What Do We Do About Health Insurance After Having A Baby?
Bringing a new baby into the world is an honor and a joy, so first off we want to congratulate you on that. Within those first 30 days there are big decisions to be made and what we’re going to do is give you a look at how choosing the right California health insurance after having a baby can be simpler than you might expect. The key to being empowered to make the best decision for your family is understanding your options, knowing what steps to take, and that’s what SPF Insurance will help you do. Let’s clear away the confusion now, and begin clarifying how today’s California families can choose the right insurance for their infants.
Health Insurance Choices Families Face Today in California
Those who get health insurance through their employers face decisions when annual enrollment periods roll around, and when they are faced with major life events such as the birth of a new baby. The problem is deciding which plan they should select and how they should cover their family. Many companies today are increasing costs for employees who want to add their family to the company plan. They do this by increasing deductibles and co-pays, and by increasing the amount the employee pays to cover adding dependents to the group plan. That’s why it’s important that you understand how to make the best choice for your family.
Does it make sense to put your baby, or your spouse and children, onto your group health insurance plan? Would it be smarter to get them an individual health plan instead? These are the kinds of questions SPF Insurance is here to help you answer, and we believe you can make the best decision once you know the trade-offs of choosing either of these options. Before we start, there are a couple of things you need to know about group health insurance plans, so we’ll cover those next.
Understanding Enrollment Periods for Group Plans
The occurrence of major life events will create special enrollment periods for employees with group benefit plans. Aside from the annual enrollment period, group health insurance plans also recognize when a person gets married, when they get divorced, when there is a death in the family, when an adoption occurs, and when a new baby is born. At each of these points, you have the option to change portions of your group insurance benefits, but costs may rise or fall.
In this case, we are discussing the arrival of a new baby, and while the mother’s insurance will cover the cost of delivery and post-partum care for her and for the infant, within the first 30 days of the baby’s life it will be time to decide if it should be on the mother’s insurance or the father’s. Whether or not the parents are married, the birth of a baby represents a special enrollment period where they must be accepted by either insurance plan.
Four Tier Pricing in Small Group Health Insurance
Small group health insurance in California typically uses a 4 tier pricing system. The first tier is insurance for the individual employee only. The second tier is for adding a spouse, or sometimes a single individual such as a child or domestic partner. The third tier is for the addition of a child or children. Most group plans have a single price for one child or multiple children, and this can be important in the decision. The fourth tier, often referred to as “family”, is the cost to add the spouse and all children to the plan.
Anthem Blue Cross PPO 30 Copay and Blue Shield Local Access+ HMO Premier 45 plans are examples of small group plans with 4 tier pricing. We’ll use these in the examples in the next section.
How a Family Can Choose Between a Group Plan vs. an Individual Plan
Choosing between group plans and individual or family plans is crucial. To understand this, let’s use an example family. We’ll say the family is a couple living in Long Beach, California and that both are age 40. They have 2 children, one being a newborn baby within the last 30 days, and the other is a 4 year old. One spouse has group insurance through their employer and the other does not. The employer pays 100% for the employee coverage, and 50% of the cost to add the employee’s dependents (spouse and kids). Let’s compare the choices they could make.
A group plan such as Blue Shield of California Local Access+HMO Enhanced 45 will cost the employer $318 per month, for a single employee. If our couple adds the spouse, the total cost to add the spouse is $401 and the employer pays half, so the employee will pay $200.50. If our couple decides to just put the children on the group plan, and not the spouse, the cost to add the kids is $274, so the employee would pay $137 of that cost. If the couple decides to put the whole family on the group plan, then the total cost would be $662 per month, and the employee would pay $331.
From this example you can see that the employer contribution to the dependent coverage cost is a very important piece of information in this decision. The smaller the employer contribution is, the more our couple will have to pay to put the family onto the group health insurance plan. This may make an individual or family plan most cost effective.
Similarly, the Anthem Blue Cross PPO $30 Copay plan costs the employer $567 per month for a single employee. Adding a spouse adds $599 per month, so the couple pays $299.50. Adding a child or children to the group plan costs $312 per month, and the couple would pay $156. To add the whole family, the price is $926 per month, so the family would pay $463 per month.
When you compare these group examples with an individual and family health insurance plan such as the Health Net Advantage 3500 PPO, you see a sharp difference in costs. To put the spouse onto the Advantage PPO plan would cost only $85 per month, and for the spouse plus both children the cost is $201 per month. As you can see, our example family would fair far better financially by not opting for the group plan and choosing an individual and family plan instead.
For your situation, you will need to do a similar analysis. So we outline the steps to follow next.
Steps You Can Take to Make the Best Decision for Your Family
For your new baby, there are a few steps you should take to choose the right insurance option. The first step for those with group health insurance through their employer is to speak with someone in the company’s HR department. Find out how much it will cost you to add the baby to your company insurance plan, and what forms are necessary if you make that choice.
Next, get a quote on all the individual and family health plans from the major insurance companies. SPF Insurance can provide this to, or you can get this information from our health insurance quote engine on your own. Next pick the individual and family plans that best fit your family’s healthcare needs, by following the Five Step Process outlined on the SPF home page. Compare the costs and the benefits between these options and your group health plan. Make sure you determine if the group plan fits your needs adequately, or if it is much richer in benefits. The last step is to decide what is most important, price or benefits. This will help you determine which is the best for you and your family.
Health Insurance You Choose for Your Baby Makes a Lifetime of Difference
The first 18 months of your child’s life will involve many Wellness visits to the doctor to monitor the early stages of their growth. This is a crucial period and is generally the most costly, too. However the quality of care they receive can set them on a good course and help keep them in good health. That’s why it’s important to find the right health insurance plan to give them the best care while also meeting your family’s budget guidelines.
SPF Insurance is here to help you navigate the health insurance maze in California, and if you would like to speak with someone about your specific situation, we would be happy to offer our expert advice. Get in touch with one of our advisers who can personally assist you determining the best fit for your family.
Leave a comment below to let us know if this helped you, or if we need to add something else.