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Insurance for pregnant women: What new mothers need to know

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Having a baby can get expensive. There are regular checkups and ultrasounds before you give birth. Labor costs include your doctor, nurses, and hospital charges, plus a two-day stay. If you deliver by C-section, you’ll be charged a third day at the hospital plus surgical costs.

If your baby is born ill or premature and requires an extended hospital stay, that will add significantly to your bill.

Once you’re home with your baby, you’ll have regular visits to a pediatrician.

And like most new parents, you’ll probably miss several months of work caring for your newborn.

Insurance typically covers some of the costs for unplanned and unwanted events. So how does it help you for pregnancy and delivery, which people often plan for and look forward to?

Maternity leave insurance

While you can’t buy an insurance policy specifically to cover maternity leave, there are several ways to help you pay for the time off you’ll miss.

The Family and Medical Leave Act (FMLA) requires employers to give time off to parents who have given birth. However, federal law does not require that employees be paid for FMLA time.

Some employers provide paid time off for new parents, either because it’s mandated by their state or as a company benefit. Paid family leave programs exist in the District of Columbia, California, New Jersey, Rhode Island, New York, Washington, Massachusetts, Connecticut, and Oregon.

A WorldatWork survey shows about 52 percent of employers offered paid family leave. But only 16 percent of all U.S. workers employed in the private sector were covered by a paid family leave policy in 2018, according to the Bureau of Labor Statistics.

Health insurance for pregnant women

The Affordable Care Act requires health care plans to cover pregnancy services because they are considered essential health benefits. This is true even if you’re pregnant when you start coverage. This includes plans offered through the Health Insurance Marketplace.

If you’re looking for the best health insurance coverage for pregnancy and childbirth, there are plans that will cover all pregnancy costs, including prenatal testing, blood work, ultrasounds, monthly or weekly doctor visits, and the labor and delivery of the baby.

Hospital insurance

Normal delivery is followed by a two-day hospital stay for both parent and baby. A complicated birth could require a longer stay.

A three-day stay in the hospital can cost around $30,000, according to

While your health insurance will cover most of this cost, it may not cover it all. One way to help pay what health insurance doesn’t cover is through a hospital indemnity policy.

Hospital indemnity insurance is a type of policy that helps cover the costs of hospital admission that may not be covered by other insurance. Plans typically provide benefits to you when you are admitted to a hospital or ICU for a covered sickness or injury.

Hospital policies typically pay a lump sum directly to you, not a hospital or medical facility. That means you can use the benefit for any purpose, whether to cover the cost of care or for a non-related purpose.

The policy benefit is usually based on the number of days you are hospitalized. For example, a policy that pays $250 per day will provide you a lump sum of $750 if you spend three days in the hospital. There may be a limit to how many days the policy will reimburse you for; for example, a 30-day limit.

Plans may have an optional benefit to include childbirth. Depending on the policy, a hospital indemnity policy may cover the mother's admission to the hospital for normal labor and delivery, as well as an ill infant's stay in a neonatal intensive care unit.

Like with other types of insurance, you can buy your own individual policy or, if available, purchase through your employer’s group plan.

Saving money to cover pregnancy costs

There are two tax-advantaged methods of saving money for health care costs.

One is a health savings account (HSA), which is available for people who are covered by a high-deductible health insurance plan. The other is a flex savings account (FSA), for those covered by other types of insurance plans.

Both types of accounts enable you to deposit money tax-free to use later for qualified medical expenses, which include pregnancy and childbirth. That means if you contribute $2,000 to an HSA or FSA in a tax year, your taxable income will be reduced by $2,000.

An HSA is more like a personal savings account, only the money is designed to cover health care costs. Only people enrolled in a high-deductible health care plan can set up an HSA. HSAs require the money to be in the account before it’s used.

FSAs allow you to access funds that are not yet deposited into your account. For example, if you budget $2,000 for your FSA for the year, your employer will deduct an amount per month or per pay period that totals $2,000. But the entire $2,000 will be available to you at the beginning of the plan period, which is usually January 1.

One advantage of an HSA is that you don’t have to spend your full amount each year. Whatever you have in the account at the end of the plan year will rollover. Plus, HSAs are portable, meaning you can take the account with you if you leave your employer.

FSAs only allow users to rollover $500 per year. Any unspent funds above that limit are forfeited by the account holder. Also, you can’t take money from an employer-sponsored FSA if you quit or change jobs.

The IRS sets contribution limits on HSAs and FSAs. In 2021, the annual contribution limit is $3,600 for individuals and $7,200 for family coverage. The limit for FSAs is $2,750 this year.

Learn More: HSA vs. FSA

Disability insurance for maternity leave

Disability insurance is another type of policy that can help with the expenses related to childbirth.

Many company group short-term disability policies will provide some paid benefits during and after pregnancy. In addition, long-term disability insurance can help parents who experience long-term complications due to pregnancy or delivery.

Short-term disability insurance

In general, short-term disability insurance payments will last for six weeks after normal delivery and eight weeks for a C-section. Some policies will also provide eight weeks of benefits for the birth of twins or triplets.

In addition, complications arising from delivery may extend benefits beyond the normal benefit length. One in four pregnancies has complications that can cause mothers to take additional time off from work. Also, about 15 percent of pregnancies result in postpartum depression, which makes disability insurance for pregnancy a must-have.

The disability period will usually begin the day you give birth. But if you need to leave work prior to delivery, the insurance company will consider you disabled when, as a result of pregnancy, you cannot perform the main duties of your occupation. It begins on the date you stop working as recommended by your physician. However, policies typically dictate that you can’t start disability payments earlier than four weeks before your due date.

Long-term disability insurance

Long-term disability policies will not provide benefits for the birth itself, either standard delivery or C-section.

But certain long-term complications resulting from your pregnancy could qualify for benefits under a long-term disability insurance policy. Pregnancies can also accelerate dormant illnesses and other conditions, which means a long-term disability insurance policy can help in the event of unforeseen illnesses.

If buying individual disability insurance, you should get a policy before you become pregnant. An individual policy will typically require underwriting. An existing pregnancy will likely be considered a pre-existing condition and won’t be covered by the disability policy.

Group disability policies, on the other hand, typically do not require underwriting. Therefore you can sign up for coverage even if you are already pregnant.

By taking advantage of employer benefits, maintaining adequate insurance coverage, and saving money in savings account for health expenses, you can be bettered prepared financially for pregnancy, childbirth, and the first few months of childhood.

Joel Palmer is a freelance writer and personal finance expert who focuses on the mortgage, insurance, financial services, and technology industries. He spent the first 10 years of his career as a business and financial reporter.

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

— Published May 29, 2021
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