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

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.

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