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Having a baby is a
life-altering event. Lacking the proper health and life insurance can
be, too. If you recently had a baby or are expecting, now is the time to examine your new insurance needs.
You have a new dependent who benefits from your
wages. As your baby's main — or sole — financial support, you need to
insure your potential future income against losses in the event of your
death.
Calculating much life insurance you need to buy is
the first crucial step. Financial advisors suggest a five-step analysis
that adds up your short-term needs (final expenses, outstanding debts
and emergency expenses), long-term needs (such as mortgage payment),
education (dependents' college tuition), and family maintenance (child
care, food, clothing, utility bills, insurance and transportation),
then substracting assets such as savings, stocks, bonds, mutual funds
and other life insurance. Insure.com's Life Insurance Needs Estimator Tool can help.
Get instant life insurance quotes from Insure.com.
Typically you'd name your spouse as the beneficiary
on your policy. If you're divorced, you'd likely still name your
ex-spouse because they would care for your children in the event of
your death. Don't name your minor children as beneficiaries: They
cannot receive a life insurance benefit until they're age 18 unless
you've set up a trust to hold the proceeds.
| Most
health plans will not include a baby on your health insurance policy if
he or she is not added within the first 30 days of birth. |
Soon after your baby's birth, you should apply for
the child's Social Security number. You'll need to list this number on
your tax return in order to take the dependency exemption for the baby.
Most hospitals make the arrangements, but if yours doesn't, call the
Social Security Administration at (800) 772-1213. Health insurers will
also want your baby's Social Security number as soon as it's issued.
You might have as little as 30 days following your
child's birth to add him to your group health insurance plan. If you
miss this deadline, your health insurer might require you to wait until
the next annual "open enrollment" period before you can add your baby
to your health insurance plan. If your employer offers more than one
choice of health insurance plan, open enrollment is a good time to
evaluate your coverage and see if it meets your expanded family's needs.
If you don't have health insurance through work,
can't afford an individual policy and don't meet low-income rules for
Medicaid eligibility, you may be a prime candidate for your State Children's Health Insurance Program (SCHIP).
The Robert Wood Johnson Foundation reports many children who qualify
for state programs that provide health coverage to low-income families
are not covered because their parents don't know about these programs.
Your state insurance department can tell you if you qualify for such
coverage.
Even if you didn't have any problems with health
insurance during pregnancy, there are many issues that can complicate
your health insurance situation should you decide to have another child.
While federal law prohibits most group health
insurers from denying claims related to your pregnancy, there are still
a variety of loopholes that might mean you can still find yourself
without health insurance coverage for your prenatal care and your
baby's delivery.
No individual health insurer will issue you a
health insurance policy if you are pregnant when you apply — even if
you're not aware you're pregnant when you submit the application. So if
you happen to lose your group health insurance, don't assume you can
purchase an individual health insurance policy if you become pregnant
again. Make sure you apply — and have your policy in hand — before you conceive.
| No individual health insurer will issue you a health insurance policy if you are pregnant when you apply. |
Bear
in mind that individual insurers don't have to cover pregnancy at all,
and if they do they might impose a 12-month waiting period after your
health insurance kicks in before they will pay for pregnancy-related
claims. As for group health insurance, there's no
legal requirement that your employer offer health insurance at all. But
if your employer opts to offer coverage, your health plan must comply
with any state laws that mandate maternity coverage.
Be careful if you switch jobs during your next
pregnancy. Don't assume you'll automatically be able to pick up
coverage. While the federal Health Insurance Portability and
Accountability Act (HIPAA) says group health insurance plans can't
consider pregnancy a pre-existing condition and can't exclude coverage
for prenatal care or your baby's delivery, HIPAA's rules don't cover
everyone. HIPAA applies to every employer group health plan that has at
least two participants who are current employees, including companies
that are self-insured. If you move from one individual plan to another
or from a group plan to an individual plan, you might not get pregnancy
coverage at all, or you might have to sit out a waiting period.
Even if you are eligible for health insurance under
HIPAA, you might still have to sit out a new employer's mandatory
waiting period for all new employees that can range anywhere from one
to three months. Being uninsured is a risk any time, but especially
when you are pregnant. If your new health insurance has not yet
started, you'll have to foot the bill yourself.
One way to bridge this health insurance gap is to
enroll in your former employer's COBRA health insurance plan. If your
former employer has at least 20 employees and offers group health
insurance, then it must offer you the chance to continue your health
insurance coverage under COBRA for up to 18 months. Some states also
have "mini-COBRA" laws that apply to smaller employers.
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