Finessing Health Coverage: When To Buy Insurance For A New Baby

Feb 17, 2014
Originally published on February 23, 2014 12:11 pm

We're heading into the home stretch to sign up for insurance under the Affordable Care Act this year. The open enrollment period ends March 31 for most people.

But there are exceptions. And they are the subject of many of our questions this month.

For example, Diane Jennings of Hickory, N.C., has a question about her young adult daughter, who's currently covered on her father's health insurance. "When she ages out of the program this year at 26, in October," Jennings asks, "she'll have to get her own insurance through the exchange. But as she [will have] missed the deadline of March 2014, will she have to pay a penalty?"

There shouldn't be any penalty. Turning 26 is one of those life changes that allows you to buy insurance from the health exchange outside the normal open enrollment period. In this case, since the daughter knows when this will happen, she can make the switch in advance; you can sign up as many as 60 days before you'll need coverage.

This is a function the federal government just recently added to the Healthcare.gov website. When you log into your account there's a new button that's marked 'report a life change.' You click on that button and it should guide you through the process.

Kaitlyn Grana of Los Angeles is also a young adult on a parent's plan – her mother's. She and her husband are expecting a baby in June. Her husband has insurance through his employer. But, she says, "He doesn't really love his insurance, so we're thinking about covering baby through Covered California," the state-run exchange. "My question is, how soon do we need to do this, and what options are available to us?"

We have several questions from young women on their parents' plans who are pregnant. And it's important to know is that while the health law requires that employer health plans cover their workers' young-adult children, that requirement does not extend to their children's children (although a few state laws require it). So Kaitlyn won't be able to get her new baby covered through her mother's plan.

She can, as she notes, add the baby to her husband's health insurance. Having a baby is one of those life changes that qualifies for your own special open season, at work or through a health exchange. So she and her husband also can buy the baby coverage through California's exchange. But because they have access to the father's plan, they probably won't be eligible for any subsidies to help pay the premiums.

Insurance experts we consulted said the couple can wait until the baby is born to buy coverage, because it will be retroactive, as long as you buy pretty shortly thereafter, usually within the first month.

Staying with the family theme, Lorrie Posegay of Cape Coral, Fla., wonders about a privately-purchased health plan that some of her family members have had for a couple of years now. "So far it's not being canceled," she writes. "But it doesn't meet all the requirements under the ACA. So I'm wondering if we keep this plan will we have to pay a penalty?"

In general, you can't buy new coverage that doesn't include what are called the essential health benefits under the health law. But if you have existing coverage that doesn't include everything, you're probably OK. Especially this year.

Any coverage you have from an employer is considered adequate to avoid a penalty. There's also a one-year extension of privately-purchased plans that don't have all the required benefits. And for the few remaining individual plans that were sold before the law was signed in March 2010, those are considered "grandfathered," and can continue indefinitely. Posegay confirmed that this particular plan goes back to 2008 or 2009. So that's a case where people who like their plans can keep them and not be subject to penalties.

Adam Chrystie from Los Angeles says he may be facing a layoff at his job, and worries about losing his health insurance. He knows he can buy insurance from his state health exchange, "but I was told it can take between two weeks and 45 days for the insurance coverage to begin, depending on when I signed up during the month. What can I do to provide my family with insurance coverage in case there's an emergency while I wait for the Affordable Care Act insurance to start?"

He might be able to go straight from employer coverage to new exchange coverage, depending on when he loses his job. Many employers continue insurance through the end of the month your job ends. And after the current open enrollment period ends in March, if you lose your job you can use what's called a special enrollment period. In that case, you sign up for coverage on the exchange and your insurance will start on the first of the next month.

But if there is going to be a gap, there are options. One is COBRA, where you pay the full price to keep your old job's health insurance for a month or two, even up to 18 months. That can get pretty expensive, so not a lot of people who are losing their job can afford to do it.

There's also short-term gap insurance available through private insurers. If you're worried about a possible health problem, that's something to consider, although unlike most other health insurance, gap insurance can still be subject to preexisting condition exclusions.

And if you're worried about a possible tax penalty in these situations, don't be. After this year's open enrollment ends, you can have a gap in coverage. As long as it's less than three months, you'll be considered covered for the full year.

Abraham Taylor from Seattle has a question about potentially being double-covered. "If I buy health insurance through the exchange and then get a new job that offers health insurance, how do I stop ACA coverage? Or can I?"

Yes, you certainly can. And now it's easier than it was. If you're in one of the 36 states where the federal government is operating the health exchange, you sign on, go to the 'My Plans and Programs' tab, and you'll find a red button labeled 'End All Coverage.' You get to choose the date you want your coverage to end and the exchange informs your insurance company. At least that's how it's supposed to work. It probably wouldn't hurt for you to inform your insurance company yourself, too.

