Cedric Stephens | Pregnancy and health insurance: An independent view
Big up email@example.com! She is a self-described young, professional woman who works with a government agency.
It is not clear when her employment there started. In last Saturday's Gleaner, she made public her experiences with health insurance as an expectant mother. Her employer provides coverage under a group plan. Sagicor Life Jamaica was named as the carrier.
j.annoyedtaxpayingcitizen was shocked to learn that her "first-ever" pregnancy is not covered. She was enrolled in the plan as an individual and not under the family plan. Maternity benefits are offered only under the latter.
Costs and expenses associated directly with the pregnancy, plus the charges for her Caesarean section will not be borne by Sagicor as she had assumed. The costs of delivery by that procedure at the University Hospital of the West Indies are estimated at $180,000. Expenses incurred for prenatal care run from $3,500 to $5,000 per visit.
The expectant mother's partner is covered separately under a private health-insurance plan. The identity of the carrier was not stated.
However, his coverage does not include any dependents, specifically, the expected child's mother. As a result, his insurers will not be responsible for reimbursing any of the costs and expenses associated with this pregnancy.
The young professional woman concludes that "she would have preferred to be initially notified by Sagicor through her employer upon signing up for health insurance" about the scope of the coverage that she was offered and "advises other women who are planning to become pregnant to know of the loopholes that might prevent them from (accessing) maternity funds".
Health insurance is a very complicated subject. Maternity benefits are only one part of the plan. These employment extras are not easy to understand at the best of times unless one is a doctor, a trained midwife, or a specialist in health insurance.
Maternity benefits under any modern health-insurance plan should include prenatal, childbirth, and postnatal treatment. The benefits should cover normal and complicated pregnancies.
Treatment for sick newborn infants should also be included as many things can go wrong during pregnancy and childbirth.
The maternity benefits that are offered under the foreign contract in my possession become effective only after 10 months have elapsed since the insured person was first employed. This is standard for most health-insurance contracts. In this case, pre-authorisation from the insurer must be sought and obtained 30 days before delivery before the insurer will pay for the costs and expenses associated with the pregnancy once the individual's health insurance affords eligibility of the maternity benefit.
Government of Jamaica employees, according to my information, are covered under a group plan. Employees and members of their families are included. It is called the GEASO plan. It means Government Employees Administrative Services Only.
The significant letters in the acronym are ASO. The plan is an employer-funded health scheme that is managed under contract by the insurance company on behalf of the Government. It is not insurance because the costs and risks of the scheme are borne by the sponsors and not the insurance company.
The design and rules under which the plan operates are set by the Government. Claims are settled on behalf of the plan sponsors, GOJ, by the insurer. It is incorrect to describe Sagicor as GEASO's insurers. They are the plan administrators, and their role is to administer the benefits as determined by the sponsors.
Employers generally try to achieve a balance among many variables in relation to benefits provided to employees. The variables include the range and size of benefits, how the benefits compare with those of other employers, the number, type, and the total value of claims. All of these factors affect the cost of the plan.
The more generous the benefits, the higher the cost. The higher the cost of claims, the higher cost of the benefits.
The demographics of the group are also another factor. For example, the higher the number of women of child-bearing age in the workforce, the more likely there will be claims for maternity benefits. The waiting period before maternity benefits kick in is a cost-saving measure. It is intended to exclude pregnancies that occur prior to the date of employment.
Finally, since employers view benefits like health plans as part of pay, government policies in relation to pay directly affect employee benefit plans for health and retirement.
SHARING THE COSTS
Employers generally fund the cost of health coverage for individual employees. Employees with families have the option of extending their individual coverage to include family members as dependents (spouse, or domestic partner and children) and pay for the costs of those benefits.
Who tells employees about their benefits? Employee orientation is an important part of human resource management. It introduces new employees to their co-workers and provides them with information such as working hours, place of work, performance standards, benefits and facilities, and the like.
Some organisations employ persons whose sole job function is to communicate with and counsel employees about their benefits. The Seprod Group of Companies, for example, recently sought by way of a public advertisement applications to fill the position of employee benefits officer to carry out those functions.
Once the member is enrolled in the plan, a summary of the benefits is usually included in the package with the health membership card.
Did Sagicor have a specific obligation to provide counsel to new female employees about the maternity benefits in GEASO, or did that responsibility lie primarily with the plan sponsors based on the Seprod example?
Having and providing for children is very expensive. It begins with health care costs associated with pregnancy, other costs and expenses, and can last for 20 or more years. With nursery school costing, say, $300,000 per year, preparatory and secondary schools for several years after that running into millions of dollars, not to mention the humongous costs associated with tertiary education for four years, parents have to think long term.
Parents and expectant parents and insurance companies can work together to reduce some of the risks and uncertainties that are inherent in providing for children.
Some free advice: j.annoyedtax-payingcitizen and her partner should begin to explore what changes they ought to be making to their individual life insurance plans in order to secure a bright future for their impending little bundle of joy.
Finally, HR practitioners ought to take note.
- Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to firstname.lastname@example.org.