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

The Affordable Care Act (ACA) improved health insurance coverage for young adults, but beware of the pregnancy loophole. 

The ACA allows young adults up to age 26 can stay on a parent's health plan. Children up to 26 can go a parent's 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.

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 must cover a wide range of preventive-care services without charging a deductible, copayment or co-insurance. 

All individual and small group health plans are required to cover pregnancy and maternity care services, which are part of the so-called 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 preexisting 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.

So, you're 25-year-old daughter can be on your health plan, but her child -- your grandchild -- cannot. 

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.

Consider shopping for a new health plan

Needless to say, the pregnancy loophole can cause major headaches for expectant mothers. If you are pregnant and without coverage for maternity services or childbirth, consider these options:

  • An ACA exchanges plan. You can try to get an individual plan that covers your pregnancy. 
  • A Medicaid or Children's Health Insurance program plan. This can be an option depending on your income and state. Three dozen states expanded Medicaid, which raised the income restrictions on Medicaid. 
  • COBRA could be possible if you or your spouse recently became unemployed. 
  • Short-term health plan. These low-cost plans are an option, but make sure to read the fine print. Many short-term plans don't cover maternity services. 
  • Once the baby is born, you qualify 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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1 Responses to "Pregnancy loophole: Coverage surprises if you're on a parent's health insurance plan"
  1. Rita Anderson

    I am under my parents health plan at age 24 and recently found out I'm pregnant. Then I found out that maternity services are not included on my parents policy since I'm a dependent. Now I have to pay for all services including doctor appointments, ultrasounds, hospital stay? How is this fair? I don't know what to do and how I'll pay for this.

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