People often say a new baby should come with a care manual. The same can be said for insuring the child. To plan for newborn healthcare benefits, parents need a baby health insurance playbook.
My job entails designing employee benefits programs for employers, and I applied this expertise three years ago when my wife and I were expecting a baby.
Pregnancy, childbirth and making the best benefits decisions around the new addition to the family can be overwhelming experiences. Facts matter, so be sure to attend your employer’s open enrollment meeting when insurance options are typically presented by a carrier representative.
If you need to make baby-related insurance coverage decisions before or after the open enrollment season, consult your benefits manager in your company’s human resources department.
Here are my recommendations for how to plan for newborn healthcare benefits:
- Before the pregnancy—understand your insurance options.
Beyond typical medical and prescription drug benefit plans,
there are several other benefits that can help cover medical care during pregnancy:
- Short-term disability, which covers maternity leave
- Long-term disability, which may be needed if a doctor orders bed rest
- A flexible spending account (FSA), which can be used to cover childcare and medical costs tax-free
- A health savings account (HSA), which can also be used to cover medical expenses tax-free
In addition to the above benefits, you may want to consider enrolling in a hospital indemnity plan, which provides a cash payment for every day of hospitalization. It’s important to note that you would need to elect this coverage before the pregnancy in order to be eligible for it.
- During the pregnancy—understand prenatal healthcare coverage.
What’s considered preventive prenatal care, and what’s covered throughout a pregnancy? Pregnancy entails many typical doctor’s visits. Insurance will often cover routine appointments and tests, such as blood tests, basic genetic screenings, ultrasounds, a glucose test and stress test. But increasingly, doctors offer additional genetic screening and diagnostic tests that may not be covered under insurance. Connect with your insurance carrier to understand exactly what’s covered and what is not.
- After the childbirth—understand how to add a newborn to the benefits plan.
After a baby is born, they’re not automatically added to health insurance. In fact, there may be up to a 30-day lag between the time a baby is born and when they are added to a policy. As if you don’t have enough to juggle, you may have to submit claims following doctor visits for the first several weeks of your baby’s life. It’s my experience that new parents may not know this detail and could inadvertently pay for doctor visits that insurance covers.
- Review provider bills carefully.
In addition to getting a baby covered and filing provider claims, review all hospital and medical bills to ensure they’re accurate. Does your employer provide benefits advocates who can help you understand bills and make sure you’re not overpaying for care? Benefits advocates can reach out to the health insurance carrier to understand what is covered and what’s not and untangle any issues.
- Anticipate childcare needs.
If you’re like me, you were making childcare arrangements long before your baby arrived. Of course, the COVID-19 pandemic has contributed to the closure of daycare facilities, so there’s that to consider, too. But one can anticipate that the pandemic will end and you’ll need childcare going forward. Does your employer offer childcare onsite or have relationships with childcare facilities? These services would be discussed during open enrollment, but if you’re not sure about the options, check with your human resources department.
Also, make sure you understand taxes involved in childcare services, especially if you employ a nanny. If you plan to use a dependent care FSA to pay for childcare, avoid contributing more than you’ll use in the baby’s first year. Remember, it’s common for daycares to have waiting lists, and dependent care FSAs are use-it-or-lose-it accounts, which means they don’t roll money over into a new year.
Bringing home a new baby is one of the most joyous times in a person’s life, but it’s also stressful and overwhelming. Knowing what you’re facing, insurance-wise, can make things easier.