Will Health Insurance Cover an Adopted Child?
In the past, parents of adopted children have had trouble getting their health insurance companies to cover their adopted child’s medical expenses. Until 1993, all sorts of problems existed within the healthcare insurance world that allowed companies to legally dodge this obligation. Today, however, thanks to new legislation passed over the last 20 years, adopted children are fully covered by their parents’ health insurance. Here are some facts you need to know if you are seeking healthcare coverage for an adopted child.
Up until 1993, health insurance companies were legally allowed to exclude adopted children from healthcare insurance coverage based on several arbitrary factors. For example, health insurance companies could claim that the child was not legally a part of a family until the adoption was finalized in court, a process that could take two years to complete; during that time, the insurance company was not required to cover the child’s medical expenses. Other companies were able to exclude adopted children from coverage on the basis of pre-existing medical conditions, and even took some parents to court to claim retroactive payments for money already forwarded on behalf of an adopted child.
Clearly, legislative help was needed to level the playing field for adopted parents, who were being discriminated against for their parental status. This help came over the course of the next ten years in the form of various laws that affected how a health insurance company had to treat an adopted child.
The Omnibus Budget Reconciliation Act of 1993 was passed as an amendment to the Employee Retirement Income Security Act of 1974, commonly known as ERISA. ERISA is the law which governs employee health benefit plans; OBRA changed the requirements under ERISA for healthcare insurance offered under these plans. Specifically, OBRA stated that no employer could offer a healthcare insurance plan that excluded adopted children for any time period or treated an adopted child’s health issues as a pre-existing condition.
The passage of the OBRA ’93 law took in the vast majority of employees who benefited under their employers’ cafeteria or group healthcare options. However, government employees, who have a different insurance system, were not subject to the ERISA or OBRA restrictions, so a gap was created between parents of adopted children who worked in the private sector and those who worked for the government.
Fortunately, this gap was closed by the Health Insurance Portability and Accountability Act of 1996. Under HIPAA, ERISA was modified to include government employees, so these adoptive parents now enjoyed the same level of protection as parents who worked in the private sector.
HIPAA also took care of some details that were not covered for any employees in the initial OBRA law. Under OBRA, healthcare coverage could be denied to any employee’s child unless the employee enrolled the child during the “open enrollment” period at work. This is a time period, usually around six weeks long, which occurs once a year and in which employees can make changes to their healthcare plans. Under OBRA, adoptive parents had to wait for open enrollment to enroll their newly-adopted children into their healthcare plan. This meant that some adoptive parents might have to wait almost a year for health insurance coverage for these children.
Under HIPAA, however, employees gained the right to make changes to their healthcare coverage at any time during the year if they had a qualifying life event such as marriage or the birth or adoption of a child. Today, an employee simply has to inform the employer that he or she has married, given birth, or adopted a child, and a window is opened for the employee to make any changes to healthcare coverage desired, including changing plan options from single to family or choosing an entirely different healthcare plan. For example, if you choose to go from a low-deductible standard plan to a Healthcare Savings Account or HSA plan, you can do so during this time period without consequence. The healthcare insurance provider is required to cover you and your family members from the day you sign up for coverage under the new plan.
Are There Exceptions to the HIPAA Protections?
If you or a family member has a pre-existing medical condition and you change jobs or insurance providers, the old insurance provider is required to cover you for a certain period of time at a higher premium rate. This is known as COBRA coverage. However, many people find that paying for health insurance under COBRA may be more expensive than paying for medical care for the pre-existing condition out-of-pocket. For severe pre-existing conditions, catastrophic care coverage may be available. Check with your employer to determine your rights and your options.
What If My Employer Is Not Covered by HIPAA?
HIPAA only applies to employer-sponsored healthcare plans. If you purchase your health insurance individually, you may not enjoy all the benefits and protections afforded by HIPAA. However, many states have mirror legislation in place which does regulate health insurance companies and demands the same treatment as HIPAA.
If you live in a state in which the laws do not require insurance companies to comply with HIPAA standards, there may be ways you can enforce your rights as an adoptive parent. However, the simplest solution is to shop for health insurance with a company that voluntarily complies with the HIPAA regulations. There are plenty of health insurance companies eager for your business, and they will often waive any pre-existing condition requirements and enroll your adopted child immediately provided the child is basically healthy.
If you are unsure about your state’s insurance laws and requirements, contact your state insurance commissioner’s office to find out more details. Your state insurance commissioner can give you all the facts about your rights under HIPAA and state regulations regarding healthcare insurance providers.