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Insurance and employer benefits for new parents

When you’re preparing to bring a new member into your family, it’s a great time to make sure you’re taking advantage of all the benefits your employer has to offer as well as having all the proper insurance coverage. Here are some benefits and insurance tips for growing families.

Review your personal health insurance coverage

Check the Summary of Benefits and Coverage provided by your health insurance company to understand what your health insurance policy covers. Under the Affordable Care Act, maternity care and childbirth are essential health benefits, so most health plans must cover them. Not all do—so be sure to check. Some insurance plans may require you to pay more out-of-pocket costs than others.

If you’re able to plan ahead before pregnancy, it can be a good idea to evaluate all your health insurance options and find a plan that you can afford that reduces the risk of unreimbursed medical bills.

Plan for parental leave

Parental leave is an important benefit for many, including adoptive parents. Up to 12 weeks of unpaid family leave is guaranteed by the Family Medical Leave Act (FMLA) for many employees who work for an employer with 50 or more employees.1,2 Both parents can take time off if they are both eligible employees at a covered employer.

In addition, some employers offer paid family leave. Check with your employer to understand their policies on maternity or paternity leave, including adoptive parents. Paid or unpaid leave may also be available to adoptive parents before or after their new family member comes home.

Research other potential employer benefits

Your employer may offer some benefits that could help as your family grows. Here are a few examples to look for, both before and after your baby arrives. 
 
Health flexible spending account (FSA)

An FSA lets you save dollars pre-tax and spend them in the same year on medical expenses. 
 
Adoption assistance 
 
Some employers offer benefits that help with the costs of adoption, either paying for or reimbursing you for expenses associated with adoption. 
  • Group legal benefits could help with the cost of hiring a lawyer.2 Adoption laws vary from state-to-state and international adoptions can require special expertise as well.
  • Consultations with adoption specialists or referrals to adoption agencies are also adoption benefits that some employers provide.

Dependent care flexible spending account 

A dependent care FSA allows you to save money pre-tax up to a certain limit to help pay for expenses like daycare or summer camp. Then, as costs are incurred, you submit your eligible child care expenses for reimbursement.

Health savings account (HSA) 

If you have a high deductible health plan, saving in an HSA can help you pay for qualified medical expenses now or in the future. Contributions to the account are made pre-tax. Withdrawals of contributions and earnings are tax-free when used for qualified medical expenses. Although state taxation may vary, most states follow the federal tax law. 

Life and disability insurance coverage

Life insurance and short- and long-term disability insurance can be critical for young families. Research the deadlines to purchase coverage so you can plan ahead. 

If you, the person giving birth, have short-term disability insurance coverage, you may be able to claim benefits to help you recover from labor and delivery. Or, if you’re not able to work due to pregnancy complications, disability coverage would likely apply there as well. 

Check your insurance coverage for the elimination period, the benefit period, and the benefit amount to find out when you can file for benefits, how long you may be able to claim them, and the amount. The rules vary by state and by employer—and insurance policies may have specific rules about qualifying circumstances.

Add your child to your health insurance

Having a baby or adopting a child qualifies for a special enrollment period outside the yearly open enrollment period. This allows you to enroll in health insurance (either through your employer or the marketplace) and adjust other benefits like saving more in a flexible spending account, signing up for a dependent care flexible spending account, or increasing life insurance coverage. 
 
Note, it’s important to act relatively quickly. After the birth or adoption of your child, you’ll have:
  • 30 days (or 31) to make changes to your employer health insurance and benefits. 
  • 60 days to enroll in a marketplace plan, add your child to an existing plan, or buy a new plan.

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More to explore

1.“Family Medical Leave Act (FMLA),” U.S. Department of Labor, https://www.dol.gov/general/topic/benefits-leave/fmla. 2.“Planning for Adoption: Knowing the Costs and Resources,” Child Welfare Information Gateway, June 2022, https://www.childwelfare.gov/pubpdfs/s_costs.pdf. 3. “Special Enrollment Period (SEP),” Healthcare Gov, https://www.healthcare.gov/glossary/special-enrollment-period/.

This information is general in nature and provided for educational purposes only.

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

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