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Pregnancy loophole: Coverage surprises if you're on a parent's health insurance plan

Since the federal health care reform law was passed, young adults up to age 26 can stay on a parent's health plan, regardless of whether they live away from home, are out of school or are married. The U.S. Department of Health and Human Services estimates 1.1 million young women have health insurance coverage as a result of the provision.

The Affordable Care Act changed pregnancy coverage rules

Most people who have maternity coverage get it through an employer-sponsored plan. Under the Affordable Care Act, new health plans, or those that have been changed substantially since the law was passed, must cover a wide range of preventive-care services without charging a deductible, copayment or co-insurance. 

Starting in 2014, all individual and small group health plans are required to cover pregnancy and maternity-care services, one of 10 "essential benefits." Among those services are a variety of pregnancy-related screenings, such as testing for gestational diabetes, as well as breastfeeding supplies and support. Federal law prohibits those plans from denying coverage or charging higher premiums for people with pre-existing conditions, including pregnancy.

Maternity services and childbirth are likely not covered if you're a dependent

However, the preventive-care requirement does not include an exception for dependent children. And although job-based health plans must cover pregnancy-related care for employees and their spouses, federal law doesn't require the plans to extend maternity coverage to dependent children.

Regardless of whether maternity is covered for a dependent child, don't expect to be able to add the grandchild to the health plan. Most employer-sponsored health plans don't extend coverage to grandchildren unless the employee is their legal guardian.

Grandfathered plans -- those plans that existed before March 23, 2010, and have stayed essentially the same -- don't have to fully cover preventive care, but some do anyway. See Is your plan 'grandfathered'? You may be getting gypped.

Andrea Friedman, director of reproductive health programs for the National Partnership for Women & Families in Washington, D.C. says the organization wants to hear from women who have been denied maternity benefits through their parents' health plans.

"With so many problematic exclusions being removed, the few loopholes that exist will be that much more apparent, and there will be that much more pressure on insurers to make the good choice," Friedman says.

Consider shopping for a new health plan

If you are pregnant and without coverage for maternity services or childbirth, consider these options:

  • If there is an open enrollment window during your pregnancy, you can research and sign up for a health plan.
  • If your income level qualifies you, you can apply for Medicaid or CHIP any time during the year.
  • If you or your spouse recently became unemployed, you could check your COBRA eligibility.
  • You can compare the top health insurers and shop for a short-term health plan.
  • Once the baby is born, this qualifies you for a Special Enrollment Period (SEP). This means that after you have your baby you can enroll in a Marketplace health plan even if it’s outside the Open Enrollment period. When you enroll in the new plan, your coverage will be effective from the day the baby was born. Keep in mind that maternity services would not be covered.

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