Maternity update

Although there is no such thing as maternity insurance per se, there are supplemental hospital policies that include hospitalization due to childbirth as a covered benefit – but the policy must be in effect a full 10 months before childbirth is an eligible hospitalization.  These policies cost on the order of $50 per month and pay mom on the order of $1600 to $2200 for a typical normal delivery with 2 days of hospital confinement.  Should the newborn be admitted to the NICU (12% are) then by law the newborn may be added to the policy retroactive to the moment of birth.

Until early 2011, Aflac allowed the stacking of two of their plans, but that is no longer the case — the applicant must choose one or the other (I’ve noticed some competitor sites have not been updated to reflect this change).  People who were smart enough to obtain both policies can keep them.  ICU coverage may and should be added, either as a separate plan (Aflac) or rider (Humana).

It is possible to stack a plan from another company as well, e.g. Humana.  However, these plans are disappearing (because they work!).  Case in point – Utah.  Humana no longer offers its Hospital Cash Plan in Utah.  An Aflac plan may be obtained in Utah through a payroll account, but it may not include the initial hospitalization rider, wherein lies most of the benefit for a short period of confinement.  Otherwise, for a Utahn to obtain a supplemental plan with significant maternity benefits, she would need to be on an Aflac group account outside of Utah; or have obtained the plan (Aflac or Humana) while a resident of another state*.  This raises another issue – that of dropping the plan either intentionally or unintentionally.

It is imperative to work with your producer (agent) in order to make informed decisions.  Some people cancel or lapse their plans after delivery without considering the consequences.  Once obtained the policies may be kept for as long as the policyholder wants.  Aflac policies obtained via payroll deduction may be ported with no change in premium.  But should the insured cancel, it is not guaranteed that the insured could obtain the policy again.  This is especially important if the newborn was admitted to the NICU.  Depending on the situation, that child might not qualify for that supplemental policy again. Likewise, the child might have a hard time getting major medical or life insurance coverage, which elevates the importance of the supplement policy the child could have kept.

Bottom line:  plan ahead and consult your producer before making changes to your plans (or moving to Utah).

* Not available in all states, and the list changes – another reason to work with an appropriately licensed producer.