Congratulations! You have a new baby and now it’s time to add the little bundle of joy to your Covered California health plan. Unfortunately, similar to other quirks of the Covered California system, adding a new dependent, if not done properly, could result in a gap in coverage for the baby or loss of the family’s contribution toward their deductible and costing them double the maximum out-of-pocket amount.
New born babies covered for 31 days
In general, most ACA health plans will extend coverage to a new born or adopted child for the first thirty-one days under the mother or father’s health plan. But you should always check your plan’s Evidence of Coverage document for the specifics.
From Blue Shield EOC on eligibility
However, if the Subscriber qualifies for a Special Enrollment Period as a result of a birth, adoption, guardianship, marriage, or Domestic Partnership, and enrollment is requested within 60 days of the event, the Subscriber may request enrollment for those Dependents within 60 days. The effective date of enrollment will be as follows:
1) For the case of a birth, adoption, placement for adoption, or guardianship, the coverage shall be effective on the date of birth, adoption, placement for adoption or court order of guardianship.
Covered California system inherent date problem
Even when adding the dependent through Covered California the effective date is supposed to be the date of birth or adoption. But there is no mechanism within the system to make the date of birth the effective date if you are adding the child to an existing family plan. The family plan must always start on the first of the month.
Covered California explanation
If you have or adopt a child or place a child in adoption or foster care, and you use a special enrollment period, your coverage starts on the date of the birth, the adoption or the placement for adoption or foster care.
You have 60 days from the date on which the qualifying life event happens to enroll in a Covered California health insurance plan or change your existing Covered California plan. For example, if you have a child on June 1, you have until July 31 to notify Covered California, complete an application for your new child, choose a health plan and pay for it. If you do not get health coverage for your child, you may have to pay a tax penalty.
If 60 days pass and you do not sign up for health coverage, you will have to wait until the next open enrollment period, which will be in the fall of 2014. (http://www.coveredca.com/faqs/special-enrollment/)
Baby gap is not a store
The enrollment window and date issue become a problem if the child is born after the 15th of the month and you want coverage to start the first of the next month. The soonest the new plan can start for the entire family is the first of the following month. If the baby is born on the 16th of June, the special new born/adoption coverage ends 31 days later on July 17th. This is two weeks before a new health can begin which would be August 1st. That creates a “baby gap” in coverage. In order to avoid this lapse in coverage you have to call Covered California and have the staff manually enter the new household member. Only the staff at Covered California can override the CalHEERS date issue problem. They have the ability to generate a new health plan enrollment after the 15th of the month with an effective date of 1st of the next month.
Delayed enrollment can be costly
While the ACA rules allow for a sixty day window from the date of qualifying event to enroll in a plan, there could be billing and claims issues if the changes aren’t made as soon as possible. Technically, waiting to add a new born or adopted child on the 60th day could result in three total months under the original plan and the loss of any applicable Advance Premium Tax Credits to lower the premium. However, the increase in tax credit for the health insurance should be regained when the family files their 2014 federal tax return and the additional dependent is included in the calculations.
Adopting and births can result in Enhanced Silver coverage
The addition of the child may also trigger the eligibility for an Enhanced Silver Plan with reduced deductible, coinsurance and copayments. If the family waits until the last minute to add the new dependent those savings will be lost for the previous months. Another scenario is that adding the new child to the household could make all the children, if not the whole family, eligible for Medi-Cal. The inclusion of the children in the Medi-Cal system reduces the monthly health insurance premium as only the adults will be in a private health plan.
New child, new health plan
For health insurance bought off the exchange, not through Covered California, it is a simple matter to add the new born or adopted child to the family plan. The health plan will not change. With Covered California the qualifying event of a new child and subsequent Special Enrollment Period necessitates that family re-select a new health plan for the family and dental plan for the children. While this may sound wonderful for families who want to choose a different carrier, a new plan means re-setting the deductible and amounts applied to meeting the annual maximum out-of-pocket back to zero. In other words, the family loses any credit toward meeting their deductible and the family cap on health care expenses.
Caution when changing health plans
In the worst case scenario, the mother meets her deductible because of the expenses of delivering a baby in the hospital. The family then adds the baby to the health plan in which they select a different carrier. They then learn that none of the medical expenses they paid to meet the old plans deductible roll-over into the new plan. The whole family must start with zero dollars accumulated toward meeting any deductible and coinsurance. It’s possible that if they had stayed with the old plan and the mother, and possibly the family, met the annual maximum out-of-pocket amount, they wouldn’t have to pay a dime for covered health care expenses for the rest of the year.
Wrong enrollment could double costs
Under the Covered California Special Enrollment Period it is possible that an individual or family that makes the wrong selection will actually have to pay double the maximum out-of-pocket amount during the year. Covered California isn’t really giving any guidance on how to avoid this potentially devastating financial decision for a new family. – The ACA was supposed to protect people, not put them in double jeopardy -.
New health plan may not honor your health care expenses
It is up to each of the health plan carriers to determine if they want to roll-over any accumulated health care expenses on the member’s part into the new plan. Several of the health plans have indicated that if the family stays with the same type of plan from the same carrier, they will honor the accrued family expenses toward meeting deductibles and the maximum out-of-pocket amount. Some health plans have said they may not be able to do this if the members move between a PPO and an HMO. And there will be no carry-over of accumulated health care expenses if you move from one carrier to another (e.g. Blue Shield to Kaiser, Blue Cross to Health Net or any such combination.)
Health Net roll-over policy
If the move is from a PPO to a PPO OR from a HMO to a HMO then the
deductible/OOPM will rollover. However, if between HMO/PPO it does not. Note some plans don’t have deductibles.
Don’t forget to renew the dental plan
Also important is renewing the children’s dental plan. With the Covered California SEP, the Pediatric Dental must also be re-selected. If you are adding a new baby, you’ll have to pay for that infant, even though it is doubtful he or she will even see the dentist in the first year of life.
Always consider the following during Special Enrollment Period
- Add the baby or newly adopted child as soon as possible to the health plan
- If you need the coverage to start the first of the month, you’ll need to call Covered California to override the date problem
- Be careful when switching health plans, you could lose all the money you’ve paid toward your deductible and meeting your maximum out-of-pocket amount.
- Don’t forget to renew the Pediatric Dental Plan.