Birthday Rule

So my wife and I are expecting our first child in November and we are on the older side for first time parents (i’m 42, she’s 40) so while things are going well so far, we know that things are always high risk for us, so I was just reading about NICU stays and costs involved and ran into the birthday rule. My question is whether in our situation, it is worth it for me to drop my insurance and see if i can get added on to my wife’s plan… here are the details:

I have a high deductible plan ($2500) through work and put in money to an HSA – from what I can tell, the hospital we plan on giving birth in is out of network for my plan so it seems that the deductible jumps from $2500 to $9000 if out of network

My wife has a better plan through her job that has no deductibles and our hospital is in network

From what I understand from reading up on the subject, the birthday rule states that my insurance plan would be the primary plan for our baby as soon as he is born since my birthday (12-10) is before my wife’s (12-31) so if he needs NICU care in the hospital, it seems we would owe a lot more under my plan

The part that is confusing me is the stipulation i read that says

* The secondary plan pays any remaining costs not covered by the primary plan — but only if the medical care is a “covered benefit” under the secondary plan.

So does that mean that if my insurance would have a $9000 deductible for a NICU stay, would that then be covered by my wife’s plan? Some of the sites i’m looking at also seem to say that if the primary plan is not as good as the secondary plan, then it would be worth it for the spouse with the primary plan to drop it and get on the other plan before the child is born but why would you do this if the secondary plan would cover anything not covered by the primary plan?

Any advice would be appreciated, i’m not great on insurance lingo and interpreting fine print – thanks!

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  1. Birthday rule applies IF the baby is listed as a dependent on 2 insurances. Then one would need to be primary.

    Usually, baby has mandated coverage under mom’s insurance for some defined term (this may be state dependent, I’m not an expert). Birthday rule would come into play if you wanted baby on dad’s insurance but mom’s insurance was legally mandated to provide coverage, creating an overlap period.

    We just gave birth this month and avoided this issue by keeping baby on mom’s insurance only for this year. We plan to reevaluate during the next open enrollment. This should work for you as long as your state doesn’t require dad’s insurance to cover baby.

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  3. Looks like it’s an enforced COB situation, which should be fine for you. Even though the primary plan will process it as out of network, the secondary will pick it up appropriately. You can call and verify that with them if you’d like. I’ve done COBs this way, even when an item isn’t covered by the primary the secondary will cover it as long as it’s in their benefit structure, which labor and delivery normally is.

    But MOST IMPORTANT! The baby is only covered automatically for the first 31 days of life! Within those days you must submit paperwork for continued coverage to whichever plan you choose to have them continue on, it doesn’t have to be both. Get that started asap! Do not wait until the last minute. Call whichever employer on day 2 of life and add them starting day 32 of life.

    Good luck, have fun, make sure you both get some uninterrupted sleep occasionally.

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