The new policy is actually a step down, because PAF used to self-insure physician disability at 100 percent of income for up to six months.

There's one more kind of insurance policy that may help maintain a doctor's cash flow during maternity leave. So-called overhead disability insurance pays fixed expenses such as rent and staff salaries, usually after a 30-day wait. This insurance is typically purchased by solo doctors or those in two- or three-member groups. Again, insurers have gotten stricter, excluding disability caused by normal pregnancy and childbirth or subjecting it to a 90-day wait. "But an overhead policy you bought in 1998 might apply to maternity leave," says Jim Fleming. "If you take six weeks off, the policy might pay for the final two weeks. You'd receive half your normal monthly benefit, which might be as high as $30,000."

A good attitude goes a long way

Maybe you can't give employees and doctors everything they want in terms of maternity leave, but you can bring orderliness and the milk of human kindness to this interlude.

"Establish your maternity leave policy before you have to implement it," advises consultant Janice Cunningham. "You don't want to cook up an impromptu policy after someone has announced she's having a baby." Your policy, says Cunningham, should treat pregnancy and childbirth like any other disability. "It shouldn't matter whether someone has a heart attack or a baby."

Find out the druthers of a doctor or employee who's just learned she's expecting, says Cunningham. "What would she like to see happen during her pregnancy, or after she gives birth? That way, you'll have more time to make the necessary arrangements to accommodate her—lining up a locum tenens, for example."

You have to balance the mother's needs with the practice's needs, but when it comes to time off and compensation, err on the side of generosity, particularly when the mom is a physician. "Many specialty practices are having a horrible time recruiting new physicians, men and women alike," says Cunningham. "So you need to offer good benefits, not only to attract female physicians, but keep them."

Some doctors, however, take a short-sighted view of maternity leave, says Cunningham. When they discover a colleague is pregnant, they may complain about having to take extra call, or subsidizing her while she's out. "Why can't she get back to work?" they grumble. "She looks healthy enough."

"But remember, this doctor may be their partner for 20 or 30 years," says Cunningham. "Let's say she has two babies, and takes off two months each time. That's a very small portion of her career. So it's important to keep short-term hassles in perspective."

In the end, there's no better maternity-leave policy than a supportive attitude. Memphis pediatrician Patrice Reed recalls when she told male colleagues in her group practice that she was pregnant with her third child. "The first reaction was, 'Oh dear, what are we going to do? How are we going to handle call when you're gone?' I felt guilty about being pregnant."

By the time Reed delivered her baby boy in 1998, she and two other female pediatricians—mothers themselves—had formed a new group practice. Here, guilt gave way to gratitude. "My partners were very sympathetic," says Reed. "They were willing to give me as much time off as I needed. As it was, I stayed home only six weeks." Reed had another baby in 2000, and again her partners cheerfully picked up the slack.

Now numbering five female pediatricians with another coming aboard in July, Reed's practice has come to be known locally as the "mom group." Then again, a mom-friendly climate helps account for the practice's growth. "We know it's a given that we'll have babies," says Reed. "It's also a given that we have a life outside medicine."

Write that down in your personnel manual.

Will the US and Papua New Guinea catch up with the rest of the world on paid maternity leave?

Many doctors like to say that the United States has the best health care system in the world. When it comes to paid maternity leave, however, our country is at the bottom of the list.

The US is one of six nations that neither give working mothers paid maternity leave nor require employers to do so, according to a 1998 survey by the International Labour Organization, a United Nations agency. The other five countries are Lesotho, Swaziland, Australia, New Zealand, and Papua New Guinea. In contrast, European countries give working mothers 70 to 100 percent of their wages for leaves ranging from eight to 26 weeks. The government foots the bill in every country except Switzerland, where employers pay.

The only thing Uncle Sam guarantees is that a new mom at a company with at least 50 employees can stay home for up to 12 weeks and still keep her job. Family leave laws in 10 states and the District of Columbia grant similar rights—some more generous, some less—to women at smaller companies, according to the Family and Medical Leave Handbook from Thompson Publishing Group (www.thompson.com).

In a handful of states, though, new mothers receive a taste of European-style largesse. California, Hawaii, New Jersey, New York, and Rhode Island offer residents short-term disability benefits, and routine maternity leave qualifies as a disability, as does any leave ordered by a doctor during pregnancy. Rhode Island pays the richest benefit—a maximum of $504 a week. (Web site addresses for these state programs are listed below.)

More states may put a check in a new mother's hands. The federal Department of Labor ruled last year that states are free to use their unemployment insurance funds to pay for up to 12 weeks of maternity leave. Lawmakers in more than a dozen states have proposed legislation to that effect. However, several business organizations, including the US Chamber of Commerce, have sued in federal court to oppose the labor department decree, warning that states that go this route will either reduce benefits for the unemployed or raise taxes.

Web sites for state disability insurance programs:

California
www.edd.cahwnet.gov/fleclaim.htm#di

Hawaii
homepages.uhwo.hawaii.edu/clear/laws2.html#TDI

New Jersey
www.wnjpin.state.nj.us/OneStopCareerCenter/OtherInformation/DivVocRehabServices/tdi.html

New York
www.wcb.state.ny.us/content/main/workers/wc06003.htm

Rhode Island www.det.state.ri.us/webdev/tdi/tdihome.htm

When granting family leave, know when the meter starts

If you don't understand a fine point of the federal Family and Medical Leave Act of 1993, you may end up giving an employee more time off than you bargained for.

The law entitles a qualifying employee up to 12 weeks of unpaid leave after childbirth. The employee has the right to take any accrued vacation or sick time during this period. If she decides to use vacation or sick time, you must designate it as FMLA leave beforehand, or as soon as you know her leave has commenced. (She may have given birth on Sunday, and not reported to work Monday.) Furthermore, you must notify the employee that you're counting her paid leave toward the 12 weeks allowed under FMLA.

The notification step is critical, because it determines when the 12-week FMLA meter begins ticking. If you don't provide notification, you could run into problems, says practice management consultant and attorney Janice Cunningham.

"I've seen this happen in a few practices," explains Cunningham. "A woman who's just had a baby uses six weeks of vacation and sick time, then informs her employer that she's claiming 12 additional weeks of unpaid leave under FMLA. The employer never officially acknowledged that the paid leave counted toward FMLA. So the employer is obligated to give her the extra 12 weeks off."

Don't think you can retroactively declare any time off as FMLA leave, either. The federal law explicitly prohibits this sleight of hand.

Doctors in states that have passed their own versions of FMLA should pay close attention to any notification provisions stipulated in those laws, adds Cunningham.

 

Robert Lowes. Maternity leave policies that really deliver. Medical Economics 2001;13:61.