Lessons from an Action Packed Baby Shower

March 05, 2013

What’s the new craze for baby showers?  They’re not co-ed and action-packed, based on the party I attended this past weekend for my stepson and daughter-in-law’s first child.  The baby shower was held at the bowling alley, and after presents and cake, we all bowled for an hour, with the exception of the mother-to-be, since she already has a bowling ball size belly. 

As part of the gift-giving, the invitation asked that each attendee provide a few words of wisdom for the expectant parents, so I couldn’t resist giving some advice about checking on employer-provided benefits.  You can also provide your workforce with some financial wisdom on maternity/paternity benefits:

1.  Parental Leave Policy:   Maternity leave is usually created from a variety of benefits that include sick leave, vacation, holiday time, personal days, short-term disability and unpaid family leave time.  The Family and Medical Leave Act (FMLA) allows eligible employees to take 12 weeks of unpaid job-protected leave with continued group health insurance under the same terms and conditions as if the employee had not taken leave.

2. Health Insurance Coverage:  As long as the newborn baby is enrolled within 30 days of birth, coverage should be effective as of the baby’s birth date, and the baby cannot be subject to a preexisting condition exclusion.  This is based on the Newborns’ And Mothers’ Health Protection Act Of 1996.

3.  Dependent Care Flexible Spending Account (DCFSA): If the new mom will be returning to work, daycare may be necessary.  Through payroll deduction, up to $5,000 can be set aside pre-tax in a DCFSA to pay for qualified daycare expenses as long as the daycare provider is willing to provide their tax ID #.  However, if the employee is in the 10 or 15% tax bracket, it may be more beneficial to avoid the DCFSA and take the Child and Dependent Care Credit instead.

New parents will probably also be interested in eventually learning more about saving for college once the baby has arrived and they’ve mastered the tasks of feeding and diapering their new arrival.  Dealing with college costs can cause a conflict when employees are trying to figure out how much to set aside for college vs. their own retirement, so make sure to include college planning as a component to your workplace retirement education program.