Dependent coverage under father's plan for new baby

[katieto]

What is the name of your state? Connecticut

My boyfriend/domestic partner and I are expecting a baby in September. We are a heterosexual non-married couple.

My boyfriend works for a start-up company that is reluctant to provide a health insurance plan. Currently, they cover his COBRA from a previous employer at a cost of $250/month.

Adding a baby to my boyfriend's COBRA would cost an additional $400/month. I cannot be added to my boyfriend's COBRA because they do not provide coverage for hetereosexual domestic partners. If we were to get married now, I would not be covered anyway due to COBRA restrictions.

I am unemployed, am financially dependent on my boyfriend, and have independent insurance which costs me $505/month. Adding a baby to my coverage would cost an additional $252/month. We would prefer to add to the baby to my insurance as it is more inclusive.

My questions are:
1. Is my boyfriend entitled to coverage for our baby from his current employer, or can the employer deny coverage for some reason?

2. Can we request that $400 be covered for the baby's insurance, even if we use the other insurance at $252/month?

3. If we were to get married, can his employer simply decline to cover the cost of my health insurance?

Thanks for your help!

Katie

 

[cbg]

1. That depends. If your boyfriend's insurance plan covers dependent children (not all plans do, nor are they required to do so) then as long as you notify them to add the baby to the plan within 30 days of his/her birth, he/she should be covered. However, if dependent children are not covered or if you do not ACTIVELY take steps to notify them that the child has been born AND that you wish to include the baby on the plan, then there will not be coverage. Too many people find out too late that "Well, they know I/she had the baby; after all, they paid the hospital bill" is NOT sufficient for the insurance company to cover the baby. You have to tell them specifically that coverage is required.

2.) Your boyfriend's employer has no legal obligation to be paying ANY of his COBRA premiums. If he is doing so, it is purely a gift. You have no legal right to be asking them for an additional $400 to cover the baby's insurance, particularly if the actual cost to put the baby on your insurance is only $252. You can ask for whatever you want, but if I were in your boyfriend's employer's shoes a request like that would seem like a **** of a nerve to me. Now, if you decide to put him on your boyfriend's insurance, he MIGHT be willing to pay the additional cost to the COBRA premium but even that would be a gift, not a legal obligation of any kind.

3.) Again, it depends on whether spouses are covered on the plan. They are not required to cover dependents; if they do, then a new spouse can be covered as long as they are ACTIVELY added to the plan within 30 days of the marriage. Again, he has to specifically notify them that the marriage has taken place and that he wants to add you to his coverage.

A former employee who is on COBRA is entitled to the same rights with regards to the insurance as an employee who is still actively working, so whatever your boyfriend would be able to do to add dependents if he were still working for the old employer. However, COBRA does not give him any extra rights, so if he wouldn't be able to do it if he were still working for that employer, he can't do it now.

Another thing you might want to take into consideration while making this decision, is that COBRA is not forever. 18 months after the coverage began, that coverage is going to go away, regardless of who is paying for it. You don't get to stay on the insurance from a former employer forever.

Congratulations on your new baby.

 

[katieto]

Thanks for your comprehensive answer, I really appreciate it. We just found out that the employer is considering not covering dependents or families at all, which is incredible in my opinion.

I don't want to jack up insurance costs unnecessarily for the employer, and we will not ask for the baby's insurance to be covered if it is not their "policy." This reflects very poorly on my boyfriend's company, though.

This is not a cash-poor company. If I ran a company, health insurance would cover domestic partners of both sexes as well as children. It's just good policy, and helps to foster a positive productive workplace.

The alternate choice, to scrimp and save in small matters, may cost the company much more in the long term in employee and intellectual capital loss.

 

[cbg]

Katie, to be honest with you, the cost of health insurance is skyrocketing to the point where many employers are having to drop dependent coverage or even eliminate insurance benefits altogether. I'm being absolutely honest with you when I say that I have seen, with my own eyes, premium increases of over 400%.

That is not a typo. I said over four hundred percent. In one instance (thankfully only one) I saw an increase of over one thousand percent.

In many states, and while I am not 100% sure I am reasonably sure that CT is one of them, premium increases for certain sized companies are based on what is called "community rating". That means that it's not just the claims of your boyfriend's company that are affecting its premium; it's the claims of all the companies in your area, using the same insurance carrier, of roughly the same size. So even if the claims of your boyfriend's employer are not that high, if there's another company in the region (it could be state wide, it could be all of New England, or it could be just your local area, depending) with an exceptionally high claims ratio, your boyfriend's employer will be affected.

Community rating is great if you have a small company and a high loss ratio, but if you have a low loss ratio, community rating stinks, to put it mildly.

While I don't know the size or resources of the company, I do not necessarily agree that dropping coverage reflects poorly on them. The cost of insurance to the company is far more than the employees ever see.

 

[katieto]

Thanks, cbg, for letting me know that. A 400% increase it out of control. I suppose I only know what I pay as an individual, but it would be over $900 a month for the family.

It's really a shame that health insurance is no longer affordable for small businesses or for people without coverage. I suppose the industry/system is more to blame than the companies who have to bear the cost. It doesn't seem right that businesses can't/don't offer health insurance to employees.

Until I got sick and was unable to work, I was never really aware of these issues. I made plenty of money and could afford my own health insurance. Now I am disabled and realize how difficult it is for people of average means to pay such high premiums.

 

[cbg]

"It's really a shame that health insurance is no longer affordable for small businesses or for people without coverage. " I agree.

I've worked with group health insurance benefits all my working life. When I first started, the company I worked for was able to offer family health insurance benefits for an entire YEAR for less than $1000. Now in some places that would be only a month's contribution.

You are right, though, that it's not the fault of the small businesses. Even a 40% increase is too much for most of them to swallow. For that matter, so's a 14% increase. And as you say, the employees only see what they themselves pay, so they don't realize that the business cost is so much higher.

The fault belongs in several places. There's plenty of blame to go around. There's the insurance carriers themselves; it was a really bad idea when Congress passed the law allowing HMO's to go for-profit instead of non-profit. There's the medical community, although to a certain extent they are victims themselves since in many cases they are forced to practice medicine as the insurance carriers dictate AND to cover their own tails in case of lawsuits. There's the legal industry; while I am by no means saying that someone who has been really harmed by medical malpractice shouldn't have the right to sue, there are far, FAR too many cases of someone just looking for deep pockets, which has driven up the costs of both medicine and malpractice insurance. And there's the general public at large (I am not speaking personally, but generally) who demands the best possible medical care and the best possible insurance coverage, but is unwilling to pay for it.

For a brief time I worked for an insurance carrier. One of my responsibilities was to help people whose claims had not been paid. Another of my responsibilities was to help the companies negotiate their premium increases (when possible; see community rating). Often it was exactly the same people who would demand that we cover a claim that was clearly excluded by the policy, or waive deductibles that were clearly required by the plan, and then turn around and demand that we give them lower premiums. Oddly enough, those people who had legitimate cases for additional claim payment, or at least the ones who fell into gray areas where it was open to interpretation, would accept the premium increases without question; it was the ones who demanded things they were not entitled to who most often screamed about increases.

So there's plenty of reason behind the increasing costs. But the end result is that many small to mid-sized businesses and many who are un- or self-employed, can't afford decent coverage. And I agree with you; it's a serious problem.

Sorry I can't give you the answers you want.

 

[lkc15507]

cbg is as always, right on the money. Love the education cbg!!!! lkc15507