In the states operating their own exchanges, it may be a little different. In Washington State, for example, according to a spokeswoman for the Washington Health Benefit Exchange, you can sign on and look for a button that says "disenroll." To avoid being charged for the following month, you have to do that by the 23rd of the month before. If you can't find the right place on your state's website, try calling the customer service number.

But the bottom line is you definitely don't need to carry two health insurance policies. If you get a job with insurance, you can drop any individual coverage you bought on your own.

Finally, Daniel Smothergill of Syracuse, N.Y., wonders about dental coverage. He's 70 and has insurance both from Medicare and a former employer, but neither includes dental. "Can I buy dental coverage without buying anything else?" he asks. "Where can I find companies that offer this?"

As we noted last month, dental benefits in the exchanges are, well, complicated. Legally, there's nothing to prevent a Medicare beneficiary from buying stand-alone dental coverage on a health exchange. Medicare enrollees may not buy regular health coverage from the exchanges because it duplicates coverage they already have. But neither Medicare nor most Medicare supplemental policies cover dental.

But the federal government has decided not to sell separate dental plans to Medicare beneficiaries in the 36 states where it's operating the exchanges, according to Joe Touschner, who has been tracking the dental benefit for the Georgetown University Center for Children and Families.

And since states that do offer stand-alone dental policies for Medicare beneficiaries don't offer subsidies, the prices are likely the same as you would get from a private insurer outside the exchange.

So if you're having trouble finding dental coverage, you might want to browse the plans in the exchange and then call the carriers directly.

More questions? Check out our guide to coverage to see if we've answered yours. If not, email your question to us at morningedition@npr.org.

Copyright 2018 NPR. To see more, visit http://www.npr.org/.

RENEE MONTAGNE, HOST:

This is MORNING EDITION from NPR News. Good morning, I'm Renee Montagne.

DAVID GREENE, HOST:

And I'm David Greene with Steve Inskeep.

Today in Your Health, we're answering more of your questions about the Affordable Care Act. It's now the home stretch for signing up for insurance for this year. If you don't have health insurance, as of today you have six more weeks to enroll or you could face a penalty on next year's taxes. Sounds simple enough, but individual cases can actually be complex.

NPR's Julie Rovner has been helping our listeners straighten things out. She came in with another round of questions and sat down to chat with Steve.

STEVE INSKEEP, HOST:

Hi, Julie.

JULIE ROVNER, BYLINE: Hey, Steve.

INSKEEP: So let's dive right into it here. Our first question comes from Lorrie Posegay, of Cape Coral, Florida, who wonders about a health plan that some of her family members have had for a couple of years now.

LORRIE POSEGAY: They have a privately purchased major medical plan that so far is not being cancelled, but it doesn't meet all the requirements under the ACA. So I'm wondering if we keep this plan will we have to pay a penalty, because it doesn't meet all the requirements.

INSKEEP: OK, so we're still in this transition period. Some people still have plans from the past that don't meet the Affordable Care Act requirements. Are they going to have to pay a penalty?

ROVNER: Well, in general, you can't buy new coverage that doesn't include all of what are called the minimum essential benefits under the health law. But if you have existing coverage that doesn't include everything, particularly this year, you're probably OK. Any coverage you have from an employer is considered adequate to avoid a penalty. There's a one year extension of privately-purchased plans that don't have all the required benefits.

INSKEEP: Oh, I remember. That was a huge controversy last year.

ROVNER: That's right. President Obama did that to kind of tamp down some of the panic. And for few remaining individual plans that were sold before the law was signed in March 2010, those are considered grandfathered, and those can continue indefinitely. I actually asked Ms. Posegay and she confirmed this particular plan actually goes back to 2008 or 2009. So that's one of those cases where people who like their plans can keep them and not be subject to penalties.

INSKEEP: Until those plans expire or whatever. Now to the other side of the country, Adam Chrystie from Los Angeles says he may be facing a layoff at his job. And he worries about losing his health insurance along with that job. He knows he can now buy insurance from his state health exchange but there's a timing issue for him.

ADAM CHRYSTIE: I was told it can take between two weeks and 45 days for the insurance coverage to begin depending on when I signed up during the month. What can I do to provide my family with insurance coverage in case there's an emergency while I wait for the Affordable Care Act insurance to start?

INSKEEP: How do you fill that gap?

ROVNER: Well, first of all, he might not need it. Depending on when he loses his job - and I'm sorry in advance if that happens. Many job losses continue insurance through the end of the month that your job ends. And after the current open enrollment period ends in March, if you lose your job, you'll have what's called a special enrollment period where you can sign up for coverage on the exchange. And your insurance will start the first of the next month. So you might be able to go straight from an employer plan to new exchange coverage.

But if there is going to be a gap there are a couple of options. One is COBRA, where you pay the full price to keep your old job's health insurance for a month or two. And that can extend actually up to 18 months.

There's also still short-term gap insurance available and that's not through the exchanges. Although, unlike most other health insurance, gap insurance can still be subject to preexisting condition exclusions. So you need to be careful about that.

