Our kid was born, and the billing has
finally been sorted out. I just want to report back on how the financial aspects worked out.
We were expecting a January birth, but our son decided to be born in December instead, pushing things back into the 2015 plan year. My wife was still on her employer's plan. We decided to add her to my insurance as secondary coverage (retroactive to the birth date), along with putting our son on my insurance as primary coverage.
I later found out that my employer doesn't actually charge for health insurance premiums during parental leave, so adding my wife actually didn't cost us any extra in terms of premiums, and it saved us quite a bit on our medical bills as I'll explain later. Even if we did have to pay a premium we would have come out well ahead with the double coverage.
Mrs. Cyclone's expensesDescription | Sticker price | Insurance negotiated rate | Primary insurance paid | Secondary insurance paid | We owed |
OB physician services | $5,059.00 | $4,399.42 | $3,135.92 | $1,263.50 | $0.00 |
Hospital stay | $6,584.05 | $6,584.05 | $6,368.03 | $216.02 | $0.00 |
Approximately $1,500 of Mrs. Cyclone's $2,000 deductible on her primary insurance was used up on lab tests, ultrasounds, and other stuff prior to the birth. The OB doctor bill (having gone through insurance first), used up the rest of the deductible and the 20% coinsurance got most of rest of the way to the $3,000 out-of-pocket maximum. The rest of the out-of-pocket maximum was reached with the hospital bill.
I'm still not entirely sure how secondary insurance calculates payment amounts. I would have naively expected to still need to actually pay any amount not paid by primary insurance. That amount would then count toward the secondary insurance's deductible, at which point the secondary insurance would start paying for stuff. What actually happened was that the secondary insurance just paid the rest of the bill that the primary insurance didn't pay. Perhaps they consider amounts paid by the other insurance as counting toward the deductible? It's still not exactly clear to me. I haven't been too quick to inquire, since we ended up owing nothing out of the whole deal.
Mini Cyclone's expensesDescription | Sticker price | Insurance negotiated rate | Insurance paid | We owed |
Pediatrician visit (day 1 in hospital) | $145.00 | $116.80 | $0 | $116.80 |
Pediatrician visit (day 2 in hospital) | $165.00 | $137.83 | $0 | $137.83 |
Newborn hearing test | $326.00 | $297.12 | $267.41 | $29.71 |
Hospital stay | $3,108.55 | $3,037.00 | $2,733.42 | $303.68 |
An interesting thing about Mrs. Cyclone's secondary insurance is that when her expenses went through, the deductible became satisfied. This means that
order of submitting expenses to insurance mattered. Mini Cyclone's pediatrician visits went through the billing before Mrs. Cyclones' bills did, so we paid the full amount of these visits and it counted toward the deductible. The other expenses went through later, so we only paid the 10% coinsurance on these.
All told, we owed $588.02 toward Mini Cyclone's medical bills. If we hadn't added Mrs. Cyclone on to my insurance plan to have those expenses double-dip on the deductibles, we would have instead owed $2,600 toward the deductible plus 10% of the remaining expenses ($98.88), for a total of $2,698.88. Thus adding Mrs. Cyclone to my insurance ended up saving us $2,110.86. That turned out to be a great move!
What worked less well was the limited purpose FSAs we signed up for.
During open enrollment we signed up for a $1,000 2016 contribution to Mrs. Cyclone's LPFSA. This would cover the entirety of her post-deductible medical expenses up to the out-of-pocket maximum. However since the birth actually happened right at the end of 2015, she has not had any medical expenses yet in 2016 and we may need to blow that money on some fancy prescription glasses or something.
I took advantage of the special enrollment period to put $500 in
my LPFSA for 2015. The problem with this is that any expenses needed to be submitted by mid-February to meet the deadline for that account. For whatever reason, the final medical bill didn't go through until
last week, and the deductible wasn't met until well after the deadline. So I lost those funds under the "use it or lose it" rule. However I haven't yet had that money come out of my paycheck, so I'm assuming that the "don't bill for insurance premiums during paternity leave" policy also applies to LPFSA contributions. Either that, or the fact that I increased my 2015 LPFSA contribution after the last 2015 paycheck went through means I don't actually get billed for this. Either way, I'm calling it a wash.