Pregnancy complicates health insurance options

By Insure.com - Last updated: Aug. 28, 2012

Federal law bars employer-sponsored group health insurance plans that cover maternity from considering pregnancy a pre-existing condition. This means that if you change group health plans while you're pregnant, your new group health insurer (as long as it covers maternity) can't deny claims related to your pregnancy. But a variety of loopholes means pregnant women could still lack insurance coverage for their prenatal care if they don't do some careful planning.

Under a federal law known as HIPAA, group health plans cannot consider pregnancy a pre-existing condition and cannot exclude coverage for prenatal care or your baby's delivery, regardless of your employment or health insurance history, but only if the plan already includes maternity coverage. This holds true whether you are the primary insured or a dependent. So, health insurance plans can't deny you coverage when you go from one job to another and switch employer-sponsored group health plans. See HIPAA: Your rights to health insurance portability.

Unfortunately, HIPAA applies mainly to group health plans. So if you move from one individual health plan to another individual health plan or from a group plan to an individual plan, you might not get pregnancy coverage at all, you might have to sit out a waiting period, or, if you are offered insurance that covers your pregnancy, you might find it's very expensive. However, this all changes under the Affordable Care Act.

Beginning in 2014, new individual health insurance plans and employer-sponsored plans will not be able to refuse you coverage or charge you higher premiums for being pregnant or having other pre-existing conditions.

But for now, you’ll need to consider these potential options.

The COBRA option

Even if you are eligible for insurance coverage under HIPAA, you may have to sit out a waiting period. For example, say you're pregnant and have group health insurance and then switch jobs. Say your new group health plan has a standard one-month eligibility period for all new employees before it begins. The new health plan isn't required to cover your pregnancy until the plan takes effect. While that might not be a problem if you're early in your pregnancy and you don't mind paying for a prenatal visit or two out of your own pocket, it could be trouble if you're in your eighth or ninth month and have no coverage, even temporarily.

Is there anything you can do to bridge the gap between group plans? Yes, you can enroll in your former employer's COBRA plan to cover any interim period between health plans. Know your COBRA rights. However, employers aren't required by federal law to offer COBRA unless they have at least 20 employees. And you'll also wind up paying more in premiums: up to 102 percent of the full premium because of administrative fees. Some states have so-called "mini-COBRA" laws that apply to small employers. (See state-specific laws for COBRA.)

The individual health insurance option

If you can't get COBRA, and if you've had at least 18 straight months of group coverage, you might be entitled to buy a "guarantee issue" individual policy, which means the insurance company cannot turn you down. But states have leeway in these laws, and some might force you into a high-risk pool, where the exorbitant premiums could be more than you'd pay on a couple of prenatal visits anyway. Here's more on high-risk health insurance pools.

If you are already pregnant, it will be impossible for you to buy individual health coverage on your own. This is because health insurance companies know you have a condition that's going to require treatment and claims payments. In a worst-case scenario, such as a difficult birth, treatment is very expensive.

Government assistance

Medicaid is another option, but only if you meet the low-income requirements.

Some women might also qualify for WIC — the Special Supplemental Nutrition Program for Women, Infants, and Children run by the federal government. It provides nutrition counseling and access to health care services to low-income women who are pregnant, breastfeeding, and non-breastfeeding postpartum, and to infants and children up to age 5 who are at nutritional risk. To qualify, women must meet income guidelines, a state residency requirement, be individually assessed as a "nutritional risk" by a health professional, or already qualify for certain other low-income programs, such as Medicaid. For more information, visit WIC online or call your state insurance department.

Employers have little responsibility to pregnant women

Bear in mind that there's no legal requirement that an employer offer a health plan at all. However, if your employer opts to do so, the health plan must comply with the Pregnancy Discrimination Act of 1978. This law requires employer-sponsored plans to cover pregnancy-related expenses the same way they cover other medical conditions. The law applies to employers with 15 or more employees.

Some states also have laws mandating health plans to cover maternity and prenatal care. However, state laws don’t apply to employers that “self-insure.” Companies that self-insure set aside money to cover employees’ medical costs, rather than purchasing a health plan from an insurance company. Most very large companies self-insure.

Companies that self-insure are governed by federal Employee Retirement Income Security Act (ERISA).

These plans must also comply with the federal HIPAA law when it comes to pregnancy. A self-insured employer that offers group health benefits, if it includes maternity coverage, cannot exclude a new employee's pregnancy under a pre-existing condition clause. However, the new employee will have to sit out any routine waiting period. Here's how to make claims under a self-insured health plan.

The PCIP alternative

Until the maternity provision of the Affordable Care Act takes effect in 2014, the Pre-Existing Condition Insurance Plan (PCIP) program (part of the 2010 Affordable Care Act) may be an option for you if you become pregnant. To qualify for coverage, you must be a U.S. citizen or a legal resident, have a pre-existing condition. and have been uninsured for the previous six months. This program covers primary and specialty care, hospital care and prescription drugs.

PCIPs are administered by either the U.S. Department of Health and Human Services or your state. Programs vary from state to state, so find out your state’s requirements to establish eligibility. Use the PCIP map by clicking on your state to learn about specifics including deductible, premium and co-payment rates.

Planning is vital to ensure coverage

If you're planning to become pregnant, make sure you have health insurance first. If you're pregnant and thinking about switching jobs, be aware that you might have to go a month or two without insurance, and make sure your next health plan covers pregnancy. Check with the company's employee benefits administrator to find out.

Also, if you haven't already studied your employer's policy regarding pregnancy leave and other pregnancy-related benefits, now is the time to do so. Here are the basics of pregnancy leave.

It's illegal for a potential employer to ask a woman in a job interview about her family plans, but obviously if you ask pointed questions about maternity coverage you'll give yourself away. Still, you could ask for a copy of the company's benefits handbook and read up on maternity coverage. (Just make sure the handbook contains the most recent plan information available.)

Unmarried pregnant women take note: Despite the movement afoot in some communities and businesses to offer coverage to "domestic partners," chances are you won't be added to your boyfriend's group health plan simply because you're having his baby; there's no legal requirement to do so, and it's at the discretion of the employer.

Once the baby is born, however, the unmarried father should be able to easily add the baby to his group health plan, although he might have to own up to his paternity in writing first. And a woman with individual health coverage should have little problem adding her baby to her plan — but the premiums will increase.

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