March 29, 2014 8:32 p.m. ET
Ryan Born, 31 years old, and his wife, Kristin Born, 30, of Onalaska, Wis., have separate health-insurance plans—each enrolls through work. So when the couple welcomed their first child, Harrison, in December, they needed to decide whose plan would best accommodate him. It was their first instinct to add him to Ms. Born's Blue Cross Blue Shield plan through her job as a Stewartville, Minn., public-school teacher, because that plan seemed the more comprehensive and economical of the two.
But they would have been better off actually crunching the numbers, Mr. Born says. "We should have done a lot more cost comparison."
Three months after Harrison was born, the couple realized that a Wisconsin Physicians Service Insurance family plan through Identity Works, the marketing-and-technology firm at which Mr. Born is a partner, was the better option. They switched his coverage, which was something of a hassle, Mr. Born says.
Between picking out tiny clothes, setting up the crib and managing the in-laws, new parent s have plenty to think about. But they can't afford to neglect health insurance for Junior, says Doug Whiteman, insurance analyst at Bankrate.com.
First things first, Mr. Whiteman says: Make sure you sign up your infant for coverage within 30 days of birth. A federal rule requires insurance providers to cover children signed up within 30 days of birth retroactively to day one. Some plans may provide more flexibility.
If each spouse has his or her own insurance provider, calculate what premiums, deductibles and copays would look like for the respective family plans, he says—and it's best not to wait until the baby arrives. (Don't be surprised: Your premiums will almost certainly go up from your existing rate.)
Then promptly notify your provider of choice. You can typically do so outside of the open-enrollment window by declaring a life event for the birth of your child. If you fail to notify your insurer in a timely fashion, you could face an uninsured-child penalty under the Affordable Care Act of $47.50 or 1% of your income, whichever is higher, this year. Plus, making sure your child is insured right away is simply the smart thing to do.
"Health insurance for your kid is nonnegotiable," says Samantha Attwood, 23, of Arlington, Va. Ms. Attwood, who has a 15-month-old son, also named Harrison, says she is grateful for the Aetna AET +0.94% Aetna Inc. U.S.: NYSE $74.10 +0.69 +0.94% March 28, 2014 4:00 pm Volume (Delayed 15m) : 1.56M AFTER HOURS $74.10 0.00 0.00% March 28, 2014 4:27 pm Volume (Delayed 15m): 5,972 P/E Ratio 13.70 Market Cap $26.88 Billion Dividend Yield 1.21% Rev. per Employee $973,893 03/14/14 Aetna Terminates Agreement in ... 02/24/14 Health Law Already Has Impact ... 02/23/14 Palliative Care: Patients and ... More quote details and news » family coverage she has through her job at the Nature Conservancy. She had Harrison enrolled in the plan by the time he was 10 days old. Health care for herself and her son costs about $600 a month, she says, split about evenly between premiums and out-of-pocket costs.
New parents should know that, while preventative services like "well checkups" are traditionally covered in full under family plans, office "sick" visits typically aren't. So overly neurotic parents—or those with frequently ill infants—could quickly rack up a hefty out-of-pocket tab. If you think you'll be making many trips to the doctor, consider opting for a plan with lower copayments, Mr. Whiteman says.
Also, be prepared to pay for the visits upfront. Mr. Born notes that his son's pediatrician recently started requiring copayments at check-in, as opposed to sending a bill in the mail. And, depending on your plan, he says, some services, like immunizations, might not be covered.
If yo u're expecting a baby late in the year, pay attention to the plan's deductible. Amy and Mark Sandau, both 29, of Cedar Rapids, Iowa, nearly learned this lesson the hard way a few years ago. Ms. Sandau, who is Mr. Born's sister, gave birth to a daughter, Madelyn, who was a "micropreemie," weighing only 1 pound, 15 ounces. Madelyn required an 11-week hospital stay that cost over $1,000 a day, Ms. Sandau says. "She was a million-dollar baby," she says.
Ms. Sandau says her family was lucky in that they were covered up to their deductible—about $7,500 to $10,000—by a state aid program aimed at helping premature infants. The program also covered Madelyn's after-insurance expenses. (You can research such programs via the website for your state's insurance commissioner, or ask at the hospital.)
Because Madelyn's hospitalization spanned Jan. 1, the family-plan deductible was reset to zero for the new year. If not for the state aid program, the couple would have had to pay the deductible out-of-pocket, twice—once for each calendar year—before their insurance kicked in.
The Sandaus did get stuck with an out-of-pocket cost: Ms. Sandau's emergency caesarean section, which cost between $2,000 and $3,000. "We had to pay for anything that had to do with me out-of-pocket," she says.
But thanks to the state program, the Sandaus never even saw most of their health-care bills—they went directly to the insurance company or the state agency. "Hardly any came to the house," Ms. Sandau says.
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