Adding a New Baby to Your Health Insurance

Baby healthcare and treatment. Medical research. Blood tests.

There's no need to feel rattled about adding a new baby to your health insurance policy, even if the process isn't as seamless as you might assume.

It seems natural that your insurer would know to add your little one to your coverage. After all, hasn't the company noticed the doctor and hospital bills related to the child's arrival?

But it doesn't work that way. You'll need to formally notify your carrier of the birth.

And you need to do it quickly or you could lose out on insurance benefits for the infant. Plus, you could wind up owing a penalty under the Affordable Care Act, also known as Obamacare.

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You must make contact

"You need to let your insurance company know. It's not going to happen automatically," says Joseph Touschner, senior health policy analyst at the Georgetown University Health Policy Institute's Center for Children and Families.

Depending on how you're insured, that will mean contacting the health plan director at your workplace, notifying your insurer directly or making the addition through your state's Obamacare health insurance exchange.

With work-based or Obamacare coverage, "If you're having a new baby, it's considered a life event, so you can enroll your bundle of joy as soon as it's born," rather than waiting for the next open enrollment period, says Joe Mondy, a spokesman for health insurer Cigna.

Under the Affordable Care Act, having a baby is one of the changes classified as a "qualifying life event" allowing you a special enrollment window to make coverage changes.

Other events that let you change your plan include moving to another state, marrying or divorcing.

Don't waste any time

Health insurance companies typically require that a newborn be added to a policy within 30 days of birth. The U.S. Department of Labor says enrolling the child within that time frame should provide coverage retroactive to the date of birth.

"A large, sophisticated carrier such as Cigna will recognize through your claims submissions that you are having a baby and reach out to you with the special services we provide expectant moms," including help enrolling the new family member, but it also is a good idea to contact your insurance company directly, Mondy says.

With Cigna, you can phone the company or add your baby to your coverage by using the company's website or its mobile app, he says.

Adding a child to an exchange plan

You can get up to 60 days to add a new baby to a plan purchased through a health exchange, but Touschner recommends you don't wait and that you promptly obtain a new plan that fits your family's changed circumstances.

As with so many aspects of the federally run health exchange that's serving most states, consumers encountered difficulties when they went to HealthCare.gov and tried to include newborns on their health insurance policies earlier this year.

The HealthCare.gov website had no mechanism to add new babies; consumers had to contact health insurers directly to make changes.

By February, the problem was addressed, allowing consumers to add an infant via a new "Report a life change" link within the federal marketplace.

"We are committed to ensuring that consumers have continuity of coverage if they experience a life circumstance such as a birth of a new child," the website's managers at the Centers for Medicare and Medicaid Services said in an emailed statement.

Essential benefits, potential penalties

Under health care reform, individual and small-group plans offered both within and outside the Obamacare insurance marketplace must cover a set of "essential health benefits," including maternity, newborn and pediatric care.

The plans must cover preventive care for children, such as immunizations, behavioral assessments and hearing screenings, at no cost to the family.

But, also under the Affordable Care Act, if you fail to sign your baby up for health insurance, you'll not only pay for medical services out of pocket, but you could also face a penalty for failing to provide insurance for your child.

For 2014, you could be required to pay $47.50 for each uninsured child and $95 for each uninsured adult in your household, up to $285 per family. Or you could owe 1% of your household income, if that is larger. Penalties are set to rise in the coming years.

By requiring that all family members have insurance, "we expect that it will improve children's health overall," Touschner says.