Deductibles and Out-of-pocket maxes when changing plans mid-year with same employer
My wife and I just had a child on September 30th. The birth of a child is a Qualifying Life Event, giving us the ability to include our child on my wife’s insurance (which is better than my own insurance), which we want to do. However, we are tripped up over how this affects various deductible and out-of-pocket max situations, and this could affect which plan we choose when we add our child.
My wife’s plan in the leadup to the delivery was a (pretty good) HSA-eligible plan through her employer. She had already met her plan’s deductible ($2000). She has paid about $2450 in expenses this year out-of-pocket, which puts her very close to hitting her out-of-pocket maximum of $3000, a number that we know/knew she would easily hit if you include the costs of the delivery.
Option A: Add Baby to Current Plan: If we include the baby on my wife’s plan and stay within her current plan, it effectively changes it from a “$3000 out-of-pocket max for my wife” to a “$6000 out-of-pocket max for the family [my wife + our child]”. Similarly, but of lesser importance, it changes the deductible from “$2000 deductible for my wife” to “$4000 deductible for the family OR $3000 for an individual within a family”. We will definitely clear the deductible and hit any relevant out-of-pocket maxes, but would obviously like the out-of-pocket maxes (as they are applied by person) to be as low as possible. However, we are unclear on…
Question #1 Will the $3000 out-of-pocket max (just for her) be applied for expenses relating to my wife’s delivery, or will it be $6000 (combined out-of-pocket max for my wife + our child)? We’re definitely hitting the out-of-pocket max either way, and so an effective increase in the out-of-pocket max from $3000 to $6000 corresponds to an increase of $3000 in what we will actually end up paying. My wife was admitted to the hospital early on Sept 30th, and the baby was born later on Sept 30th, and we continued receiving care until we were discharged on Oct 2nd. Presumably, the retroactive dating for the Qualifying Life Event would be to Sept 30th, but I don’t know if that would affect our costs (via the out-of-pocket max) on that same day of Sept 30th but prior to their birth. I’m also not sure on what date the relevant hospital charges would be dated (i.e. all on Sept 30th and therefore potentially considered “prior to the birth” and the resulting change of life event… vs being spread across Sept 30th, Oct 1st and Oct 2nd).
Option B: Add Baby while switching plans: We can switch my wife (and our baby) into another plan (with higher premiums, which we don’t care about) with the same insurer with her same employer. It has a lower deductible ($250 for individual, $500 for families), after it which it graduates to a set of fixed $ co-pays and then an out-of-pocket max. This plan has an out-of-pocket max of $2,500 for an individual or $5000 for a family, and it importantly states that it kicks in for an individual when the individual max is hit and also kicks in for the entire family when the family max is hit. This would mean that unlike the other plan there is no such issue of the out-of-pocket-max effectively doubling “instantly” upon our baby’s birth. However:
Question #2: If we switch plans what happens with our expenses paid year-to-date? My wife has already had $2450 in expenses that she has paid out-of-pocket on her current plan, and this new plan has a deductible that is only $250 for an individual ($500 for a family) and an individual out-of-pocket max of $2500. If her expenses paid year-to-date count against this plan that she would switch into, then she’s basically already at her out-of-pocket max. If they do not carry over, then we basically “start fresh” I assume, with the relevant deductibles and co-pays, which seems to be very good. (If the Delivery on Sept 30 gets included on the new plan instead of the old plan, then it seems like everything Maternity is covered 100% by the plan with no copay, save for the the hospital admission for the actual delivery which has only a $500 copay as an “inpatient visit”).
So I’m not quite sure what to do. We’re almost at an out-of-pocket max that might effectively double via an adding of the baby to the plan. And we can switch to a more robust plan but I’m unsure of whether her expenses already paid on the old plan count against deductibles and out-of-pocket maxes on the new plan. I’m also not sure how a retroactive dating of a plan change to the birth date affects the treatment of costs occurred in connection with that birth (some on the same day as the birth, and some over the following 2 days).
There is also the option that we simply wait for the hospital bills for the delivery to come due and be processed by her insurance company (which would apply the $3000 out-of-pocket max), and then we make any plan changes (to add baby and/or switch plans) after that already occurs since we have 30 days to make the qualifying change.
Any advice on this would be incredibly helpful.