INSKEEP: That stuff is not regulated the same way as other insurance?

ROVNER: No, it's not.

INSKEEP: OK. Another question here, staying in California. Kaitlyn Grana, also from Los Angeles, she has one of those more complicated situations.

KAITLYN GRANA: My husband and I are expecting a baby in June. And I'm currently covered under my mom's family plan and he is insured through his employer. He doesn't really love his insurance, so we're thinking about covering baby through Covered California. My question is how soon do we need to do this, and what options are available to us?

ROVNER: We actually had several questions this month from young women on their parents' plans who are pregnant. And something that's important to know is that while the health law requires employer health plans to cover their workers' young adult children, that requirement does not extend to their children's children. So grandchildren are not covered. So Kaitlyn won't be able to cover the baby on her mother's plan.

Now she can, as she notes, add the baby to her husband's health insurance. And having a baby is one of those life changes that qualify you for your own special open season, at work or through a health exchange. Or they can also, as she suggests, buy the baby coverage through Covered California exchange.

INSKEEP: Oh, so the fact that they could get this insurance through husband's plan does not preclude them from getting an individual insurance plan. They can go to the exchange.

ROVNER: That's exactly right. Although they probably won't be eligible for any subsidies to help pay the premiums because they're eligible for coverage at the husband's plan.

As to when to do it, experts say there's no huge rush. You can wait until the baby is born and coverage will be retroactive, as long as you do it pretty shortly thereafter, probably within the first month.

INSKEEP: OK. Our next question also concerns young adults staying on their parents' insurance. It's from Diane Jennings of Hickory, North Carolina. And she's asking for her daughter, who is currently covered on her father's health insurance.

DIANE JENNINGS: When she ages out of the program this year at 26 in October 2014, she'll have to get her own insurance through the exchange. So, as she missed the deadline of March 2014, will she have to pay a penalty?

INSKEEP: Difficulty of timing there, Julie?

ROVNER: Well, there really shouldn't be any. As we just discussed, with having a baby or losing a job, turning 26 is one of those life changes that allows you to buy insurance from the health exchange outside the normal open enrollment period. In this case, since the daughter knows exactly when this will happen, she can do it in advance. You can actually sign up as much as 60 days before you'll need coverage. In fact, this is a function the federal government just recently added to the healthcare.gov website. When you log on, there's a new button that's marked report a life change. You click on that button and it should guide you through the process.

INSKEEP: So this open season right now is in future years really just going to be a time for people who want to make some change in their insurance. If you have something that forces you to make a change in your insurance - one of these life events - you can get insurance anytime that you can do it.

ROVNER: Absolutely. That's exactly how it works.

INSKEEP: OK. Now finally, from Seattle we have a question from Abraham Taylor, who is asking here about potentially being double-covered.

ABRAHAM TAYLOR: If I buy health insurance through the Affordable Care Act, and then I wind up getting a job later on in the year that provides me with health insurance, do I have to continue with the coverage that I got on the ACA or do I have to pay for both?

INSKEEP: So is he going to end up paying for two plans at once if he gets a job with insurance later in the year?

ROVNER: No. Absolutely not. And it's actually now easier to drop that insurance that you bought on the exchange than it was. If you're in one of the 36 states where the federal government is operating the health exchange, you just sign on, go to the my plans and programs tab on the website. You'll find a red button labeled end all coverage, and get to choose the date you want your coverage to end. The exchange is supposed to inform your insurance company - at least that's how it's supposed to work. Probably wouldn't hurt for you to inform your insurance company as well.

In the states operating their own exchanges, it may be a little different. There in Washington State, for example, you can sign on and look for a button that says disenroll. To avoid being charged for the following month, by the way, you have to disenroll by the 23rd of the month before. If you can't find the right place on your state's website, you might try calling the customer service number. But the bottom line is you definitely don't need to carry two health insurance policies. If you get a job with insurance, you can drop any individual coverage that you've bought on your own.

INSKEEP: Julie Rovner, these questions you've brought us, of course, are just a selection of many that you've heard, but you've read many more of them. Based on the questions we have here, they seem to be getting a little sharper and more specific as we get further into this process. Do you sense that people are getting a little better understanding of how the process is supposed to work?

ROVNER: Yeah. I think we're really saying a learning curve here. At the beginning, the questions were, how is this going to work? How do I get signed on to the website? How do I pick a plan? Now we're getting people's individual insurance situations. So you're really seeing that evolution after you get over that sort of big hump of things not working. Now things are starting to work and people are trying to figure out what this new health system is going to mean to them.

INSKEEP: Julie, thanks, as always.

ROVNER: Thank you.

INSKEEP: That's NPR health policy correspondent Julie Rovner. We have an archive, by the way, with all of the questions we've answered and more in searchable form, at npr.org/affordablecareact. And if you have a question we still haven't answered, you can send it to health@npr.org.

(SOUNDBITE OF MUSIC)

GREENE: It's MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.